Financial Review

Faster and Faster but No Liftoff

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-11-25-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe DOW – 2 = 17,814 SPX – 2 = 2067 NAS+ 3 = 4758 10 YR YLD – .05 = 2.26% OIL – 1.95 = 74.22 GOLD + 2.90 = 1202.20 SILV + .20 = 16.77 The major stock indices couldn’t close at records, but Apple reached a milestone today. Apple’s market capitalization hit a record $700 billion; that’s double from 3 years ago when Tim Cook became CEO. Apple is the first S&P 500 company to ever reach a $700 billion market cap. Yet, on an inflation-adjusted basis, it still has way to go to be the most valuable company of all time. Microsoft’s market cap peak of $613 billion in 1999 translates to nearly $874 billion in 2014 dollars. When Microsoft was at the top, it was trading at 72 times earnings. Apple’s price-to-earnings ratio is currently 18, in line with the overall S&P. It’s a little tough to imagine what Apple will do in the future to match the growth they’ve experienced in the past. The economy is better than you thought. The Commerce Department revised its estimate of third quarter gross domestic product from 3.5% up to 3.9%. There will be another revision before settling on a final number. Second quarter GDP came in at a 4.6% growth rate; combined second and third quarter GDP was the strongest back to back growth since 2003. Let’s break …

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Financial Review

Dow Up, Oil Down, Quit Your Job

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-11-13-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review DOW + 40 = 17,652 SPX + 1 = 2039 NAS + 5 = 4680 10 YR YLD – .02 = 2.34% OIL – 2.79 = 74.39 GOLD + .20 = 1162.90 SILV – .01 = 15.77 Record high close for the Dow Industrials. The Nasdaq Composite hasn’t seen record highs since the spring of 2000, when it closed at 5048, which is just 368 points, or about a 7% move from here. If you were unlucky enough to have bought the PowerShares QQQ exchange-traded fund, an ETF that tracks that top 100 non-financial stocks in the Nasdaq, on March 10, 2000, you’d still be in the red on that investment. Tech companies are once again in a leadership role. While Microsoft, Apple and several other tech leaders of today are trading at higher prices than 15 years ago, Intel and Cisco are still well below their 2000 peak prices. Of course the largest company in market cap is Apple at $660 billion. Apple shares have surged more than 40% so far this year, creating more than $160 billion in market value for shareholders, which coincidentally is about the same market cap as IBM, which was once considered the big player in tech. Today, Microsoft passed Exxon to become the second largest company in terms of market capitalization. Exxon has a market cap of $400 billion; Microsoft is worth $408 billion. Exxon’s declining …

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Financial Review

Behind the Curtain

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-16-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review DOW – 24 = 16,117 SPX + 0.27 = 1862 NAS + 2 = 4217 10 YR YLD + .06 = 2.15% OIL + 1.16 = 82.94 GOLD – 2.20 = 1239.90 SILV – .08 = 17.47 The Dow is down for a sixth consecutive session. We started the morning down almost 200 points, so there is that. Part of yesterday’s volatility is being blamed on mini-flash crashes; 179 to be precise. Basically the high frequency traders yank their bids, as their algorithms try to catch up with big moves. It isn’t really a flash crash so much as a lack of liquidity. Take a deep breath. Think about how you are invested. Consider whether you are diversified across asset classes. The market has not collapsed. It has gone down in a fairly fast and furious manner, but it has not collapsed. What will happen next? Will the market bounce back? Will it go sideways? Will the pullback continue and become really painful? You don’t know; I don’t know; the market doesn’t know; nobody knows. Take a deep breath, consider where you are and where you want to be in the future. The stock market is always a gamble. Maybe you want to gamble with a part of your money, and that’s fine. Maybe you are tired of gambling and want to find something safer; that’s cool, too. Just understand what you’re doing. …

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Financial Review

Wednesday, June 25, 2014 – Use Your Library Card at a Copy Shop for a Horseback Ride to the Moon

Use Your Library Card at a Copy Shop for a Horseback Ride to the Moon by Sinclair Noe   DOW + 49 = 16,867 SPX + 9 = 1959 NAS + 29 = 4379 10 YR YLD – .02 = 2.56% OIL + .74 = 106.77 GOLD – .60 = 1319.40 SILV + .09 = 21.12 One of the jobs of the Commerce Department is to calculate the gross domestic product of the country; clearly it is a difficult task to figure out the value of all the goods and services produced, and so they tend to revise the numbers as they gather information. In April the Commerce Department figured the economy grew, just barely, 0.1% in the first quarter; last month they revised their GDP numbers to negative1.0%; today they revised GDP even lower. The economy shrank by 2.9%.   To understand the big move, you first have to realize that the GDP number is supposed to measure everything; construction and demolition, marriages and divorces, broccoli sales and cigarette sales, yoga classes and cancer treatments. One of the big reasons for the negative number is that the cost of healthcare dropped significantly.   The US spent $6.4 billion less on health care in the first quarter than in the last quarter of 2013. Government statisticians initially forecast a 9.9% increase in health-care spending, and what we got was a 1.4% decline. Considering all the millions of previously uninsured people who are gaining access to health insurance under the Affordable …

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Financial Review

Tuesday, June 10, 2014 – Equity Party in the Wormhole

Equity Party in the Wormhole by Sinclair Noe   DOW + 2 = 16,945 SPX – 0.48 = 1950 NAS + 1 = 4338 10 YR YLD + .02 = 2.63% OIL – .22 = 104.19 GOLD + 7.90 = 1260.90 SILV + .13 = 19.29   The Dow Industrial Average hit another record high close; the fourth consecutive record. How did the Dow manage to move higher? Who knows? It wasn’t a big move but any positive results in a new record. How now Dow? Maybe it has something to do with the Federal Reserve and the other central bankers vacuuming up all the toxic detritus from the world of finance, pushing rates to sub-zero; leaving investors with little choice but a move to equities. Maybe global corporations have found a way to squeeze extra value out of a bone dry economy. Maybe the major indices have entered a cosmic wormhole devoid of common sense.   Today’s case in point is Uber, which is an app designed to connect riders with cars and drivers; which sounds a lot like hailing a taxi, but this is different because you can hail the taxi and pay the taxi with your smartphone; which means it’s software that eats taxis. Uber is different mainly because it is worth about $18 billion; which means it is worth more than most of the companies in the S&P 500 index. It’s an equity party, and for now at least, nobody is turning out the lights. Friday’s …

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Uncategorized

Monday, November 25, 2013 – A Record High, Barely

A Record High, Barely by Sinclair Noe DOW + 7 = 16,072SPX – 2 = 1802NAS + 2 = 399410 YR YLD – .01 = 2.73%OIL – .75 = 94.09GOLD + 7.90 = 1252.60SILV + .38 = 20.31 The Dow and the S&P 500 indices have posted 7 weeks of gains. Today was flat, with the Dow up a few points and the S&P down a little. We’ll have a holiday shortened week, with the market closed on Thursday (something retailers should consider). Over the weekend, the big news was a nuclear agreement, of sorts between the US and Iran. The basic idea of the agreement is that we would lift some sanctions against Iran and they would not expand their nuclear program. The deal frees up some Iranian oil revenue that had been frozen in foreign banks. It’s unlikely Iran will add much in oil exports in the six months covered by the agreement. Iran has been exporting oil to China, India, South Korea, and Japan; those countries were granted waivers on sanctions because they really wanted the oil. The main benefit of the weekend’s deal with Iran may be the psychological impact on the market, which has long been propped up by fears of a supply disruption resulting from the standoff between Iran and the United States and its allies. Also, Iran may benefit from access to investment in oil infrastructure and equipment; but again, this is a 6 month deal for now. Many Middle Eastern countries have …

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Uncategorized

Monday, May 20, 2013 – Daily Scandals and Distractions

Daily Scandals and Distractions by Sinclair Noe DOW – 19 = 15,335SPX – 1 = 1666NAS – 2 = 349610 YR YLD + .02 = 1.96%OIL + .58 = 96.87GOLD + 33.90 = 1395.10SILV + .66 = 23.02 I suppose we should start with the scandal du jour, since this is where most of the news has been fixated recently. I’ll try to focus on how it affects the economy and the markets, but it’s hard to ignore the bluster. One quote I heard over the weekend was “add Watergate and Iran Contra together and multiply by ten” to calculate the tyrannical evil of the Obama scandals. Actually, the current scandals are not even close (I’m old enough to remember the enemies list and plumbers). I don’t think the scandals are inconsequential but I think some historical perspective might help. The rhetoric without perspective might actually backfire. But what we concern ourselves with here is the economic and financial impact. And it’s likely there will be limited economic impact. We’ve seen worse, and the markets survived and sometimes even prospered. Remember Iran Contra? It happened to coincide with one of the greatest bull runs the market has ever seen. And remember the Lewinsky scandal? It coincided with a market that was described as irrationally exuberant; this is often attributed to gridlock in Washington, or some sort of moderation. Actually, the old idea of gridlock being good for markets, doesn’t really hold water. When one party controls both the White House …

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