Financial Review

Something is Rotten

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-12-12-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW – 315 = 17,280 SPX – 33 = 2002 NAS – 54 = 4653 10 YR YLD – .08 = 2.10% OIL – 2.52 = 57.43 GOLD – 5.60 = 1222.80 SILV – .06 = 17.14 The fall in oil prices has been dramatic, now down almost 47% since June. Nobody was expecting it would fall that far that fast. Goldman was forecasting $85 oil for 2015 as recently as October 29. Crude-oil futures fell to their lowest since May 2009 on Friday, briefly dropping below $57 a barrel, after the International Energy Agency delivered the latest reduction in forecasts for global oil demand. On the week, oil futures have lost slightly more than 12%. So, oil is a bit oversold right here but it is never a good idea to try to catch a falling knife. And the whole drop just tells us that something is rotten in the markets. The fundamentals of oil have not changed in concert with the price. We don’t have double the oil we had in June. So why is the price cut in half? I know that’s overly simplistic, but either the market is too negative on energy, or it is not diligent enough in thinking about broader implications. Low prices lead to oil being left in the ground. Low oil prices lead to debt defaults. Low oil prices can lead …

READ MORE →
Financial Review

No Expectations

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-09-16-2014.mp3Podcast: Play in new window | Download (Duration: 13:15 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 100 = 17,131 SPX + 14 = 1998 NAS + 33 = 4552 10 YR YLD un = 2.59% OIL + 1.79 = 94.71 GOLD + 2.20 = 1235.90 SILV + .03 = 18.79 Tomorrow the Federal Reserve FOMC wraps up its meeting to determine monetary policy. Even before the Fed issues a statement, the financial press is dissecting every phrase and utterance of every Fed policymaker, and trying to impart conflated significance to every twitch of an eyebrow or overstuffed briefcase. It’s pretty simple really; not much has changed over the past couple of months; the Fed is on track to end the large scale asset purchases under QE; the Fed will raise rates at some point, unless something drastic changes; the nuances of language are inconsequential. There, I’ve just condensed about 100 articles into about 100 words, and you didn’t miss anything. You’re welcome. Today, China jumped on the QE bandwagon. The People’s Bank of China will print about 500 billion yuan, which works out to about $81 billion. They will hand out the money to the five largest banks in China. That money will eventually make its way into the financial markets. Considering the cost of printing 500 billion yuan…, US producer prices were flat in August. The Labor Department said falling gasoline and food prices restrained its producer price index for final demand last month. The …

READ MORE →
Uncategorized

Thursday, May 16, 2013 – What’s Next For the Fed

What’s Next For the Fed by Sinclair Noe DOW – 42 = 15,233SPX – 8 = 1650NAS – 6 = 346510 YR YLD – .08 = 1.87%OIL + .95 = 95.25GOLD – 6.60 = 1386.90SILV + .10 = 22.79 The Labor Department reports the consumer price index dropped 0.4% in April from March, the biggest monthly drop since December 2008. The main reason the index fell was that gas prices plunged 8.1 percent. Excluding the drop in fuel costs, prices were largely unchanged. For the 12 months that ended in April, overall prices rose 1.1 percent — the smallest year-over-year increase in 2½ years. Excluding volatile energy and food costs, “core” prices ticked up 0.1 percent last month. Core prices have risen only 1.7 percent in the past 12 months. That’s below the Federal Reserve’s 2 percent inflation target. Yesterday, we reported that wholesale prices declined last month. Inflation is not the problem right now; it might be a problem at some point down the road, but not now. John Williams, the San Francisco Fed presidentgave a speechin Portland and he indicated that the Fed’s Quantitative Easing program can be reduced soon, and that the whole program may be halted this year. He pointed out the pace of job growth has picked up since the program was launched in September, with an average pace of job growth of 200,000 over the last six months. Williams said: “Assuming my economic forecast holds true and various labor-market indicators continue to register appreciable …

READ MORE →
Uncategorized

Wednesday, May 15, 2013 – Have Another Cookie

Have Another Cookie by Sinclair Noe DOW + 60 = 15275SPX + 8 = 1658NAS + 9 = 347110 YR YLD – .01 = 1.94%OIL + .18 = 94.39GOLD – 33.30 = 1393.50SILV – .82 = 22.69 More record highs on Wall Street. We celebrate with milk and cookies, and remembrances of the days of rice and beans and tins of tuna. Record highs are fleeting, almost ephemeral. I know the trend is your friend; don’t fight the Fed; a rising tide lifts all boats; yada, yada. Why is this starting to feel like an asset bubble? Stock Traders Daily did a comparison of quarter to quarter earnings and revenue growth rates for the S&P 500 and the Dow Industrials: “For the past two consecutive quarters, the Dow Jones Industrial Average has had zero growth. In fact, this quarter revenue growth declined by 2.65% (25 companies reporting thus far) and earnings have barely budged. Last quarter, there was negative earnings growth with revenue growth less than 1%, and since the third quarter of 2010, the EPS growth rate for the Dow has been declining steadily.” So, the growth rate is at zero and the prices keep going higher. Don’t worry, have another cookie; after 13 years in the market, you should be back to break even. Meanwhile, the National Association of Home Builders/Wells Fargo housing-market index rose to 44 in May from 41 in April. The NAHB says builders are noting an increased sense of urgency among potential buyers as …

READ MORE →

Tuesday, January 15, 2013 – It’s Better Than Nothing

It’s Better Than Nothing by Sinclair Noe DOW + 27 = 13,534SPX + 1 = 1472NAS – 6 = 3110 10 YR YLD – .03 = 1.83%OIL – .71 = 93.43GOLD + 12.10 = 1680.90SILV + .29 = 31.47 Let’s start with some economic reports. Consumer spending rose 0.5% in December and sales for October and November were revised slightly higher. It was a pretty good holiday shopping season, but the pace of spending in 2012 failed to equal the gain in the previous year. Retail spending rose an unadjusted 5.2%, down from 7.9% in 2011. And the pace of spending might slow as workers adjust to lower take-home pay as a result of a 2% hike in the payroll tax. We already know that the expiration of the payroll tax cuts was an especially damaging outcome of the fiscal cliff negotiations. It will total approximately $125bn less in wage-earners’ pockets, and is showing up immediately in reduced paychecks. Average weekly earnings of all employees on private nonfarm payrolls: $818.69 in December. The 2% payroll tax increase clips $16.37 a week from take-home pay. And if weekly earnings held steady in January, at the December level, workers would feel like they earned $802.32 instead. That’s the equivalent of losing all the 2012 gain in weekly earnings in one month.” As a percentage of income it hits the middle class hardest because it applies only to the first roughly $113,000 in wages, effectively a regressive measure that takes money from the …

READ MORE →