Financial Review

When Money Slows Down

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-08-09-2018.mp3Podcast: Play in new window | Download (Duration: 13:10 — 7.5MB)Subscribe: Apple Podcasts | Android | RSS…Nasdaq up for 8. Wholesale prices flatline. Why worry about overshooting inflation targets. Money velocity at near record lows. Fed mops up surplus cash. Markets don’t reinvest for future growth. Financial Review by Sinclair Noe for 08-09-2018

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Financial Review

Two Paths Diverge

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-12-02-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe for 12-02-2015 DOW – 158 = 17,729 SPX – 23 = 2079 NAS – 33 = 5123 10 YR YLD + .03 = 2.18 OIL – 1.67 = 40.1 GOLD – 15.60 = 1054.20   American businesses stepped up hiring last month, led by strong gains in retail, finance and other service industries. Payroll processor ADP says that private companies added 217,000 jobs last month, the most in five months. Service sector firms added 204,000, while manufacturers hired just 6,000. The figures come just two days before the government issues its official jobs report for November. If the Friday jobs report is anywhere close to today’s ADP report, it might lock in a rate hike at the Fed FOMC meeting in two weeks.   The productivity of American businesses was higher in the third quarter than initially reported — but so were labor costs. Newly revised government figures show that productivity rose at a 2.2% annual rate instead of 1.6%. Unit-labor costs were revised higher to show a 1.8% annual increase in the third quarter, and second quarter costs were revised higher. As a result, the year-over-year increase in labor costs climbed to a 3% rate, the highest level in six quarters. Unit-labor costs reflect how much it costs a business to produce one unit of output, such as a refrigerator or a ton of steel.   The Fed published …

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Financial Review

ECB QE

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-01-22-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW + 259 = 17,813 SPX + 31 = 2063 NAS + 82 = 4750 10 YR YLD + .04 = 1.90% OIL – 1.24 = 46.54 GOLD + 9.20 = 1303.10 SILV + .20 = 18.41 The European Central Bank has launched a quantitative easing program, which together with existing programs, will pump €60 billion per month into the Eurozone economies through the purchase of public and private securities, mainly government bonds. The QE program will run through September 2016 with a total price tag of €1 trillion (or $1.3 trillion dollars). So, it’s a big money printing, QE party for the Eurozone, except for Greece. The central bank effectively shut Greece out of the bond buying until July, and only then if Greece passes a review of its current bailout program. That program is heavy on debt reduction and austerity. The country’s existing program of financial support expires at the end of February. The government will run out of money by June without further aid. Greece holds elections on Sunday. The Syriza party is expected to win the election. Syriza would like to default on existing debt and scrap the current bailout program; essentially challenging the status quo of fiscal austerity policy. What happens if Syriza wins the election on Sunday? Well, they will probably claim that fiscal austerity has contributed to the despair and poverty of …

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Financial Review

Game On

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-12-04-2014.mp3Podcast: Play in new window | Download (Duration: 13:15 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW – 12 = 17,900 SPX – 2 = 2071 NAS – 5 = 4769 10 YR YLD – .03 = 2.26% OIL – .61 = 66.77 GOLD – 3.10 = 1207.50 SILV + .06 = 16.59 Seven of the 10 main industries in the S&P 500 declined. Energy companies slumped 0.8%, following three days of gains. Chevron slid 1.3%, the most in the Dow, and Exxon Mobil declined 0.6%. Crude fell 18% last month and moves of that magnitude cannot be attributed to normal markets following supply and demand. There is manipulation in the oil market, and the question is really whether it will end well. Initial jobless claims fell 17,000 in the week ended Nov. 29 to 294,000. In the prior week, new filings hit 314,000, the first reading above 300,000 since early September. Tomorrow is the monthly jobs report and the guestimates are calling for 230,000 new jobs added and the unemployment rate steady at 5.8%. The November jobs reports are subject to some revisions, so don’t be surprised if that guesstimate is wildly off base. When the jobs report surprises to the upside, the S&P trades up two-thirds of the time, with growth sectors like Industrials outperforming. When jobs miss, gold does well. We’ll dig into the report tomorrow, but some of the important bits of data we will track includes where wages are going. …

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Financial Review

The Grand Experiment

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-29-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW – 31 = 16,974 SPX – 2 = 1982 NAS – 15 = 4549 10 YR YLD + .04 = 2.32% OIL + .53 = 81.95 GOLD – 16.20 = 1212.60 SILV – .11 = 17.19 The Federal Reserve wrapped up their 2 day FOMC meeting. There were no surprises. The Fed is ending Quantitative Easing, just as they promised they would. There was a very slight change in their description of the labor market and inflation; saying underutilization in the labor market is gradually diminishing; and regarding inflation, the rate of price changes has slackened recently because of lower energy prices. The Fed kept their phrase “considerable time” to describe how long they will hold off raising interest rates. Quantitative Easing is Fed-speak for large scale asset purchases, or another way of saying the Fed had been buying US Treasuries and mortgages. At one point they were buying $85 billion a month. Over the past year they’ve scaled back purchases, cutting back about $10 billion after each FOMC meeting. Earlier this month they had scaled back purchases to $15 billion, and now the buying spree is over. Except it isn’t really over. The Fed has spent about $4.5 trillion and removed a tremendous amount of bonds and mortgages from the market, greatly reducing supply. The basic supply demand equation says that when you reduce supply, prices go up. Sure enough, …

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Financial Review

Thursday, April 24, 2014 – The Bridge From Bubbles to Prosperity

The Bridge From Bubbles to Prosperity by Sinclair Noe DOW unchanged 16,501SPX + 3 = 1878NAS + 21 = 414810 YR YLD unchanged 2.69%OIL + .46 = 101.90GOLD + 10.20 = 1294.90SILV + .20 = 19.75 The Dow closed unchanged. That is just one of those freaky things that happens every few years. I remember it happened in 2008, and 1998 and 1996. I’m fairly sure there were other days where the Dow closed unchanged. I don’t know if there is any particular significance. Orders to factories for durable goods rose 2.6%, adding to the 2.1% rise in February. The back-to-back gains followed two big declines in December and January, which had raised concerns about possible weakness in manufacturing. The earlier declines, however, were likely tied to bad winter weather. On the jobs front, the number of people seeking unemployment benefits jumped 24,000 to a seasonally adjusted 329,000 last week. The four-week average of weekly unemployment claims decreased to 316,750, which puts us back to 2007 levels. The big earnings report today was Microsoft, which posted income of $5.6 billion, or 68 cents per share, compared with $6 billion, or 72 cents, in the year-ago quarter. They beat estimates of 63 cents per share, but take it with a grain of salt; the estimates started the quarter around 80 cents per share. Yesterday we talked about a tech bubble, and whether we were in one or not, and we looked at comments from Greenlight Capital manager David Einhorn; he says …

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Uncategorized

Wednesday, August 21, 2013 – Ticking Away the Minutes

Ticking Away the Minutes by Sinclair Noe DOW – 105 = 14, 897SPX – 9 = 1642NAS – 13 = 359910 YR YLD + .04 = 2.85%OIL + .04 = 105.00GOLD – 4.20 = 1367,80SILV – .14 – 22.89 Stocks slid, clawed back to breakeven, then sold aggressively into the close. News of the day in the form of FOMC minutes showing policymakers are talking about pulling away the Quantitative Easing punchbowl. The Dow closed below 15,000 for the first time since July 3; the Dow is now down for six sessions; the S&P ended negative, dragged by utilities and financials; techs held up relatively well. Yields on the benchmark 10-year Treasury hit a fresh session high of 2.88%. The dollar held up against most currencies, and most emerging market currencies continued to take a beating. So, what did the Fed say in the FOMC minutes? Nothing unexpected. Policy makers were “broadly comfortable” with Bernanke’s plan to start reducing bond buying later this year if the economy improves, with a few saying tapering might be needed soon. But they weren’t saying they had to taper right this moment. The central bankers did not signal as to whether such a taper of the $85 billion-per-month bond purchase plan would come in September, October or December, the three remaining meeting dates for 2013, but they indicated they would like to have it tapered down by the middle of next year. “A few members emphasized the importance of being patient and evaluating additional …

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Wednesday, May 22, 2013 – Throwing Ben From the Chopper

Throwing Ben From the Chopper by Sinclair Noe DOW – 80 = 15,307SPX – 13 = 1655NAS – 38 = 346310 YR YLD +.08 = 2.03%OIL – 1.53 = 94.65GOLD – 6.30 = 1370.70SILV – .16 = 22.37 Federal Reserve Chairman Ben Bernanke went to Capitol Hill this morning and that was followed by the release of the Federal Open Market Committee, or FOMC, minutes from their May 1st meeting and that was followed with a big swing lower for stocks on very heavy volume and a big swing lower for bonds and everything was just rocking and rolling. Bernanke was appearing before the Joint Economic Committee this morning; the gavel fell; Bernanke delivered some prepared remarks: “A premature tightening of monetary policy could lead interest rates to rise temporarily but would also carry a substantial risk of slowing or ending the economic recovery and causing inflation to fall further.” So, that sounded like no tapering off of QE anytime soon. Stocks and bonds inched a little higher. Bernanke went on to say that fiscal policy continues to be a drag on the economy. Right, we’ve heard it before. Then, Bernanke stressed that slowing asset purchases would not be the automatic beginning of the exit. The flow of purchases could be ramped up depending on the data. Now, the markets were trying to figure out which direction he’s going. Asked when the Fed will slow down asset purchases, Bernanke says it could come in “next few meetings”, but he won’t …

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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 …

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Wednesday, May o1, 2013 – May Day

May Day by Sinclair Noe DOW – 138 = 14,700SPX – 14 = 1582NAS – 29 = 329910 YR YLD – .04 = 1.64%OIL – 2.54 = 90.92GOLD – 19.10 = 1459.10SILV – .70 = 23.75 It’s May Day. Maybe you all gathered round the May pole with colorful ribbons. Or maybe you commemorate the workers’ protests of 1886. Or maybe you think it’s all just a communist plot and you won’t celebrate May Day at all, you will take the advice of President Eisenhower and observe Law Day. Actually, the history of May Day is kind of interesting. It started with pagan celebrations dealing with Spring and fertility. May 1, 1886, protests erupted all across the United States, with some 340,000 workers taking part, demanding an 8-hour workday. An estimated 190,000 went out on strike. In Chicago, a center of the eight-hour day agitation, some 80,000 workers walked off the job, with most of them joining a vast parade through the city streets. Chicago police launched an assault on union members by gunning down locked-out workers at the nearby McCormick Harvester Plant. When an explosion of unknown origins went off at a subsequent protest rally at the Haymarket, a large open square in the city, police also opened fire on that worker gathering, killing some and wounding hundreds of others in what became known as the Haymarket Massacre. Radical labor agitators were arrested and blamed for the bloodshed, although most of them were not present at the rally. Four …

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