Financial Review

Monday, April 28, 2014 – But Our Bankers Aren’t Oligarchs

But Our Bankers Aren’t Oligarchsby Sinclair Noe DOW + 87 = 16448SPX + 6 = 1869NAS – 1 = 407410 YR YLD + .01 = 2.67%OIL – .03 = 100.57GOLD – 7.50 = 1297.30SILV – .16 = 19.67 This should be an interesting week. On Wednesday, the Federal Reserve’s Federal Open Market Committee, the FOMC, will meet to determine monetary policy; a statement will be issued Wednesday. On Friday, we’ll have the monthly jobs report. The market is jittery. The Dow fell 140 points on Friday, rose 139 on Monday morning, and gave it all back Monday afternoon, then recovered at little at the close. Investors are worried about the Ukraine crisis, the Fed’s tapering, peak earnings, high PEs, low GDP, inflation, deflation, and of course, their own shadows. So far, the stock market has merely been sluggish to start the year; no big crash, no big gains. Last week, the big 3 indices were down a little, while the indices are in negative territory year to date, that could change with one good week of trading. After doubling or tripling since 2009, stocks aren’t cheap any more. Companies, meanwhile, are finding it harder to keep raising earnings in a period of soft economic growth. This makes investors more cautious, but because speculative excess still hasn’t reached the extremes of past bubbles, and because the Federal Reserve is determined to sustain the recovery, there is less fear of a big decline. The Fed has started slowly rolling back its quantitative …

READ MORE →
Uncategorized

Monday, March 24, 2014 – Dance With the Devil

Dance With the Devil by Sinclair Noe DOW – 26 = 16,276SPX – 9 = 1857NAS – 50 = 422610 YR YLD – .02 = 2.73%OIL – .15 = 99.45GOLD – 25.10 = 1310.60SILV – .34 = 20.03 Manufacturing activity slowed in March after nearing a four-year high last month, but the rate of growth and the pace of hiring remained strong. The flash Markit US Manufacturing Purchasing Managers Index dropped to 55.5 from 57.1 in February. China’s manufacturing engine contracted in the first quarter of 2014, according to the flash Markit/HSBC Purchasing Managers’ Index. This week’s economic calendar includes the Case Shiller home index, FHFA home prices, and new home sales reports tomorrow; plus the March consumer confidence index; Wednesday includes the February durable goods orders; Thursday brings another revision to fourth quarter GDP, and Friday’s reports include the consumer sentiment report, consumer spending, and an update on personal spending. Ukrainian troops and their families are evacuating from Crimea, as Kiev effectively acknowledged defeat by Russian forces who stormed one of the last of their remaining bases on the peninsula. President Obama is in Europe to kick off a week-long visit that includes a G-7 meeting. He called for European allies to adopt tougher sanctions against Russia, saying Moscow’s actions must have costs. Mohamed El-Erian, the former co-chief at Pimco says markets have “brushed aside” concerns about Iran, Iraq, North Korea and Syria, to say nothing of rising tensions in Turkey and Venezuela. With Ukraine, the market had a …

READ MORE →
Uncategorized

Friday, March 21, 2014 – Friday Wrap-up

Friday Wrap-up by Sinclair Noe DOW – 28 = 16,302SPX – 5 = 1866NAS – 42 = 427610 YR YLD – .02 = 2.75%OIL + .69 = 99.59GOLD + 6.20 = 1335.70SILV un = 20.38 The S&P 500 briefly climbed to a record high of 1,883.97, just over its previous record of 1,883.57. We hit resistance and didn’t break through. For the week, the Dow is up 1.8%, the S&P is up 1.6% and the Nasdaq is up 0.9%. The European Union has added a few more sanctions against Russia, adding 12 names to their list of Russians and Ukrainians facing asset freezes and travel bans. One EU commissioner said the goal is not sanctions, the goal is to get Putin to the negotiating table. The EU doesn’t want anything to rattle their already weak financial situation. In Europe they consider the Spanish “recovery” to be one of their success stories. GDP is projected at 1% growth, double last year’s 0.5% pace, and youth unemployment is still 55%; and this is considered good news. Spain, and several other EU nations are in no condition to fight a sanctions battle with Russia. A separate order signed by President Obama yesterday expanded sanctions and authorized potential future penalties. Yesterday’s sanction expansion included Bank Rossiya, not one of the largest Russian banks, but it starts to pull the financial sector into the equation. The EU cancelled a summit in Russia planned for June. US bankers are now considering whether they participate in a …

READ MORE →
Uncategorized

Thursday, March 20, 2014 – Stress Tests and Such

Stress Tests and Suchby Sinclair Noe DOW + 108 = 16331SPX + 11 = 1872NAS + 11 = 431910 YR YLD un = 2.77%OIL – .27 = 98.63GOLD – 2.10 = 1329.50 SILV – .34 = 20.37 More sanctions for and from Russia; President Obama today expanded sanctions against Putin’s inner circle, now banning visas and freezing assets of 20; the blacklist now includes a commodity broker with a brokerage based in Switzerland, plus Bank Rossiya with about $10 billion in assets. In response, the Russian Duma, the lower house of parliament ratified the annexation of Crimea, and Putin announced sanctions against US oligarchs, including Senators John McCain and Harry Reid, and House Speaker John Boehner. McCain said he would have to cancel his plans for Spring break in Siberia. There is an EU summit underway, and it remains to be seen if European leaders will get tough with sanctions. German Chancellor Angela Merkel has been talking tough but the Euro-economy is still fragile, and it is doubtful sanctions will serve as a strong deterrent. This is not to say that sanctions won’t have an effect. Some of Russia’s largest companies are registered abroad where they may benefit from lower tax rates. You might not have caught this next bit of news, after all there was a lot going on today with the Russian sanctions and the breaking news on the missing plane and the basketball brackets and such; anyway, in Florida today, after talking about sanctions, President Obama called …

READ MORE →
Uncategorized

Thursday, March 06, 2014 – Energy as Arsenal

Energy as Arsenal by Sinclair Noe DOW + 61 = 16,421SPX + 3 = 1877NAS – 5 = 435210 YR YLD + 4 = 2.74%OIL + .45 = 101.90GOLD + 13.60 = 1351.40SILV + .28 = 21.54 The Standard & Poor’s 500 index closed at another all-time high. The number of people who filed for unemployment benefits last week fell more than expected. That’s a sign fewer workers are being laid off. Tomorrow we have the monthly jobs report and we’ll see. Does a string of weak economic data in recent months represent a genuine slowdown in US economic growth, or is it just weather-related noise? The February jobs report might not provide much clarity because the reference week for the household survey coincided with a mid-February storm that dumped ice and snow (again) on much of the eastern US. Federal funding for extended unemployment benefits expired at the end of December, so we’ll be watching the jobs data to see what happens to people who have been out of work for more than six months. Of course, the jobs number is hugely important because it supposedly plays into Federal Reserve monetary policy. Fed officials have signaled they’re on track to trim the central bank’s bond-buying program in $10 billion increments this year. The jobs report probably would need to very ugly to change their minds. Of course, the past two months of jobs numbers have been ugly but that was dismissed as weather related. Maybe the February report will …

READ MORE →
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 …

READ MORE →
Uncategorized

Friday, June 15, 2012 – Greeks Look for a Bargain – by Sinclair Noe

DOW  +115 = 12,767SPX + 13 = 1342NAS + 36 = 287210 YR YLD -.02 = 1.59%OIL – 1.11 = 82.80GOLD + 3.40 = 1627.70SILV + .10 = 28.84PLAT – 8.00 = 1490.00Sunday there will be an election in Greece. I don’t know how the election will turn out. I can’t find any consensus opinion. There may not be a consensus, even if there is a definitive winner. It appears the extremes are gaining in Europe because centrist parties are offering voters no meaningful choices. Pasok and ND (New Democracy) and Syriza. New Democracy is the old-guard conservative party; Pasok is the old-guard socialist party; Syriza is the new-upstart far left party. Golden Dawn is the new-upstart far right/neo-nazi party but they went to far during a televised debate last week when a spokesman started beating a woman on camera – that went too far and destroyed that fringe element. For Greeks that want to vote against the status quo they have no alternative but to vote for extremists. Right now it looks like New Democracy and Syriza will get the most votes, but not a majority, so they will have to pull together a coalition government, which they failed to do one month ago. But again, the election could swing in any number of unusual ways. Some common themes from Greek voters is that they feel they are being blackmailed into voting for parties that drove the economy into a ditch and blindly imposed austerity measures. The Euro-zone support for …

READ MORE →