Financial Review

Send Thank You Notes to Janet

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-08-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 274 = 16,994 SPX + 33 = 1968 NAS + 83 = 4468 10 YR YLD – .02 = 2.33% OIL – 1.23 = 87.62 GOLD + 13.20 = 1222.50 SILV + .19 = 17.48 Volatility has kicked into high gear. Yesterday the VIX, the Volatility Index was up 11%, and today it dropped 12%. The Dow has had moves of 200 points or more five times in the last 10 days. There have only been 10 other days this year when the index has made moves of that magnitude. Yesterday was an ugly decline and today, stocks started drifting lower, and then suddenly, dramatically, jumped higher; by the closing bell it was the best day of the year. Send your thank you notes to Janet Yellen. Pause for just a moment and think about what has been driving the markets for the past 5 years. Certainly, there are many factors but a big factor would have to be Federal Reserve monetary policy. Yesterday stocks looked like they were going to hell in a hand basket, and today the Fed’s FOMC minutes were released and the markets were revived as if they’d been given a big old hypodermic full of adrenaline straight to the heart. We all know the Fed is ending its bond buying crusade this month, and the open question has been when they will raise interest rates. …

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Financial Review

Tuesday, April 15, 2014 – Yellen in the Lions’ Den

Yellen in the Lions’ Denby Sinclair Noe DOW + 89 = 16,262SPX + 12 = 1842NAS + 11 = 403410 YR YLD – .01 = 2.62%OIL – .22 = 103.83GOLD – 24.20 = 1303.40SILV – .41 = 19.66 Stocks were all over the place today. We started with triple digit gains for the Dow Industrials, dipped to triple digit losses, then back into positive territory for the close with the major indices closing just below their morning highs. This kind of volatility does not engender confidence; it does warrant caution. The utilities sector gained 1.3% and finished ahead of the other groups, extending its YTD gain to 11.8%; the biotech ETF added 1%, while the broader healthcare sector advanced 1.1%.Tech stocks have been beaten up quite a bit over the past couple of weeks. The Nasdaq 100 Tech Index (NDXT) is down 7% since April 1st. The Nasdaq Composite has exhibited weakness, but not to the point of meeting the definition of a correction; it would take a slide to 3,922 to mark a 10% fall from the March 5 closing high at 4,357; a 10% pullback from the March 6 intraday high of 4,371 would be achieved at 3,934. The Labor Department’s Consumer Price Index, or CPI, increased 0.2% in March after posting a 0.1% increase in February. Excluding volatile food and energy prices, core prices ticked up 0.2%.Prices rose 1.5% for the 12 months ending in March. That is up from February’s year-over-year reading of 1.1%. Core prices …

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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 …

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Wednesday, February 12, 2014 – Which Way the Wind Blows

Which Way the Wind Blows by Sinclair Noe DOW – 30 = 15,963SPX – 0.49 = 1819NAS + 10 = 420110 YR YLD + .04 = 2.76%OIL + .33 = 100.27GOLD + .90 = 1292.80SILV unch = 20.34 After a four day rally, the stock market came back to a dose of reality. Just a reminder that the Fed has started gradually reducing the amount of money it pumps into the economy. The move could hardly have been a surprise, because the Fed announced as early as last spring that it would begin doing so by the end of 2013. Now, it’s happening, and likely won’t change, and Janet Yellen said the rest of the world needs to adjust because the Fed has set its course. That has made for shaky markets around the world. Remember that about a month ago, we started worrying about emerging markets. China said their economy was slowing down; that in turn will hurt the exports of commodity producers, weakening their trade balances. The big question now is how much further growth in China will slow. A serious cutback in China’s demand would not just harm emerging markets’ shipments directly to China, it would also cause further erosion in the already falling world prices for emerging markets’ coal, copper, palm oil and other commodities. China is also dealing with a shadow banking system ripe with potential defaults. But that isn’t the only problem in the world. Many of those emerging markets also have unique economic …

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Thursday, January 23, 2014 – They Must Think We’re All Morons

They Must Think We’re All Morons by Sinclair Noe DOW – 175 = 16,197SPX – 16 = 1828NAS – 24 = 421810 YR YLD – .09 = 2.77%OIL + .47 = 97.20GOLD + 26.30 = 1264.10SILV + .22 = 20.11 We have economic reports to cover, some interesting news out of China; lots to talk about today. But what is the top story on most major news outlets? Justin Beiber was arrested in Miami for DUI and drag racing his Lamborghini from strip club to strip club. Seriously. We could spend the whole hour talking about it…, if we were brain dead. That is the biggest story in the country, because they must think we’re all morons. This has been a very quiet week for economic data but today we got a few economic reports. Initial jobless claims held steady last week at a nearly 2-month low as 326,000 people filed for first time unemployment benefits. The Markit Flash US Manufacturing Purchasing Managers’ Index (PMI) fell to 53.7 for January, its slowest growth in three months. A reading of 53.7 still indicates growth in manufacturing, and the researchers say we shouldn’t read too much into the report because cold weather has to play into the results. According to the economist from Markit: “After allowing for companies that saw production and sales disrupted by the cold weather, the rate of growth of output and orders remained as strong, if not stronger, than seen late last year.” In another consequence of the …

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Friday, September 20, 2013 – The Real Reason for No Taper

The Real Reason for No Taper by Sinclair Noe DOW – 185 = 15,451SPX – 12 = 1709NAS – 14 = 377410 YR YLD – .02 = 2.73%OIL – 1.72 = 104.67GOLD – 39.50 = 1326.60SILV – 1.29 = 21.90 The big news for investors over the next couple of weeks will be whether Congress can shoot itself in the foot. This past week’s big news for investors was no news from the Fed; no taper; although today St. Louis Fed President James Bullard said taper could begin as early as October. What does the no taper decision really mean? Since the major beneficiary of QE is the banks, it would seem logical that the main reason not to taper is because the banks are not as healthy as we are led to believe, or they’re involved in more risky business. Ellen Brown wrote Web of Debt and a new book called the Public Bank Solution. I’ve talked with Ellen on multiple occasions and she recently posted an article on her blog. Ellen did a great job of explaining the risks of the shadow banking system. Please click hereto read her article.

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Wednesday, July 17, 2013 – Good Markets, Bad Economy

Good Markets, Bad Economy by Sinclair Noe DOW + 18 = 15,470SPX + 4 = 1680NAS + 11 = 361010 YR YLD – .04 = 2.49%OIL + .59 = 106.59GOLD – 16.90 = 1275.60SILV – .72 = 19.29 Let’s start today with a quick rundown of a few earnings reports. Intel reported second quarter net income of $2 billion, down from $2.8 billion a year ago. Revenue was $12.8 billion, and they expect third quarter revenue around $13.5 billion, both revenue numbers and guidance were below current estimates. IBM posted earnings of $4.3 billion on revenue of $24.9 billion. Earnings were up slightly from a year ago, while revenue was down slightly. Bank of America reports net income rose 63 percent, to $4 billion from $2.5 billion in the period a year earlier, while revenue increased to $22.7 billion from $22 billion. The bank benefited from higher revenue from equities sales and trading and a reduction in expenses, but its mortgage unit continued to struggle. This seems to be a recurring trend for the big banks; more profits from the Wall Street business side, less revenue from the old fashioned loan business, less money set aside for reserves. The concerns are that trading performance tends to be uneven over time, and cutting costs can only go so far, it doesn’t increase revenue. June housing starts fell 9.9% to an annualized rate of 836,000—the lowest level since August 2012. The drop in housing starts was led by a decline in multifamily …

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Monday, August 13, 2012 – The World Slows Down but Refuses to Admit or Deny Slowing

The World Slows Down but Refuses to Admit or Deny Slowing– by Sinclair Noe DOW – 38 = 13,169SPX – 1 = 1404NAS + 1 = 302210 YR YLD +.01 = 1.65%OIL +.01 = 92.74GOLD – 10.60 = 1610.90SILV – .30 = 27.93PLAT – 13.00 = 1391.00 The S&P 500 closed slightly negative, but the interesting part was the volume, or the lack thereof on the New York Stock Exchange. It was the lowest non-holiday-trading day volume in over a decade; only 380 million shares changed hands. You’ve got to wonder if the problems with Knight Capital last week have exposed a problem. Clearly something broke with Knight’s algorithm software glitch. Could it be that the volume on the exchange has been artificially inflated? Yep. And what did we get for having a company like Knight Capital scalping with High Frequency trades? We all lost a little.  The S&P 500 and Dow have risen every week for the past five weeks. The S&P 500 last wrapped up a five-week climb in mid-March. The Dow hasn’t done so since last October. The Dow has fallen for 10 out of the past 11 Mondays, and the S&P 500 has finished down five of the last six. Japan’s economy grew in the second quarter at a 1.4 percent annual rate, slower than expected. Last week, China released dismal figures on retail sales and exports in July. There was some speculation Beijing would roll out stimulus measures over the weekend. That did not happen. …

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Tuesday, April 10, 2012

DOW – 213 = 12, 715SPX – 23 = 1358NAS – 55 = 299110 YR YLD -.05 = 1.99%OIL +.09 = 101.11GOLD + 19.30 = 1661.60SILV + .08 = 31.94PLAT – 14.00 = 1605.00 Today marked the start of the first quarter earnings reporting season. The Dow and the S&P have now dropped for 5 consecutive days. The S&P 500 dropped below its 50-day moving average of 1,372. The Nasdaq also slid below its 50-day moving average and closed below 3,000 for the first time since March 12. Volume finally increased today, confirming the bearish move. The Standard & Poor’s 500 Index is still up 8 percent so far this year – compared with its gain of 12 percent at the end of the first quarter, but the benchmark index has fallen 4 percent in the past five sessions, its worst streak since November. Earnings reporting is actually well underway; with 5 percent of the S&P 500 components having already reported, profits are seen rising 3.1 percent in the quarter. Symbolically or alphabetically if you really want to be accurate, Alcoa kicks off the earnings season. Alcoa is one of the 30 stocks in the Dow industrial Average and the ticker is AA. After the close of trade, Alcoa said income from continuing operations in the first quarter was $94 million, or 9 cents per share, compared with a profit of $309 million, or 27 cents per share in the same quarter last year. Revenue rose slightly to $6 billion. …

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