Financial Review

Be Careful Out There

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1_2-08-22-2014.mp3Podcast: Play in new window | Download (Duration: 20:28 — 9.4MB)Subscribe: Apple Podcasts | Android | RSS08222014 LISTEN HERE DOW – 38 = 17,001 SPX – 3 = 1988 NAS + 6 = 4538 10 YR YLD un = 2.40% OIL – .46 = 93.50 GOLD + 4.30 = 1281.60 SILV un = 19.51 All three major indices posted gains for the week, with the Dow up 2%, the S&P up 1.7% and the Nasdaq up 1.6%. It was the strongest week of gains for both the Dow and the S&P since April, and the third straight week of gains for all three indices. There is a lot to cover before we can wrap up the week. First we go to Jackson Hole Wyoming, where the Fed has been having a friendly get together of economists. Janet Yellen kicked off the event with a speech this morning. She said what you might expect: “There is no simple recipe for appropriate policy,” and she called for a “pragmatic” approach that gives officials room to evaluate data as it arrives without committing to a preset policy path. And she backed up her comments with a new tool, the Labor Market Conditions Index, which measures 19 labor market indicators, and it isn’t new data, just combining it all together, but it showed she is monitoring the data. Yellen referenced the possibility that labor markets may be a bit tighter than they seem and that the Fed may consider having to raise interest rates …

READ MORE →
Financial Review

Rarified Air

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-08-21-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSS08212014 DOW + 60 = 17,039 SPX + 5 = 1992 NAS + 5 = 4532 10 YR YLD – .02 = 2.40% OIL + .45 = 93.90 GOLD – 15.10 = 1277.30 SILV – .04 = 19.52 The S&P 500 broke two records during today’s session, climbing past its previous intraday all-time high of 1,991.39 and ending above its previous record close of 1,987.98. Both had been set on July 24. Family Dollar has rejected a $9 billion dollar buyout offer from Dollar General, opting instead for a smaller $8.5 billion dollar offer from Dollar Tree. The thinking is that a combination of the largest dollar store – Dollar General with the #2 Family Dollar, would be unlikely to win antitrust approval. Once upon a time, Sears was the largest retailer in the nation. Today, Sears Holdings announce it lost $975 million in the first half of the year; $573 million in the second quarter. This was the 9th consecutive quarter of losses, and the past quarter also marked the heaviest losses. Quarterly revenue dropped about 10%. The plan now is to close underperforming stores, or, in a classic example of corporate-speak “rationalizing our physical footprint.” The company successfully spun off Lands End earlier this year, to the benefit of shareholders. But its Sears Canada and Sears Automotive stores have been on the block for some time, indicating either a lack of interest …

READ MORE →
Financial Review

Sunlight is the Best of Disinfectants

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-08-20-2014.mp3Podcast: Play in new window | Download (Duration: 13:15 — 6.1MB)Subscribe: Apple Podcasts | Android | RSS08202014 DOW + 59 = 16979 SPX + 4 = 1986 NAS – 1 = 4526 10 YR YLD + .02 = 2.42% OIL + .63 = 93.49 GOLD – 3.80 = 1292.40 SILV + .04 = 19.55 No economic reports today, but the Federal Reserve released the minutes of the July 29-30 FOMC meeting. You will recall that the Fed left interest rates unchanged and continued the taper by reducing large scale asset purchases by $10 billion a month, with the plan to end purchases by October. The Fed had said in its policy statement following the July meeting that there was “significant” labor market slack, but the minutes showed many members of its policy-setting panel thought this characterization “might have to change before long.” Most Fed officials wanted further evidence the labor market and the economy were showing significant improvement before changing their view on raising rates, but they said, “Labor market conditions had moved noticeably closer to those viewed as normal in the longer run,” and policymakers “generally agreed” the job market was healing faster than they had expected. Most Fed policymakers felt any change in their view on when to start raising rates “would depend on further information on the trajectories of economic activity, the labor market and inflation.” Well, we got more data yesterday showing that inflation is not a problem yet; so that leaves economic activity and the …

READ MORE →
Financial Review

The Good, the Bad, and the Depressing

DOW + 129 = 16,956 SPX + 13 = 1973 NAS + 50 = 4458 10 YR YLD + .05 = 2.56% OIL – .13 = 105.24 GOLD – .80 = 1327.10 SILV + .02 = 21.08   Record high closes for the Dow and the S&P.   The record setting bull market run refuses to stumble. The S&P 500 has not seen a correction, a drop of 10%, for 1,002 days, and counting. This marks the fifth longest stretch without a correction since 1928. The average time between corrections is about 18 months; we’ve now gone 33 months without a 10% pullback.   The Institute for Supply Management said its manufacturing index registered 55.3% in June, down slightly from May’s reading of 55.4%. Any number above 50% signals expansion. Separately, the research firm Markit said its final reading of US manufacturing conditions in June totaled 57.3, compared with a preliminary reading of 57.5; still the highest reading since May 2010. So the manufacturing sector has expanded for 13 consecutive months, but it wasn’t a month over month increase, and we have to remember that manufacturing was expanding in the first quarter as the broader economy was contracting by 2.9%. Today’s reports were decent news for manufacturing, but hardly great.   The Commerce Department reports construction spending increased 0.1% in May, following a 0.8% increase in April. Construction activity totaled $958 billion at a seasonally adjusted annual rate in May, up 6.6% from a year ago. Single-family home construction was …

READ MORE →
Financial Review

Tuesday, July 01, 2014 – The Good, the Bad, and the Depressing

The Good, the Bad, and the Depressing by Sinclair Noe   DOW + 129 = 16,956 SPX + 13 = 1973 NAS + 50 = 4458 10 YR YLD + .05 = 2.56% OIL – .13 = 105.24 GOLD – .80 = 1327.10 SILV + .02 = 21.08   Record high closes for the Dow and the S&P.   The record setting bull market run refuses to stumble. The S&P 500 has not seen a correction, a drop of 10%, for 1,002 days, and counting. This marks the fifth longest stretch without a correction since 1928. The average time between corrections is about 18 months; we’ve now gone 33 months without a 10% pullback.   The Institute for Supply Management said its manufacturing index registered 55.3% in June, down slightly from May’s reading of 55.4%. Any number above 50% signals expansion. Separately, the research firm Markit said its final reading of US manufacturing conditions in June totaled 57.3, compared with a preliminary reading of 57.5; still the highest reading since May 2010. So the manufacturing sector has expanded for 13 consecutive months, but it wasn’t a month over month increase, and we have to remember that manufacturing was expanding in the first quarter as the broader economy was contracting by 2.9%. Today’s reports were decent news for manufacturing, but hardly great.   The Commerce Department reports construction spending increased 0.1% in May, following a 0.8% increase in April. Construction activity totaled $958 billion at a seasonally adjusted annual rate in …

READ MORE →
Financial Review

Monday, June 30, 2014 – Narrow Decisions Leave the Doors Wide Open

Narrow Decisions Leave the Doors Wide Open by Sinclair Noe   DOW – 25 =  16,826 SPX – 0.73 = 1960 NAS + 10 = 4408 10 YR YLD – .02 = 2.51% OIL – .23 = 105.51 GOLD + 11.80 = 1327.90 SILV + .09 = 21.06   Today’s session marked the end of trading for June as well as for the second quarter. After a run to record closes, the S&P 500 Index posted a quarterly gain of 4.7%, and the Dow Jones Industrial Average had an increase of 2.2%. The Nasdaq Composite Index had a quarterly gain of 4.9%. It marks the sixth straight quarterly gain for both the S&P and Nasdaq. With six straight quarterly gains, the Nasdaq has had its longest streak of advances since 2000, while the S&P 500 has had its best run since 1998. The Dow, meanwhile, posted its fifth positive quarter of the last six.   For the first half of 2014, the S&P 500 is up 6%, with the Dow industrials up 1.4%, and the Nasdaq up 5.4%. Airline, pharmaceutical, and utilities stocks led advancers during the period, which was marked by the impact of bad weather, and a 2.9% drop in first-quarter gross domestic product. Yields on Ten year Treasury notes started the year at 3.03%, dropped down to 2.71% at the end of the first quarter, then dropped to 2.45% at the start of June. The S&P 500 has scored 22 record closing highs so far this year, …

READ MORE →
Financial Review

Friday, June 27, 2014 – Biscuits on the Table

Biscuits on the Table by Sinclair Noe   DOW + 5 = 16,851 SPX + 3 = 1960 NAS + 18 = 4397 10 YR YLD  + .01 = 2.53% OIL – .10 = 105.74 GOLD – 1.80 = 1316.10 SILV – .25 = 20.97   The major stock indices traded lower for most of the day, and only in the final minutes turned to positive territory. For the week, the Dow slipped 0.6 percent and the S&P 500 declined 0.1 percent, while the Nasdaq gained 0.7 percent. Volume spike today as the Russell Indices were reconstituted.   The Russell Indices are compiled by Russell Investments. The Russell 3000 is an index of the 3000 largest stocks in the US. The Russell 2000 is the 2000 smallest stocks in the Russell 3000. Once a year, the Russell indices are reconstituted, to reflect changes such as acquisitions, bankruptcies, or just changes in the size of the companies listed in the index. The reconstitution probably explains the increase in volume and the last minute increase in prices today.   Some things we need to know heading into the weekend; including Ukraine, Iraq, and Argentina. We’ll start with the situation in Ukraine. The European Union signed a free-trade pact with Ukraine today and warned it could impose more sanctions on Moscow unless pro-Russian rebels act to wind down the crisis in the east of the country by Monday. Georgia and Moldova signed similar deals, holding out the prospect of deep economic integration and …

READ MORE →
Financial Review

Thursday, June 26, 2014 – Buffers and Filibusters

Buffers and Filibusters by Sinclair Noe   DOW – 21 = 16,846 SPX – 2 = 1957 NAS – 0.71 = 4379 10 YR YLD – .03 = 2.52% OIL – .80 = 105.70 GOLD  – .70 = 1317.90 SILV + .10 = 21.22   Yesterday, the Commerce Department downgraded the first quarter gross domestic product to a negative 2.9%, meaning the economy shrank by 2.9%. Today, St. Louis Federal Reserve president James Bullard says it’s likely an aberration; the weak report for the first quarter was likely distorted by inventories, weather, and by the challenges of accounting for health-care spending under the new law. Bullard says he isn’t worried, “the market’s right to shake this off. Looking forward over the next four quarter, most forecasters have 3% growth.”   Well, that’s good. No worries. Nothing to see hear, move along, move along.   It’s just that the fall was so nasty, it’s hard not to look and linger over the carnage. It really was ugly. And while we can blame it on the weather, that doesn’t seem right. We always have weather. Minneapolis is underwater today. Bad weather is a fairly constant aberration. We should be past the point of excuses; we are 5 years into a recovery; granted it has been a stealth recovery.   I wonder if Mr. Bullard is confusing the stock market with the economy. A down day in the bull market would just be a blip on the tape, but the stock market is …

READ MORE →
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 …

READ MORE →
Financial Review

Wednesday, June 18, 2014 – Forecasts Are Subject to Change

Forecasts Are Subject to Change by Sinclair Noe   DOW + 98 = 16,906 SPX + 14 = 1956 NAS + 25 = 4362 10 YR YLD – .04 = 2.61% OIL – .15 = 105.72 GOLD + 5.80 = 1278.50 SILV + .14 = 20.00   The Federal Reserve FOMC meeting wrapped up today. The Fed issued a statement that was almost a carbon copy of the April statement. The Fed said that growth “has rebounded in recent months” and the labor market indicators “generally showed further improvement.” The central bankers noted that business fixed investment had “resumed its advance” after saying that it “edged down” in April. The only negative comment was that the housing sector “remained slow.”   The Fed will hold interest rates steady for now, and probably well into next year; and they will continue to cut back on their large scale asset purchase program by another $10 billion per month. So, starting in July, the Fed will only buy $35 billion in Treasuries and mortgage backed securities.   The Fed statement was generally upbeat: “Economic activity will expand at a moderate pace and labor market conditions will continue to improve gradually. Household spending appears to be rising moderately and business fixed investment resumed its advance.”   Fed Chairwoman Janet Yellen held a press conference and the topic of inflation was brought up. The feeling is that the Fed wants to see solid signs of recovery, and inflation isn’t a concern; those inflation numbers are …

READ MORE →
Financial Review

Tuesday, June 17, 2014 – What Could Go Wrong?

What Could Go Wrong? by Sinclair Noe   DOW + 27 = 16,808 SPX + 4 = 1941 NAS + 16 = 4337 10 YR YLD + .06 = 2.65% OIL – .30 = 106.60 GOLD un = 1272.70 SILV + .09 = 19.86 The FOMC, the Federal Open Market Committee started two days of meetings today; tomorrow they are expected to announce more of the same. The FOMC is largely expected to taper its asset purchase program by $10 billion to $35 billion. Effective July 1, the Fed is expected to lower its asset purchases to $15 billion in agency mortgage backed securities (MBS) and $20 billion in Treasuries. The Fed is also expected to maintain its current forward guidance language on federal funds rate support; in other words, they will keep telling us that rates might increase sometime next year.   The committee is likely to make some upgrades to its description of the economic outlook in its economic projections. The committee will probably need to reduce its 2014 real GDP growth forecast to take into account the Q1 disappointment, and we can probably expect the committee to reduce its unemployment rate forecast and lift its inflation forecast slightly.   The consumer-price index climbed a seasonally adjusted 0.4% in May from a month earlier. It marked the fastest increase since February 2013 and doubled the pace of economists’ forecasts. Excluding food and energy components, so-called core prices increased 0.3%, the fastest pace since August 2011. From a year …

READ MORE →
Financial Review

Monday, June 16, 2014 – Manic Monday

Manic Monday by Sinclair Noe DOW + 5 = 16,781 SPX + 1 = 1937 NAS + 10 = 4321 10 YR YLD – .01 = 2.59% OIL – .12 = 106.79 GOLD – 4.20 = 1272.70 SILV un = 19.77   It’s Monday, and that means mergers. Today’s acquisition news comes from Medtronics, the medical device maker, announcing it will acquire Covidien for nearly $43 billion. Medtronics was founded in a garage in Minneapolis in 1949, but they will change their headquarters to Ireland, which is where Covidien has been headquartered since 2009. Covidien is actually a Massachusetts company, and they operate out of Massachusetts. Medtronics will continue to operate out of Minneapolis; the whole deal is about a lower tax rate, and for Medtronics, the ability to repatriate $20 billion in offshore profits, without paying tax.   Meanwhile, the IPO market remains white hot, and 14 companies will come to market this week. So far this year 124 companies have priced in the US, up 57% from a year ago. Total proceeds raised come to $25.8 billion, up almost 41% from 2013. Data today showed industrial production climbed more than forecast in May. Output at factories, mines and utilities rose 0.6% after a revised 0.3% drop in April that was smaller than previously estimated. In a separate report, the New York Fed’s Empire manufacturing report rose to 19.28, better than expectations.   The Fed FOMC meets later this week to determine monetary policy. After their meeting concludes Wednesday, …

READ MORE →
Financial Review

Friday, June 13, 2014, – Infallible Source Predicts Economic Collapse!

Infallible Source Predicts Economic Collapse! by Sinclair Noe   DOW + 41 = 16,775 SPX + 6 = 1936 NAS + 13 = 4310 10 YRYLD + .02 = 2.60% OIL + .38 = 106.91 GOLD + 2.80 = 1276.90 SILV + .15 = 19.77   For the week, the Dow was down 0.9%, the S&P fell 0.7 percent and the Nasdaq was down 0.25%. The week’s decline was the first after three weeks of consecutive gains on the S&P 500. For the year, the broad market index is up about 4.8%. So, it was a rough week, but a good Friday the 13th. The Producer Price Index measures prices at the wholesale level; the PPI was down 0.2% in May. The decline was driven lower by cheaper food and gas, and follows two months of strong gains. In the past 12 months, producer prices have risen 2%, matching the Federal Reserve’s inflation target. That’s down from an annual gain of 2.1% in April. Excluding the volatile food, energy and profit margin categories, (for all you people who don’t eat food or drive in cars) core producer prices were unchanged in May. Inflation, as measured by the consumer price index, has been mostly below 2% for the past two years.   Of course, that might change, at least for people who eat and drive cars. The price of oil has jumped the past few days, now standing at $106.91 a barrel, mainly on fears of a civil war in Iraq. …

READ MORE →
Financial Review

Thursday, June 12, 2014 – The Beautiful Game

The Beautiful Game by Sinclair Noe DOW – 109 = 16,734 SPX – 13 = 1930 NAS – 34 = 4297 10 YR YLD – .05 = 2.59% OIL + 2.51 = 106.91 GOLD + 12.70 = 1274.30 SILV + .34 = 19.63   This is a big day for sports fans. In the US, many fans are thinking about the NBA playoffs or the start of the US Open golf championship, but those games are small potatoes compared to the World Cup. Over the next month, the World Cup will attract about 4 billion television viewers, maybe more when we consider all the digital devices that can replay the games; that’s more than the 3.6 billion viewers who watched the Beijing Olympic games; more than the 3.2 billion that watched the 2010 World Cup. By comparison, the Seahawks-Broncos Super Bowl managed a record 111 million viewers. The cumulative viewership for all the matches over the next month might top 35 billion. It’s a corporate marketing bonanza.   Over the next month, there will be countries across the globe that will quite literally shut down for 90 minutes intervals. Courts will delay hearing cases, hospitals will not schedule surgeries, offices and retail outlets and factories will shut down, the crime rate will drop, the streets will empty with almost zero traffic, planes stop flying, and trains stop running. I’ve seen it happen; and because I am blessed to be married to a lovely Brazilian woman, I have been caught up …

READ MORE →
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 …

READ MORE →
Financial Review

Monday, June 09, 2014 – Record Highs and a Few Crumbs

Record Highs and a Few Crumbs by Sinclair Noe DOW + 18 = 16,943 SPX + 1 = 1951 NAS + 14 = 4336 10 YR YLD + .02 = 2.61% OIL + 1.73 = 104.39 GOLD – .30 = 1253.00 SILV + .05 = 19.16   The major indices are now up for 4 consecutive sessions. The Dow Industrials hit a record high close for the 10th time this year. The S&P is now up 14 of the last 17 trading sessions. The last time the Dow experienced a 10% correction was back in October 2011; since then, the Dow has gained almost 60% over 32 months without a 10% correction. Typically, you can expect a correction about every 12 months on average. The longest period without at least a 10% pullback was an 82 month run from 1990-1997. The S&P 500 hit a record high close for the 19th time this year. The S&P bull market is now at 62 months and counting, the best run since 1994 to 2000.   The CBOE Volatility Index moved a little higher today to 11.34. On Friday, the VIX hit a low of 10.73, the lowest level since January 2007. The VIX can go low and stay low for an extended period of time. In 2007, after hitting a low, the VIX steadily rose for the remainder of the year but stock prices didn’t peak until the end of 2007. The VIX measures options trades, but does it really mean investors …

READ MORE →
Financial Review

Friday, June 06, 2014 – Jobs Report Friday

Jobs Report Friday by Sinclair Noe   DOW + 88 = 16,924 SPX + 8 = 1949 NAS + 25 = 4321 10 YR YLD + .01 = 2.59% OIL + .31 = 102.79 GOLD – .90 = 1253.30 SILV – .02 = 19.11   Another record high close for the Dow Industrial Average and the S&P 500.   It’s said that it takes a war to end a war; 70 years ago, 150,000 soldiers invaded Normandy, and it’s estimated that about 4,400 lost their lives in the biggest military assault in history, D-Day. There were ceremonies on the beach today, as well as locations around the world, to honor the soldiers lost and the veterans still with us; their numbers are dwindling with the passage of time, but about 3,000 made the pilgrimage to Normandy today.  For the rest of us, it’s hard to imagine what happened 70 years ago, but whatever difficulties we may face in our day to day lives seem small compared with what those men faced. This is a special day, one that should never be forgotten.   Each month we analyze the jobs report. The jobs number came in about as expected. Non-farm payrolls added 217,000 jobs in May. The unemployment rate, which is drawn from a different survey of households, remained unchanged at 6.3%.   April’s employment numbers were revised down to 282,000 jobs added from 288,000. March payroll figures were not revised, remaining at 203,000 jobs added. This is the fourth consecutive …

READ MORE →
Financial Review

Thursday, June 05, 2014 – The European Central Bank Has Done Something

The European Central Bank Has Done Something by Sinclair Noe   DOW + 98 = 16,836 SPX + 12 = 1940 NAS + 44 = 4296 10 YR YLD – .02 = 2.58% OIL – .18 = 102.46 GOLD + 9.60 = 1254.20 SILV + .24 = 19.04   The Dow and the S&P finished with record high closes.   We start in Europe. The European Central Bank has done something. No, I’m serious, they did something; not just talked about doing “whatever it takes”, they actually took some action; nothing terribly bold; probably not enough, but something. Specifically, the ECB cut its benchmark interest rate to 0.15% from 0.25%, and the deposit rate to minus 0.10% from zero. The rate cuts will take effect next week, on June 11. They are trying the  negative interest rate, which has never been tried on a large scale, in a bid to push down the value of the euro and encourage banks to invest excess cash rather than hoard it in central bank vaults.   The ECB will also begin offering four-year loans to banks at the benchmark interest rates, under conditions meant to ensure that lenders use the money to issue loans to businesses. The loans are designed so that they can’t just borrow the money from the ECB at 0.15% and toss it into government bonds.   Also, the ECB will start buying packages of loans, or asset-backed securities; another measure designed to push lending to small businesses; right now …

READ MORE →
Financial Review

Wednesday, June 04, 2014 – An Airtight Defense

An Airtight Defense by Sinclair Noe   DOW + 15 = 16,737 SPX + 3 = 1927 (record close) NAS + 17 = 4251 10 YR YLD + .01 = 2.60% OIL – .27 = 102.39 GOLD – 1.30 = 1244.60 SILV – .01 = 18.90   Eight times a year the Federal Reserve gathers economic updates from the 12 districts and publishes the information about two weeks before its FOMC meetings. The data is published in a beige folder, and that is why it is called the Beige Book, although it might actually refer to the writing style. Anyway, economic activity expanded all across the country, with most districts reporting moderate or modest growth. Consumer spending expanded across almost all districts. Tourism was another bright spot and manufacturing activity expanded across the country. Home sales were described as “mixed across the country” even as home prices continue to rise. Labor markets were described as steady. Inflation was tame, with a slight exception for higher food prices in some areas.   In other words, when the Fed meets in a couple of weeks, there won’t be any big changes in monetary policy.   The Institute for Supply Management said its services index rose to 56.3%, its highest level since August, from 55.2% in April. That’s the number and they’re sticking with it.   The US trade deficit grew to $47 billion in April, up from $44 billion in March. Exports slowed in April, down slightly to $193 billion. Imports, meanwhile, …

READ MORE →
Financial Review

Tuesday, June 03, 2014 – Always Look on the Bright Side

Always Look on the Bright Side by Sinclair Noe   DOW – 21 = 16,722 SPX – 0.73 = 1924 NAS – 3 = 4234 10 YR YLD + .06 = 2.59% OIL + .37 = 102.84 GOLD + 1.40 = 1245.90 SILV + .05 = 18.91   Automakers reported strong sales of new cars in May, the strongest annual sales rate since before the 2008 financial crisis. Industry sales rose 11.3%. Chrysler and GM had their best month of May in 7 years. A record number of recalls at GM since the first of the year did not crimp demand for the automaker’s new vehicles. Average transaction price for a new vehicle in May was $32,307, according to research firm Kelley Blue Book, which said average new-car prices were up $653 from a year ago, but down slightly from April.   The city council of Seattle Washington has voted to raise the city’s minimum wage to $15 an hour, the highest level of any major US city. Wages would begin to rise next year, ultimately reaching $15 from Washington state’s minimum of $9.32 over three to seven years, depending on the business. Under the plan, firms with more than 500 employees nationally will be given at least three years to phase in the increase, those who provide health insurance subsidies would get four years and smaller businesses would be given seven years. US minimum wage is $7.25, although 38 states have set higher levels. The states of California, Connecticut …

READ MORE →