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Friday, June 28, 2013 – Halftime

Halftime by Sinclair Noe DOW – 114 = 14,909SPX – 6 = 1606NAS + 1 = 340310 YR YLD – .05 = 2.48%OIL – .49 = 96.49GOLD + 34.50 = 1236.30SILV + 1.15 = 19.76 What a long strange trip it’s been, and we’ve only just reached the halfway mark of 2013. It started with the fiscal cliff, and after the lemmings jumped, we still had payroll tax hikes, debt ceiling battles, sequestration, mixed with assorted dysfunction; and through it all the stock market climbed. The S&P 500 hit a record high of 1687 in May; the Dow hit a high of 15,542. Those were the days of milk and cookies. And then Bernanke did a little tap dance around the punchbowl, sparking the animal spirits of the marketplace, and transforming bond market vigilantes into feral hogs, raising their snouts in the air and sniffing a whiff of blood. Volatility spiked, with more than 15 consecutive days of 100-point swings for the Dow. The bond market swooned, and June turned gloomy. Still, the first half was generally positive. The best first half for stocks since 1998. The S&P 500 closed the first half of 2013 up 12.6 percent. For the second quarter, the Dow rose 2.3%, the S&P 500 gained 2.4% and the Nasdaq Composite climbed 4.2% We are at a policy inflection point, or at least we are at a point where we can think about an inflection point, which may or may not be a bad thing if …

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Wednesday, June 26, 2013 – Still Some Work to be Done

Still Some Work to be Done by Sinclair Noe DOW + 149 = 14,910SPX + 15 = 1603NAS + 28 = 337610 YR YLD – .05 = 2.54%OIL + .17 = 95.49GOLD – 52.40 = 1226.20SILV – 1.12 = 18.62 Today we’ll cover the Supreme Court decisions, but first the economic news. As you know, the Commerce Department reports the Gross Domestic Product, or GDP of the nation on a quarterly basis. They issue an initial guesstimate, then they settle on a revised number; for example, they said the first quarter GDP was 2.4%; and then today, they revised the revision of the guesstimate. The economy did not grow at 2.4% in the first quarter, instead it was just anemic 1.8% growth. The latest numbers show that both consumer spending and trade were weaker than the earlier estimates showed. Consumers did not increase spending on health care, foods, hotel, travel, legal or personal care; big ticket purchases such as autos and electronics were flat. Investment in business structures including office buildings and plants dropped 8.3%; worse than the earlier estimates of 3.5%. Exports dropped 1.1% in the Q1; imports were down 0.4%. Now, the GDP numbers will be revised yet again. Every five years the Commerce Department overhauls GDP data to try and provide a more accurate picture of the economy; they’ll conduct that overhaul next month. And you may be wondering why this is important; after all, we’re talking about 1Q GDP and we’re almost finished with the second …

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Monday, June 17, 2013 – Preaching, Practicing, and Doing

Preaching, Practicing, and Doing by Sinclair Noe DOW + 109 = 15,179SPX + 12 = 1639NAS + 28 = 345210 YR YLD + .05 = 2.17%OIL + .07 = 97.92GOLD – 6.80 = 1385.70SILV – .24 = 21.94 President Obama is in Northern Ireland today, part of a three-day European tour that includes a G-8 summit meeting. Maybe we could call this the “Practice what I preach, not what I practice Tour”. Obama kicked off the tour with a speech in Belfast to celebrate Northern Ireland’s peace process; later he’ll talk with Euro leaders, including Russian President Putin about lifting a European arms embargo to arm Syrian rebels. The G-8 summit generally deals with economic issues, and tops on the list will be tax evasion. The Brits, lead by David Cameron and George Osborne will pressure for a comprehensive deal to include developing countries while preventing developed countries from trying to water down proposals. The two big ideas include having the beneficial ownership of offshore accounts made public and then having the G-8 countries commit to a global agreement on exchange of tax information that developing countries can join. The concern for poorer countries is that the G8 will deliver a “gold standard” for itself but offer a less satisfactory agreement for poor countries, which lose three times as much in tax evasion as they gain from aid. The Syrian conflict might actually be a positive for pushing through a deal on tax havens. It is unlikely there will be an …

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Wednesday, February 20, 2013 – Seeds of Change

Seeds of Change by Sinclair Noe DOW – 108 = 13,927 SPX – 18 = 1511NAS – 49 = 316410 YR YLD – .01 = 2.02%OIL – 2.28 = 94.82GOLD – 40.50 = 1565.10SILV – .87 = 28.67 We may be seeing the seeds of change. Today, the Federal Reserve released the minutes from the January 30 meeting of the Federal Open Market Committee. The minutes reveal that several FOMC policymakers think it might be time to shake things up, vary the pace of their $85 billion dollar per month bond purchase program. According to the minutes, the debate “emphasized that the committee should be prepared to vary the pace of asset purchases, either in response to changes in the economic outlook or as its evaluation of the efficacy and costs of such purchases evolved.” The minutes of the FOMC meeting states: “Several participants noted that a very large portfolio of long-duration assets would, under certain circumstances, expose the Federal Reserve to significant capital losses when these holdings were unwound. Others pointed to offsetting factors, and one noted that losses would not impede the effective operation of monetary policy.” The Fed  at its January meeting decided to continue buying $45 billion a month of Treasuries and $40 billion in mortgage- debt without setting a limit on the duration or total size of the purchases. Policy makers also affirmed their pledge to keep the target interest rate near zero “at least as long” as unemployment remains above 6.5 percent and inflation …

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