Financial Review

What Happens When We Run Dry

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-03-16-2015.mp3Podcast: Play in new window | Download (Duration: 13:19 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe DOW + 228 = 17,977 SPX + 27 = 2081 NAS + 57 = 4929 10 YR YLD – .01 = 2.10% OIL – 1.12 = 43.88 GOLD – 4.30 = 1155.30 SILV – .01 = 15.73   Halfway through March, the S&P 500 is almost exactly flat year to date after a January tumble and February recovery, as we head into a Federal Reserve FOMC policy meeting later this week. Halfway through March a year ago, that was exactly the same situation: US stocks flat for the year directly ahead of the March Fed meeting, when the Fed’s intent to slowly tighten up policy was affirmed. It is widely expected that Fed policy setters will remove the word “patient” from their statement, opening the door for a rate increase in June.   The Fed has kept its benchmark lending rate near zero for more than six years, underpinning a strong rally in stocks. Wall Street loves to feed at the zero interest rate trough. Wall Street has a history of whining about tighter monetary policy; remember the “taper tantrum”, and so today’s gains feel like a sucker’s rally. Or the Fed could surprise us and they could very well remain patient. Crude fell for a fifth day, dropping to its lowest intraday price since March 2009. Crude oil closed $43.88 a barrel, closely following the IEA’s prediction on Friday that …

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Financial Review

How Low Did We Go

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-03-09-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe DOW + 138 = 17,995 SPX +8 = 2079 NAS + 15 = 4942 10 YR YLD – .05 = 2.20% OIL – 26 = 50.00 GOLD – 1.80 = 1167.90 SILV – .20 = 15.83   “How Low Can Stocks Go?” That was the headline in the Wall Street Journal 6 years ago. The Dow was still slogging through 4 straight weeks of losses to close at 6547. The S&P 500 was at a 12 year low of 676. The Nasdaq Composite closed at 1268.   Not many people called it at the time. A few did. John Bogle called it 2 weeks early. Barack Obama called it 5 days early. Mark Haines called it one day late. Of course, after all four tires go flat you might not make the prediction that there will be a fifth flat tire. Nobody was really confident about a bottom until about the end of the year. The current bull market is the fourth-longest on record; it’s also the fourth strongest. When will the bull market end? No idea. I could call the end of the bull market every day, and one day I would be right but that would be a waste off time for all of us.   For now, we have a nice bounce from the sell-off on Friday. Friday we learned the economy added 295,000 jobs last month …

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Financial Review

Upside-Down World

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-02-12-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe DOW + 110 = 17,972 SPX + 19 = 2088 NAS + 56 = 4857 10 YR YLD un 1.98% OIL + 2.28 = 51.12   A ceasefire between Russia and Ukraine is scheduled to start February 15, which apparently means that Putin’s little green men still have 2 days to grab as much land as they can. The agreement follows a 17 hour, four-way meeting between Russia, Ukraine, France and Germany in Minsk. The new deal revived a failed September ceasefire agreement, with commitments from each side to pull back heavy weapons, as well as greater autonomy for separatist regions in eastern Ukraine. IMF chief Christine Lagarde also announced today that Ukraine will receive about $40B in funding over the next four years.   Along with the new cease-fire agreement, that won’t actually end the fighting; there was a non-agreement agreement between Eurozone finance ministers to put off decisions on Greece’s bailout terms until next week. Greek officials were unable to reach a deal over its bailout program yesterday, but will return to Brussels on Monday to try to end the deadlock.   Meanwhile, Sweden’s central bank cut its main interest rate into negative territory and announced a bond-buying program this morning. Sweden now joins Denmark and Switzerland and the European Central Bank in negative rate land. So, now, if you want to make a deposit in Sweden, you have …

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Financial Review

Milk and Cookies in the Land of No Satisfaction

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-11-05-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review DOW + 100 = 17,484 SPX + 11 = 2023 NAS – 2 = 4620 10 YR YLD un = 2.35% OIL + 1.69 = 78.88 GOLD – 28.20 = 1141.00 SILV – .72 = 15.42 Record highs for the Dow Industrials and the S&P 500. The midterm election is history, and it was a big night for the GOP. Republicans will have at least 52 Senate seats, a gain of 7. In the House, the GOP will now have at least 243 seats, a gain of 14. The GOP also gained 2 net governorships. So it was a big night. However, Obama was not on the ballot, even though some of the campaign ads made it sound that way; he’s got 2 more years and he still has veto power. It takes a two-thirds majority in both the House and Senate to override a veto. Republicans have nowhere near two-thirds of either chamber. So, get ready for 2 more years of gridlock. One takeaway is that people are not satisfied with the economic progress of the past few years. While Wall Street is at record highs and the unemployment rate has dropped, that just isn’t enough. Fewer people participated in stock market gains and even though more people have jobs, the jobs aren’t paying what they used to. It doesn’t mean the numbers are wrong; the Dow closed at 17,484 and that …

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Financial Review

Another Glass of Kool-Aid

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-09-03-2014.mp3Podcast: Play in new window | Download (Duration: 13:15 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review DOW + 10  = 17,078 SPX – 1 =  2000 NAS – 25 = 4572 10 YR YLD – .01 = 2.41% OIL – .36 = 95.18 GOLD + 3.50 = 1270.30 SILV + .02 = 19.27   The Commerce Department reports orders for goods produced in US factories rose 10.5% higher in July, mainly due to a big surge in contracts for commercial aircraft. Yet excluding transportation goods, factory orders fell 0.8% in July.   Meanwhile, auto sales rose to a seasonally adjusted annual rate of 17.5 million in August, up from 16.5 million in July. Recalls finally caught up with General Motors and sales declined 1%; Chrysler sales were up 20%; Ford sales were up less than 1%; VW slipped 13%; Nissan sales were up 12%; and Toyota gained 6%.   Tesla is expected to announce tomorrow that it has selected Nevada to be the home of its gigafactory, which will build batteries. Arizona, California, New Mexico, and Texas were also in the running for the $5 billion plant, a key part of Tesla’s plan to scale up its production and launch a mass-market car in the next couple of years. The factory is expected to employ more than 6,000 people.   The Federal Reserve gathers information from its districts two weeks before they get together for the FOMC policy meetings. They publish the information in a beige folder, and it …

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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 …

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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. …

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Uncategorized

Wednesday, March 12, 2014 – The Next 25 Years

The Next 25 Years by Sinclair Noe DOW – 11 = 16,340SPX + 0.57 = 1868NAS + 16 = 432310 YR YLD – .04 = 2.72%OIL – 1.96 = 98.07GOLD + 17.70 = 1368.20SILV + .43 = 21.42 Let’s run through some of the economic and business news and then we’ll get to today’s anniversary. Stocks were flat. People are still trying to make heads or tails of this mixed up world. The situation in Ukraine is not improving. The EU agreed a framework for its first sanctions on Russia since the Cold War. Protesters battled soldiers in the streets of Caracas, Venezuela; two more protesters were shot; dozens were injured. Riot police clashed with demonstrators in several Turkish cities for a second day as mourners buried a teenager wounded in protests last summer. The Senate Banking Committee announced an agreement on legislation to wind down the government-owned mortgage financiers Fannie Mae and Freddie Mac. Share price cratered. Herbalife says the Federal Trade Commission has opened an inquiry into the company. The FTC confirms the inquiry, but not the nature of the inquiry. Share price cratered. Copper prices dropped to the lowest level in almost 4 years; this goes back to China, and is a canary in the coal mine for industrial demand. China is one of the metal’s biggest customers and there has been recent poor trade data out of China. Two Chinese solar companies have defaulted in the past week. The general risk from here is that this …

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Uncategorized

Tuesday, March 04, 2014 – Everybody Clap Your Hands

Everybody Clap Your Hands by Sinclair Noe DOW + 227 = 16,395SPX + 28 = 1873NAS + 74 = 435110 YR YLD + .08 = 2.69%OIL – 1.57 = 103.35GOLD – 15.90 = 1335.40SILV – .27 = 21.24 Ukraine has not exploded. The situation has not escalated, nor has it de-escalated. Apparently Russia and the West have both figured out that conflict has the potential for mutually assured destruction, not along the lines of the old nuclear Cold War, but potentially painful for both sides; and so today, everything is on hold. Vlad Putin said he sees no immediate need to invade Ukraine; the Obama administration is trying to put together $1 billion in loan guarantees. Secretary of State John Kerry visited Kiev and there is still talk of sanctions if things don’t de-escalate. Putin says sanctions would be cause for retaliation. The Ukrainian military has shown remarkable restraint, adopting a Gandhi-like non-violence stance in the face of overwhelming firepower. And for the moment, there is a standoff but not a truce. That could change tomorrow. A story in Politico today says the Russians no longer respect or fear Western leaders. Why? “Russia thinks the West is no longer a crusading alliance. Russia thinks the West is now all about the money.” Quite so. More specifically, “Putin’s henchmen know this personally. Russia’s rulers have been buying up Europe for years. They have mansions and luxury flats from London’s West End to France’s Cote d’Azure. Their children are safe at British …

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Uncategorized

Tuesday, December 17, 2013 – The Year in Financial Review

The Year in Financial Review by Sinclair Noe They say you can’t know where you’re going if you don’t know where you’re coming from, so today on the Review, we’ll review some of the financial milestones of 2013. You may recall that 12 months ago, we were headed over the fiscal cliff. The fiscal cliff really started in 2001 with the Economic Growth and Tax Relief Reconciliation Act, also known as the Bush tax cuts; after various extensions, they were set to expire at the end of 2012. And they did. In the end, Congress did not approve an extension of most of the tax cuts until late on New Year’s Day. Because all the Bush tax cuts had technically expired, Republicans could say they had not violated their No New Taxes pledge. The marginal rate on incomes over $400k increased, plus cap gains, and qualified dividends for high-income taxpayers, plus some estate tax changes, and the holiday on the payroll tax ended; just to be sure everybody felt some pain. President Obama signed the American Taxpayer Relief Act of 2012 on January 2. The ATRA is usually described as a tax increase although technically it might be a tax cut. The confusion arises because there were so many expiring provisions at the end of 2012.  ATRA could be described as either a $618 billion tax increase, relative to maintenance of all of the provisions that had been in place – that is, relative to so-called “current policy”; or a $4 …

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