…Stocks bounce back (somewhat). Thus spake Clarida. Amazon looks at a weak holiday season. Alphabet stumbles. Intel beats. Twitter loses users that did not exist. AK Steel hurt by tariffs. Saudis get away with murder. Simultaneous former presidential assassination attempts. Financial Review by Sinclair Noe for 10-25-2018 DOW + 401 = 24,984 SPX + 49 = 2705 NAS + 209 = 7318 RUT + 31 = 1500 10 Y + .01 = 3.14% OIL + .16 = 66.98 GOLD – 1.60 = 1232.80   New Federal Reserve vice chair Richard Clarida on Thursday said he’d support “some further” increase in interest rates as the best way to nurse the current U.S. recovery along while guarding against any jump in inflation. In his debut speech as the Fed’s second in command and the most recent appointee by President Donald Trump, Clarida said the economy showed signs of continuing to motor along, making it appropriate to continue to gradually raise interest rates that remain “accommodative,” or encouraging of spending and investment.   Clarida’s speech puts him squarely in the mainstream of Fed thinking, though he did hint that he may favor an earlier stopping point to the current cycle of rate hikes than some of his colleagues who see rates rising to a “restrictive” level of around 3.4 percent sometime in 2020. While growth is strong and may well have shifted into a higher permanent gear, particularly after data showing higher than previously estimated household savings available to support future spending, Clarida ...

…Stock crash again. Stocks suffer when faced with trade wars, rising interest rates. Beige Book points to another rate hike. New home sales plummet. Earnings news: TSLA, MSFT, V, AMD, F, T. Financial Review by Sinclair Noe for 10-24-2018 DOW – 608 = 24,583 SPX – 84 = 2656 NAS – 329 = 7108 RUT – 57 = 1468 10 Y – .04 = 3.12% OIL – .40 = 66.42 GOLD + 3.30 = 1234.20 Once upon a time, stocks were up in 2018. Not anymore. The Dow Jones Industrial Average dropped 606 points and erased all of its gains for 2018. The S&P 500 dropped 3.1 percent and also turned negative for the year. The Nasdaq Composite fell 4.4 percent — entering correction territory — as Facebook, Amazon, Netflix and Alphabet all traded lower. That was the biggest one-day fall for the Nasdaq Composite since August 2011. Stocks have taken a beating this month. The Dow has dropped 7.1 percent in October, while the S&P 500 has pulled back 8.9 percent. The Nasdaq, meanwhile, has tumbled 11.7 percent. And since the market has taken out the lows for the year, that means it has also taken out any near-or-intermediate levels of support. We could still find some stability here, but there is a very strong chance that the market falls harder from these levels.   It is earnings season, and let’s start by taking a look at an earnings report that came out yesterday. Caterpillar’s fundamentals are strong — ...

…Earnings season onslaught just can’t beat year ago numbers. Chip stocks hit hard. Averages take big hit but rebound slightly. Saudis killed a journalist in Istanbul; now we see the cover-up. DOW – 125 = 25,191 SPX – 15 = 2740 NAS – 31 = 7437 RUT – 12 = 1536 10 Y – .03 = 3.17% OIL – 3.27 = 66.09 GOLD + 8.20 = 1230.90   The good news is that it wasn’t worse. The Dow Industrial Average was down about 550 points in early trade before a recovery, of sorts. The S&P 500 Index dropped below the October lows – also taking out the 200-day moving average – and matching the lows from July. We have not seen any really panicked selling. Today stocks moved lower, offering plenty of opportunity for a freak out but now, stocks did not freak of panic. Each of the big three U.S. benchmark indexes briefly undercut the October low early Tuesday — tagging multi-month lows — as the markets continue to seek a durable floor. And while stocks did recover from session lows, it was only after the damage was done; after the markets established new, lower levels of support. For now we have a very wide trading range, which would indicate more volatility ahead. And for Dow Theorists who have opened up their charts, you will notice an October breakdown in the Transports. The idea behind the Dow Theory is that when either industrial or transportation stocks make new highs, ...

Interview with Brian Livingston, author of “Muscular Portfolios: The Investing Revolution for Superior Returns with Lower Risk”

…31 years after Black Monday. Existing home sales flat. Italian debt probs. China’s growth slows. Earnings season. Tesla’s pricey cheap car. Attacking the midterms. Amazon HQ2. Buy a ticket. Financial Review by Sinclair Noe for 10-19-2018 DOW + 64 = 25,444 SPX – 1 = 2767 NAS – 36 = 7449 RUT – 18 =1542 10 Y + .02 = 3.20% OIL + .72 = 69.37 GOLD + 1.20 = 1227.50   Today marks the 31st anniversary of the Crash of 87. The crash was 508 points, or right at 22%. It was the largest, single day percentage point drop in market history. A similar percentage point drop today would result in a loss of over 5,700 points. Today, the Dow Industrial Average pulled off a small gain, and a small gain of 0.4 percent for the week, and the S&P 500 rose fractionally, successfully snapping a three-week retreat while the Nasdaq shed 0.6% to extend losses into a third week. Stocks are down sharply for the month. The Dow and S&P 500 have fallen more than 3 percent each in October, while the Nasdaq is down more than 7 percent.   The National Association of Realtors reports existing-home sales ran at a seasonally adjusted annual rate of 5.15 million in September. That was a 3.4% decline for the month, and the lowest pace of sales since November 2015. Sales were 4.1% lower than year-ago levels. The median sales price in September was $258,100, which was 4.2% higher than a ...

…Nearing a tipping point on market valuations, trade deals, interest rates. Economy remains strong: LEI up, jobless claims down. Earnings: Paypal, Amex, Skechers. Oil prices fall from sudden run-up. Sports Equinox. Financial Review by Sinclair Noe for 10-18-2018 DOW – 327 = 25,379 SPX – 40 = 2768 NAS – 157 = 7485 RUT – 28 = 1560 10 Y – .01 = 3.17% OIL – 1.10 = 68.65 GOLD + 3.40 = 1226.30   Stocks were down from the open but selling picked up in the late afternoon and was heavy into the close. Selling accelerated after Treasury Secretary Steven Mnuchin announced that he will not be traveling to Saudi Arabia to attend a summit known as “Davos in the Desert.” Mnuchin’s decision to drop out follows Secretary of State Mike Pompeo’s visit to Saudi Arabia, where he met with top Saudi officials to discuss the disappearance of columnist Jamal Khashoggi, who has not been seen since entering a Saudi consulate in Istanbul on Oct. 2. Trump acknowledged that Khashoggi is dead, and the consequences of his murder should be severe – but we don’t yet know what the consequences, if any, are. Trump administration officials have given the Saudi Crown Prince Mohammed bin Salman a few days to concoct an alibi or find a scapegoat.   Today’s declines added to the market’s steep losses for the month. The Dow and S&P 500 have fallen more than 4 percent each, while the Nasdaq is down nearly 7 percent in ...

…Fed minutes point to more tightening. Tax cuts lead to big deficits and moves to cut Social Security and Medicare. Small stocks suffer. BofE leery of leveraged loans. Why Saudis won’t weaponize oil prices. Legalization Day in Canada. Financial Review by Sinclair Noe for 10-17-2018 DOW – 91 = 25,706 SPX – 0.71 = 2809 NAS – 2 = 7642 RUT – 7 = 1589 10 Y + .02 = 3.18% OIL – 1.88 = 70.04 GOLD – 2.60 = 1222.90   Minutes of the Sept. 25-26 Federal Open Market Committee session were released today. Federal Reserve policymakers remain convinced that continuing to gradually increase interest rates is the best formula to preserve a steady economy. A summary of the Sept. 25-26 Federal Open Market Committee session reflected both confidence in the rate of economic growth and some hesitancy over the impact that tariffs might have on the future path. Ultimately, the committee unanimously voted to approve a quarter-point hike to its benchmark rate target, with members indicating that more increases are on the way. The increase took the Fed’s overnight target to a range of 2 percent to 2.25 percent.   Policymakers discussed what the future path would be, with members saying that there might be a period where the Fed even will need to go beyond normalization of rates and into a more restrictive stance. That would be to control inflation from overshooting the Fed’s target and to address “the risk posed by significant financial imbalances.” According to ...

….Best day for Wall Street since March. Earnings on parade: Goldman, Morgan Stanley, Domino’s, Netlfix, IBM, UnitedHealth, United Air, Target-ing Toys. More than one job for everybody. Paul Allen passes. Financial Review by Sinclair Noe for 10-16-2018 DOW + 547 = 25,798 SPX + 59 = 2809 NAS + 214 = 7645 RUT + 43 = 1596 10 Y – .01 = 3.16% OIL + .11 = 71.89 GOLD – 2.20 = 1225.50   Stocks bounced back for the best single-session gain since March.   A record 85% of fund managers surveyed by Bank of America Merrill Lynch said they think the global economy is in a late cycle, a jump of 11 percentage points from the previous record high from December 2017. A net 38% of respondents said they expect the global economy to decelerate over the next year, the worst outlook since late 2008.   Goldman Sachs reported earnings that topped estimates, with strength in its investment banking business. The bank reported earnings of $6.28 per share, versus the $5.38 expected. Revenue registered at $8.65 billion for the quarter, exceeding estimates of $8.4 billion. Net revenues for underwriting in investment banking were $1.06 billion, or 20% higher than the year-ago quarter.   Morgan Stanley shares rose after the bank beat Wall Street’s expectations in its fixed income, equities trading and investment banking businesses. Fixed-income sales and trading revenue rose by 1% to $1.2 billion, while equity sales and trading revenue climbed to $2 billion from $1.9 billion. The ...

…Deficit grows. Retail sales stagnant. Saudis threaten to weaponize oil. Sears BK. Earnings ramp up. Financial Review by Sinclair Noe for 10-15-2018   DOW – 89 = 25,250 SPX – 16 = 2750 NAS – 66 = 7430 RUT + 6 = 1553 10 Y + .02 = 3.16% OIL + .38 = 71.72 GOLD + 9.20 = 1227.70   The major averages gyrated between positive and negative territory throughout the session. At its high of the day, the Dow rose as much as 142 points; it also fell as much as 96 points.   The U.S. recorded a $779 billion deficit in the fiscal year ending Sept. 30, an increase of $113 billion, as spending climbed while revenue remained nearly flat. Outlays grew by $127 billion, or 3.2%, while government receipts rose 0.4%, or $14 billion. Compared to GDP, the deficit rose to 3.9%, up by 0.4 percentage points. Interest on the public debt shot up by $65 billion, or 14%, in part because the Treasury had to increase the principal on its inflation-protected securities. Rising interest rates and a bigger debt also played a role.   Retail sales rose just 0.1% for the second month in a row. Sales at U.S. retailers barely grew in September as Americans spent less at restaurants, grocery stores and gas stations, raising questions about whether the economy slowed toward the end of summer. Sales would have fallen if not for a big month at auto dealers. After a string of strong sales, ...

…It was an ugly week but markets bounced to the close. Bank earnings: JPM, Citi, Wells Fargo. China records a record trade surplus with US. Facebook breach update. Hurricane Michael’s wake. Financial Review by Sinclair Noe for 10-12-2018 DOW + 287 = 25,339 SPX + 38 = 2767 NAS + 167 = 7496 RUT + 1 = 1546 10 Y + .01 = 3.14% OIL + .54 = 71.51 GOLD – 6.10 = 1218.50 Yesterday we told you we were expecting a strong open for today’s session; we got it. The Dow opened about 400 points higher. Beyond that, we had to see what the markets offered. And what happened for most of the session was that stocks drifted lower; by shortly after lunch, the Dow slipped into negative territory; and that resulted in a “buy the dip” rally. Today’s rally snapped a 6-session losing streak, but it wasn’t enough to salvage a nasty week. For the week, the S&P fell 4.1%, the Dow fell 4.2%, and the Nasdaq slipped 3.7%. Wednesday’s 800-point slam on the Dow, was the third-worst single-day point loss in market history. And it might be reasonable to expect more pain in the markets, in spite of today’s bounce; certainly, more volatility in the short term. Just 19% of S&P 500 stocks remain above their short-term 50-day moving average. Meanwhile, about 75% of the S&P 500’s constituents, or about 380 companies, are in correction. Of those, 164 stocks have fallen by 20 percent or more from ...