8/28/14…Occupy…Burger King???

Quote of the Day from the Friars Club Encyclopedia of Jokes: “Experience: a comb life gives you after you lose your hair.” – Mark Twain

Bloomberg Quote of the day: “Never put off until tomorrow what you can do the day after tomorrow.” – Mark Twain

TB saiz: “Necessity may be the mother of invention, but complacency is the mother of destruction.” Are WE too complacent? Markets? Government? World?

Bloomberg Top Stories:

*Economy in U.S. Expands at 4.2%, Surpassing Initial Estimates for 4% Growth – no reaction!

*U.S. Stock-Market Futures Decline as Ukraine Overshadows GDP Growth Report

*JPMorgan Strengthens Its Defenses Against Hackers After Attack on Systems

*Jobless Claims in U.S. Little Changed Last Week Last Week as Labor Market Recovers

*Global Sovereign Bond Gauge Approaches Record on Speculation Over ECB

*Safeway Seen Leading bond Revival Exceeding $100 Billion…but:

*World’s Biggest Wealth Fund Says U.S. Corporate Debt Boom Coming to an End – tight spreads!

*Abercrombie Shares Tumble as Second-Quarter Sales Miss Analysts’ Estimates

*Ukraine Cites Invasion as Separatists Widen Attacks on Government Forces

*Ebola Cases Likely to Surpass 20,000 as WHO Says It Needs $490 Million – ‘who’ says?

*Ugly Is Good for the Atlantic Hurricane Forecaster Betting on Quiet session – weather patterns!

 

Wednesday’s Market Summary:

Today should be the ‘big day’ of the week for stocks ahead of Friday and Labor Day weekend!

How about this? Since 8/15’s option expiration (2.99B shares), the average total NYSE volume has been just 2.5B shares – the highest being 2.64B shares. Contrast to June with an average 3.05B shares with six sessions above 3B and three of 4B or more! Yesterday’s was another weak 2.3B shares and the market showed it…barely budging except Dow Utilities +0.8%! The Russell 2000 small cap was the ‘loser’(?) at -0.2%. The rest were between unchanged (3!) and up 0.1%. Oh, but it gets even better: the S&P 500 was one of the flat ones closing at 2000.12 up from 2000.02 – this after its first 2000 close…ever???…and get this: the session high was 2002.14 – not even at Tuesday’s 2005…this ‘rally’ is long of tooth – very! A/D’s and Breadth were barely off center and mixed while New 52 week highs and lows both declined sharply. The VIX rose but back to Tuesday’s level with a range of just 0.39 – unheard of. It stands at 11.78 +.15. Ah, but bonds had a stellar day with yields dropping sharply (as did Europe!) and the long end up over a point. Gold and Crude markets were more like stocks…little changed and dull.

Total NYSE Volume was stable again at a very weak 2.3B shares vs 2.4B vs 2.2B vs 2.3B vs 2.62B vs 2.56B vs 2.64B. Real NYSE Volume also doing nothing, and still just above Monday’s lowest of 2014: 497M shares vs 494M vs 521M vs 567M vs 542M vs 556M. Last week’s average was just 558M shares – this week be well below even that level. There have been just four sessions above 800M since 4/28! The 12-month average is a historically weak 700M shares. Since 4/30 the average volume has been just 655M shares ranging from 517M to 927B….12 month high is 2.06B shares on 9/20/13!

A/D’s were little changed and mixed: +1.3x vs +2x vs 1.6x vs -1.6x vs +1.5x; Nasdaq -1.3x vs +1.9x vs +1.4x vs -1.7x vs +1.2x. Breadth was only slightly postive: NYSE +1.2x vs +1.9x vs +1.5x vs +1.1x vs +1.5x; Nasdaq +1.2x vs +1.7x vs +1.9x vs +1.4x vs +1.4x. New 52 Week Highs down sharply to 264 vs 318 vs 296 vs 198 vs 266 – recent range is 46-580!!! New Lows halved to 26! from 50 vs 52 vs 56 vs 71 – recent range is 24-260! S&P VIX seesawing again in a very tight range at 11.78 +.15. The range was an unbelievably tight .39! vs .60 vs .53.

Bonds closed STRONG – all at their recent lows!!! 10 yr 2.36% +3/8; 30 yr 3.10% +1-1/8, the long TIP 0.83% +1-3/8!!! Overnight, breaking even higher to new 12 month lows!!! 10’s 2.33% +3/16; 30’s 3.09% +5/16; and long TIP 0.82% +7/16. The (record?) low of 0.36% was set on 4/5/13.

Libor update: 0.238% 3 mos.; 0.330% 6 mos., both remain near their record lows, set recently: 0.222% and 0.320% respectively! NOTE the Fed Funds rate has averaged 0.09% since 5/22/13 and is at 0.08-0.10% where it has been for weeks! Foreign bond yields mixed with the PIIGS yields higher (note: these are all 10yrs!): Germany 0.89%!!! -2; UK 2.37% –; France 1.23% –2; Italy 2.42% +4; Spain 2.19% +5; Portugal 3.08% +8; Greece 5.67% +15!; The recent high on selloff was 6.75%. Recently 5.42% to 12.57%. Japan: 0.48% -1.

Gold closed slightly lower in boring trading at $1283.40 -$1.80. Last Thursday, it plunged to $1272.00, lowest since 6/18 – it’s 9th straight sub-$1300. It remains well below the 40/50 and just below the 200 day m/a. 7/17’s session high was $1346.60, highest since March 19th!!! 6/9’s $1240.20 was lowest since 1/31/14!!! RES is the 200 day $1285, then the 40/50 day at $1303-6. Next support? $1270 or so! Note the recent high of $1392.60 on 3/17, highest high since 9/4/13…that too ended the session with a negative key reversal sparking the downturn! Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Overnight it is strong at $1293.40 +$10.90 with a session high of $1295.30, highest since 8/20.

Crude closed about even at $93.88 +.02 in another inside session. Last Thursday’s low was $92.50, lowest since 1/15/14! (big driving weekend ahead, then we may see gas following suit). It has had FOURTEEN handles since 6/30! 7/22’s high was $105.20, highest since 7/2. 7/15’s session low was $90.01 – lowest since 3/21. 6/20’s run to $107.73 was highest since 9/19/13 (a huge down session which put it in freefall. 3/2’s session low was $97.37, lowest since 2/4! 1/14’s low was worst since 5/2/13: $91.24! The record high of $114.83 was on 5/2/11, the low since on 10/4/11 is $74.95: $93.60 is the midpoint!!! Recent rally high and close are $110.70 and $110.53 respectively. RES at the 40 day ($99.36), then the 200 day ($99.76), then the 50 day ($100.70)…HUGE drops daily now!!! The range is $85.61-$112.24 since March 1, 2012. Overnight it is about even again at $93.94 +.06 in yet another inside session with a range of just 52 cents!!!

Global equity markets weak! – ex India: UK -0.4% vs – vs +0.4% vs closed vs -0.1%; France -0.7% vs — vs +0.6% vs +1.2% vs -0.8%; Germany -1.3%! vs – vs +0.2% vs +1.2% vs -0.4%; Japan -0.5% vs +0.1% vs -0.6% vs +0.5% vs -0.3%; Hang Seng -0.7% vs -0.6% vs -0.4% vs +0.2% vs +0.5%; Korea – vs +0.3% vs +0.4% vs +0.2% vs +0.6%; India +0.3% vs +0.4% vs – vs +0.1% vs +0.2% vs +0.2%. U.S. equity futures also lower but off their overnight lows: Dow -38 (range 88!); SPX -4.60 (10); NDQ -8.25 (18)

 

Some random thoughts:

…remember the backlash by the right of Occupy Wall Street? Bunch of hippies who need baths. To those of us from the 60’s sounds very familiar…and you know what? The hippies were more right than the rest of us – this from a Viet Nam Vet who learned the truth afterwards (the truth? You can’t handle the truth!). TB never liked the OWS moniker and would have preferred a positive RCA: Reform Corporate America and Wall Street. Might have had a chance, no? Oh, well.

Back to the present. With all these ‘hot’ tax inversions, TB has an idea: Occupy Burger King. First, some background. According to Wikipedia:

At the end of the company’s fiscal quarter in September 2012, Burger King reported it had 12,667 outlets in 73 countries; of these, 66 percent are in the United States and 95 percent are privately owned and operated. The company locations employ more than 37,000 people who serve approximately 11.4 million customers daily.

Why not picket them? They did it to Medtronic but since that was a BtoB company it fizzled quickly. Perhaps some of those franchisees are sympathetic? …they paying U.S. taxes and the like while the franchisor becomes a snow bird (tax purposes only…no movement of headquarters). If they aren’t sympathetic consider these options:

  1. Calls from customers to managers asking them what they think!
    1. If they are sympathetic, have they told the franchisor? Probably not.
  2. From there several options are available:
    1. More calls to managers,
    2. Picketing
    3. Sit-ins – buying a small drink and sitting there for hours, or TB’s fav:
    4. the drive-thru window!
      1. Read the menu and ask questions and then either leave, or
      2. Buy a small item
  • Have several cars drive thru using same technique
    1. Discouraging to other customers off to Mickey D’s
    2. Hitting them on the revenue end

Just a few of TB’s favorite things…”when the dog bites…”

TB a protestor? Unheard of but this is hurting America and before you say corporate taxes are too high, consider that only a company with a lousy accountant pays the 35% rate! …or GE and a few other big boys who are subsidized for billions (ADM’s subsidies are bigger than its bottom line!). Most other big companies pay just a fraction of the rate: 10% or lower (Medtronic was paying 9% and opted for 4% from Ireland). Now, before you label TB anti-business:

It has been described in this blog more than once how Nobel laureate Franco Modigliani (who TB was privileged to meet), was an advocate of a zero corporate tax rate. This would serve many functions:

  • Allow repatriation of offshore funds
  • Repatriating tax domicile to U.S.
  • Force companies to make sound financial decisions rather than tax-based
  • Cause dividends to be at least equal to stock buybacks
    • Buybacks are a waste – stock repurchased is held in treasury, not retired
      • Used to grant more options!
    • Eliminates double taxation of dividends
      • Dividends then taxed as ordinary income – no more qualified dividends

A friend wrote that it is the Dems who are fighting this. Wrong! It is the lobbyists who are fighting it and it is they who ‘bribe’ those in both parties…but it is not politically expedient to favor a zero corporate tax rate which Modigliani noted. How many accountants, tax preparers, or tax lawyers do you think would?…ah…another zero! This is the biggest sheltered business in America (the world?). Nobody wants to end an annuity…especially one this profitable.

…and the beat goes on…

Enjoy your day…just one more ahead of the weekend…if you are a top trader, not even that!

TB

Leave a Comment

8/27/14…the new, ‘improved’, pledge of allegiance?

Quote of the Day from the Friars Club Encyclopedia of Jokes: “Baseball’s very big with my people. It figures. It’s the only time we can shake a bat at a white man without starting a riot.”

– Dick Gregory

 

 

Bloomberg Quote of the day: “Diligence is the mother of good fortune.” – Miguel de Cercantes, father of Don Quixote, ‘jouster of windmills’.

 

Bloomberg Top Stories:

Not available today

 

Tuesday’s Market Summary:

 

Look at foreign bond yields overnight –plunging! U.S. following suit!

 

Another day and a very mixed bad. Bulls will point to the record close on the S&P 500 (2000.02), first above 2000, but when you break through a key number like that, isn’t it supposed to be a big surge?…not just a 0.1% gain? The high was just 2005…perhaps you don’t question it…like CNBC, but TB does. Furthermore it was a mixed session and a weird distribution: Russell 2000 took the honors,+0.9%! While Dow Transports declined by 0.4% (only 3 of the 20 members close up!), while the worst was Dow Utilities, -1% – pretty strange when the two best performers YTD (13.8% and 12.7% respectively), are the big losers! Another thing: total NYSE volume was just 2.4B shares – it has been between 2.2B and 2.6B shares for five sessions now…that is WEAK!

Advance/Declines and Breadth were positive, New 52 week highs rose slightly to 318, new lows were stable, and VIX barely budged for a second say at a very bullish (i.e. puts are cheap!) 11.63 -.09…with a second straight ‘extremely tight’ range of 11.33-11.93: 0.60 vs 0.53…unheard of!

 

Total NYSE Volume was stable at a very weak 2.4B shares vs 2.2B vs 2.3B vs 2.62B vs 2.56B vs 2.64B. Real NYSE Volume just slightly higher – just above Monday’s lowest of 2014: 494M shares vs 521M vs 567M vs 542M vs 556M. Last week’s average was just 558M shares – this week be even close to that level. There have been just four sessions above 800M since 4/28! The 12-month average is a historically weak 700M shares. Since 4/30 the average volume has been just 657M shares ranging from 517M to 927B….12 month high is 2.06B shares on 9/20/13!

 

A/D’s were positive: +2x vs 1.6x vs -1.6x vs +1.5x vs 1:1; Nasdaq +1.9x vs +1.4x vs -1.7x vs +1.2x vs -1.7x. Breadth was similar: NYSE +1.9x vs +1.5x vs +1.1x vs +1.5x vs +2.1x vs +4.3x! Nasdaq +1.7x vs +1.9x vs +1.4x vs +1.4x vs +1.3x vs +4.8x. New 52 Week Highs slighltyhigheer at a solid 318 vs 296 vs 198 vs 266 vs 228 vs 294 – recent range is 46-580!!! New Lows about even at 50 vs 52 vs 56 vs 71 vs 53 vs 60 – recent range is 24-260! S&P VIX slightly lower at 11.63 -.09. The range was another tight .60 vs .53: 11.24-11.77!?!

Bonds closed slightly lower: 10 yr 2.40% -1//; 30 yr 3.16% -1/2, the long TIP 0.88% -11/16. Overnight, higher: 10’s 2.37% +3/16; 30’s 3.14% +7/16; and long TIP 0.86% +1/2. The (record?) low of 0.36% was set on 4/5/13.

Libor update: 0.238% 3 mos.; 0.331% 6 mos., both remain near their record lows, set recently: 0.222% and 0.320% respectively! NOTE the Fed Funds rate has averaged 0.09% since 5/22/13 and is at 0.08-0.10% where it has been for weeks! Foreign bond yields lower for a second day (note: these are all 10yrs!): Germany 0.91%!!! -5; UK 2.39% -6!; France 1.23% -4!; Italy 2.35%!!! -6!; Spain 2.11%!!! -6!; Portugal 2.98%!!! -4; Greece 5.48%! -6!; The recent high on selloff was 6.75%. Recently 5.42% to 12.57%. Japan: 0.49% -1.

 

Gold closed slightly higher at $1285.20 +$6.30; session high was $1291.90. Last Thursday, it plunged to $1272.00, lowest since 6/18 – it’s 4th straight decline and sub-$1300 close since 8/6. It remains well below the 40/50 and is at the 200 day m/a. 7/17’s session high was $1346.60, highest since March 19th!!! 6/9’s $1240.20 was lowest since 1/31/14!!! RES/SUP is the 200 day $1285, then the 40/50 day at $1304-5. Next support? $1270 or so! Note the recent high of $1392.60 on 3/17, highest high since 9/4/13…that too ended the session with a negative key reversal sparking the downturn! Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Overnight it is slightly higher at $1285.90 +.70 in a very tight inside session!

 

Crude closed slightly higher at $93.86 +.51. Thursday’s low was $92.50, lowest since 1/15/14! (big driving weekend ahead, then we may see gas following suit). It has had FOURTEEN handles since 6/30! 7/22’s high was $105.20, highest since 7/2. 7/15’s session low was $90.01 – lowest since 3/21. 6/20’s run to $107.73 was highest since 9/19/13 (a huge down session which put it in freefall. 3/2’s session low was $97.37, lowest since 2/4! 1/14’s low was worst since 5/2/13: $91.24! The record high of $114.83 was on 5/2/11, the low since on 10/4/11 is $74.95: $93.60 is the midpoint!!! Recent rally high and close are $110.70 and $110.53 respectively. RES at the 40 day ($99.65), then the 200 day ($99.76), then the 50 day ($101.21)…HUGE drops daily now!!! The range is $85.61-$112.24 since March 1, 2012. Overnight it is slightly higher at $93.57 +.22 with a range of just 42 cents!!!

 

Global equity markets mixed: UK – vs +0.4% vs closed vs -0.1% vs +0.2%; France – vs +0.6% vs +1.2% vs -0.8% vs +0.8%; Germany – vs +0.2% vs +1.2% vs -0.4% vs +0.6%; Japan +0.1% vs -0.6% vs +0.5% vs -0.3% vs +0.9%; Hang Seng -0.06% vs -0.4% vs +0.2% vs +0.5% vs -0.7%; Korea +0.3% vs +0.4% vs +0.2% vs +0.6% vs -1.4%; India +0.4% vs – vs +0.1% vs +0.2% vs +0.2%. U.S. equity futures were slightly lower overnight. U.S. market opening little changed and mixed..

 

Some random thoughts:

 

…how about this:

 

I pledge allegiance to the wealthiest people in America, and to the greed and love of money for which they stand, one nation, totally divisible, with liberty and justice for the wealthy.

 

Wait! That sounds like oligarchy!!! …but isn’t that what we have?

On PBS News last night they interviewed Roberton Williams, head of the Tax Policy Institute who held that Burger King and Medtronics did the right thing…the law should be changed…and Congress now considering it is causing more companies to make the move. He then cited famed Supreme Court Chief Justice Learned Hand as saying people should take full advantage of the tax code provisions.

Meanwhile we have a crumbling infrastructure…military actions (no, not wars), all over the Middle East, but it is fine to siphon funds out of the U.S. to Canada…you decide.  tax inversion

 

 

Now read Robert Reich’s column from the SF Chron on how voters have lost interest in elections

Power to the people

 

Doonesbury on Sunday (thanks to Supreme Court decision that says that unlimited campaign contributions don’t influence elected officials)…as best as I can recollect:

wealthy constituent to Congressman: here is a huge sum of money and I would like you to consider an issue up before you, of course not influenced by the money.

Congressman: I would be happy to consider it for you as I would for any constituent without being influenced by the contribution

Man on the street to Congressman: I have an issue for you regarding raising wages and I cannot contribute to your campaign because I am not paid enough to make ends meet.

Congressman: I would be happy to consider it for you as I would for any constituent without being influenced by the contribution. It will receive the same consideration whether or not you contribute as that would be an illegal act. I like your idea and will not vote the way another constituent did who just financed my entire election campaign.

Next Panel: poor constituent talking to friend: what do you think?

Friend: just keep following the yellow brick road

 

Enjoy your day…had lot’s of fun ‘on a stick’ at the State Fair yesterday!

 

TB

Leave a Comment

8/26/14…bend it like Dimon…

Quote of the Day from the Friars Club Encyclopedia of Jokes: “It’s five o’clock and the children are still alive. I’ve done my job.” – Roseanne

Bloomberg Quote of the day: “In the right light, at the right time, everything is extraordinary.” – Aaron Rose…a rose by any other name?

(Repeating) This week’s economic calendar is full of important indicators. The highlight of the week will be the Q2 GDP 2nd Estimate (Thursday) and July Personal Income (Friday). We will also get July New Home Sales and August Dallas Fed Manufacturing (Monday), July Durable Goods Orders, June Case-Shiller Home Prices, August Richmond Fed Manufacturing and August Consumer Confidence (Tuesday), August Chicago PMI and August Consumer Sentiment Final (Friday). Courtesy of Economic Advisory Service

Bloomberg Top Stories:

*Burger King to Buy Tim Horton’s for $11.4 Billion in Move to Lower Taxes – off to Canada!

*Bonds Climb as Stocks in Europe Advance; Gold Rebounds, Yen Strengthens

*European Bank Cleanup Driving Sales of $1.72 Trillion of Unwanted Assets

*Pershing Square Gains 30% in 2014 as Ackman wins on Burger King (long), Herbalife (short)

*Yellen View of Labor-Market Slack Muddied by Pent-Up Wage Deflation Thesis – see???

*China Said to Weigh $16 Billion Fund for Network of Car-Charging Stations

*Tim Horton’s Coffee Poised to Bolder Burger King’s Ailing Breakfast Menu – screw taxpayers!

*Kite Pharma Rises on Study While Best Buy Declines’ U.S. Premarket Movers

*Close Your Eyes and Imagine Biting Into a Canadian Apple Pie – as American as…Canada?

*Beirut’s Champs-Elysees Beggars Reveal Despair of Refugees From Syria War

*U.S. Starts Flights Over Syria in Possible Precursor to Strikes, AP Says

*Egypt-U.A.E. Sent Secret Airstrikes Against Libya Militants, NYT Reports – need to know???

*Israel Brings Down Second Gaza High-Rise as Egypt Leads Cease-Fire Efforts – just great!

*Self-Financed Terrorists Islamic State Now Resembles Talban With Oil Wells

Monday’s Market Summary:

Oh, yeah, TB: stocks were higher…what have you got to say about that?!? Yes, they were – led by Dow Utilities (+0.6%!), while the rest settled for 0.300.5% gains…and TB doesn’t like rallies where all the indices are up about the same. Especially low volume rallies (before a long weekend), 2.2B vs 2.3B which is incredibly weak! How weak is that? Real trades on the NYSE were just 494M shares – a new 2014 low (not even 400M at the bell!); excluding 12/24’s 272M share half-session, that is the lowest volume since11/29/13…ponder that! A/D’s and Breadth were moderately positive…but look: the VIX ROSE, just .23 but on an up day with a range of just 0.52??? – virtually non-existent and fails to confirm any rally.

Total NYSE Volume was declined again to a very weak 2.2B shares vs 2.3B vs 2.62B vs 2.56B vs 2.64B. Real NYSE Volume plunged again to THE lowest of 2014: 494M shares vs 521M vs 567M vs 542M vs 556M. Last week’s average was just 558M shares – this week won’t even do that well! There have been just four sessions above 800M since 4/28! The 12-month average is a historically weak 701M shares. Since 4/30 the average volume has been just 659M shares ranging from 517M to 927B….12 month high is 2.06B shares on 9/20/13!

A/D’s were modestly positive: +1.6x vs -1.6x vs +1.5x vs 1:1 vs +1.8x; Nasdaq +1.4x vs -1.7x vs +1.2x vs -1.7x vs +1.2x. Breadth was slightly better: NYSE +1.5x vs +1.1x vs +1.5x vs +2.1x vs +4.3x! Nasdaq +1.9x vs +1.4x vs +1.4x vs +1.3x vs +4.8x. New 52 Week Highs rose 50% to 296 vs 198 vs 266 vs 228 vs 294 – recent range is 46-580!!! New Lows about even at 52 vs 56 vs 71 vs 53 vs 60 – recent range is 24-260! S&P VIX up slightly to 11.70 +.23…on an up day? The range was an unbelievably tight .53: 11.24-11.77?

Bonds closed higher for a second day: 10 yr 2.38% +3/16; 30 yr 3.13%! +1/2, the long TIP 0.85%! +9/16. Overnight, inching higher again: 10’s 2.38% +1/16; 30’s 3.12% +3/16; and long TIP 0.84% +1/4. The (record?) low of 0.36% was set on 4/5/13.

Libor update: 0.238% 3 mos.; 0.331% 6 mos., both remain near their record lows, set recently: 0.222% and 0.320% respectively! NOTE the Fed Funds rate has averaged 0.09% since 5/22/13 and is at 0.08-0.10% where it has been for weeks! Foreign bond yields generally lower and again led by the PIIGS! Germany 0.94% -1; UK 2.45% -5; France 1.28% -3; Italy 2.42%!!! -6; Spain 2.16%!!! -9!; Portugal 3.01% –; Greece 5.51%! -5; The recent high on selloff was 6.75%. Recently 5.42% to 12.57%. Japan: 0.49% -1.

Gold closed lower – traded in a $4 range! – at $1278.90 -$1.30. LastThursday, it plunged to $1272.00, lowest since 6/18 – it’s 4th straight decline and sub-$1300 close since 8/6. It remains well below the 40/50 and 200 day m/a’s. 7/17’s session high was $1346.60, highest since March 19th!!! 6/9’s $1240.20 was lowest since 1/31/14!!! First RES is the 200 day $1285, then the 40/50 day at $1305. Next support? $1270 or so! Note the recent high of $1392.60 on 3/17, highest high since 9/4/13…that too ended the session with a negative key reversal sparking the downturn! Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Overnight it is higher at $1288.00 +$9.10 with a high of $1291.70.

Crude had a second straight inside session closing at $93.35 -.30 – range was just 0.90! Thursday’s low was $92.50, lowest since 1/15/14! (big driving weekend ahead, then we may see gas following suit). It has had FOURTEEN handles since 6/30! 7/22’s high was $105.20, highest since 7/2. 7/15’s session low was $90.01 – lowest since 3/21. 6/20’s run to $107.73 was highest since 9/19/13 (a huge down session which put it in freefall. 3/2’s session low was $97.37, lowest since 2/4! 1/14’s low was worst since 5/2/13: $91.24! The record high of $114.83 was on 5/2/11, the low since on 10/4/11 is $74.95: $93.60 is the midpoint!!! Recent rally high and close are $110.70 and $110.53 respectively. RES at the 200 day ($99.77), then the 40 day ($99.93), then the 50 day ($101.21)…HUGE drops daily now!!! The range is $85.61-$112.24 since March 1, 2012. Overnight it is slightly higher at $93.57 +.22 with a range of just 42 cents!!!

European equity markets higher, Asia mixed: UK +0.4% vs closed vs -0.1% vs +0.2% vs -0.5%; France +0.6% vs +1.2% vs -0.8% vs +0.8% vs -0.8%; Germany +0.2% vs +1.2% vs -0.4% vs +0.6% vs -0.07%; Japan -0.6% vs +0.5% vs -0.3% vs +0.9% vs –; Hang Seng -0.4% vs +0.2% vs +0.5% vs -0.7% vs +0.2%; Korea +0.4% vs +0.2% vs +0.6% vs -1.4% vs +0.1% vs +0.9%; India – vs +0.1% vs +0.2% vs +0.2% vs -0.4%. U.S. equity futures slightly higher: DOW +27 (range 49); SPX +3.40 (6); NDQ +8 (10).

 

Some random thoughts:

…Jamie Dimon says “I love America’ and yes he does as it made him rich…but do anything for it? No freaking way! He and his bank have been shoveling money offshore along with the rest of the ‘proud’ Americans…bet he flies an American flag 24/7 too…would also bet he never did a day of public service in his life…especially military service! TB hates all those ‘proud’ Americans with the flags flying in their yards who act as unpatriotic as they can. (Talk of ‘the Mittster’ making another run for the Oval Office…perhaps he can ‘splain to us this time his $100M plus 401(k) and offshore accounts…could sink him!)

The latest announced overnight where Burger King is buying Tim Horton’s for better coffee and as much as everyone likes to laugh at ‘socialist’ Canada, a better tax deal! Where are the public pension funds on this? Why aren’t they selling in droves Medtronic and any other company who does this? Meanwhile the poor employees get to foot the bill…along with long-time shareholders getting hit with tax implications. Where the hell is Congress? Lining their coffers and pockets with money to keep the beat going on. Is this a great country or what? …well it used to be!

Remember Leona Helmsley? “Paying taxes is for the little people.” – talk about being ahead of her time!

Remember what TB said yesterday about getting out and having fun instead of warping your mind and spirit by watching screens all day? Well…today he is off to the Minnesota State Fair, voted THE BEST in the country…take that Iowa! Can’t think of a single reason to stay here at my desk looking wanly at the lake…can you?

Have a great day!

 

TB

Leave a Comment

8/25/14…standing still to the beat of a different drummer…

Quote of the Day from the Friars Club Encyclopedia of Jokes: “If at first you don’t succeed, destroy all the evidence that you tried.”’ – Neil Heischer

Bloomberg Quote of the day: “I not only use all the brains I have, but all that I can borrow.” – Woodrow Wilson …ousted after WWI like Churchill was after WWII…war is hell…so goodbye.

This week’s economic calendar is full of important indicators. The highlight of the week will be the Q2 GDP 2nd Estimate (Thursday) and July Personal Income (Friday). We will also get July New Home Sales and August Dallas Fed Manufacturing (Monday), July Durable Goods Orders, June Case-Shiller Home Prices, August Richmond Fed Manufacturing and August Consumer Confidence (Tuesday), August Chicago PMI and August Consumer Sentiment Final (Friday). Courtesy of Economic Advisory Service

Bloomberg Top Stories:

*Dollar Extends Gains While European Stocks Rise With S&P 500 Index Futures – weak Euro!

*Draghi Pushes ECB Closer to Quantitative Easing as Deflation Risks Climb – buy bonds!!!

*Asset-Backed Bonds Said to Face Tougher Disclosure as SEC Prepares Rules – how special!

*Israeli Central Bank Unexpectedly Lowers Benchmark Interest Rate to 0.25% – from 0.50%

*Roche Expanding In Respiratory Drugs With $8.3 Billion InterMune Purchase

*Wall Street Can’t Get Any Bond Market Respect as Yield Forecasts Dismissed – 2% 10-year?

*What Sears Could Do to Shore Up Its Balance Sheet: Borrow, Sell, Spinooff – mail order???

*Ann Taylor Should Consider Sale Amid Reduced Forecast, Engine Capital Says

*InterMune Advances While Regado Bioscienses Retreats – very selective market!

*We’re Wondering If Plague of Locusts Would Be Bad for Stocks – might be bullish! LOL!

*How Joseph Tsai Went From Yale’s Lacrosse Fields to Mega-Deals at Alibaba

*Hollande Forced to Overhaul Cabinet Amid Split on Stagnant French Economy

*Islamic State Fighters Seize Last Assad Stronghold in North Syria Provence – remember Cuba when the U.S. didn’t support Castro…look what that got us…but who will emerge leader in Syria?

*Release of U.S. Hostage Held in Syria Shows Rival Militia’s Tactics Differ – poor Foley!

 

Friday’s Market Summary:

Talk about a boring session…better yet, let’s not! Okay, other than to say everything went from +0.1% (both Nasdaqs), to unched (NYSE Transports) to -0.3% (Dow utilities)…add in NYSE Financials at -0.4% with this weird pattern: NYSE Brokers +0.4%; KBW Banks -0.2%; Nasdaq Banks unched!?! Volume was a weak 2.3B shares…don’t expect even that this Friday ahead of the Labor Day weekend! …or how about shares traded on the NYSE floor? 521M shares –just missed being a new 2014 low and for the week just 558M shares! You can make the market do anything you want – if you have the money behind you – on a day like that! A/D’s were negative and Breadth slightly positive – just to muddle things further, while New Lows slumped and New Highs followed suit…a rather boring day…that said, the VIX declined again to 11.47 with a very tight, one point range. Didn’t you have something useful and productive you could have been doing instead of following the market…like the fools on CNBC? Let’s leave it at that…shall we?

Total NYSE Volume was flat declined to a very weak 2.3B shares vs 2.62B vs 2.56B vs 2.64B vs 2.61B vs 2.96B (even that wasn’t average!). Real NYSE Volume plunged to the second lowest of 2014 and nearly number one: 521M shares vs 567M vs 542M vs 556M vs 605M. The week’s average was just 558M shares! There have been just four sessions above 800M since 4/28! The 12-month average is a historically weak 701M shares. Since 4/30 the average volume has been just 661M shares ranging from 517M to 927B….12 month high is 2.06B shares on 9/20/13!

A/D’s were modestly negative: -1.6x vs +1.5x vs 1:1 vs +1.8x vs +3.6x; Nasdaq -1.7x vs +1.2x vs -1.7x vs +1.2x vs +3x. Breadth was similar: NYSE +1.1x vs +1.5x vs +2.1x vs +4.3x! vs -1.3x; Nasdaq +1.4x vs +1.4x vs +1.3x vs +4.8x vs +1.2x. New 52 Week Highs took a header to 198 vs 266 vs 228 vs 294 vs 266 – recent range is 46-580!!! New Lows also fell to 56 vs 71 vs 53 vs 60 vs 99 – recent range is 24-260! S&P VIX however, decline to 11.47 -.29, back near its most bullish (overbought?) since 7/24. The range was a very tight 11.47-12.48.

Bonds closed higher in the long end: 10 yr 2.40% +1/32; 30 yr 3.16% +5/8 the long TIP 0.87% +3/4. Overnight, inching higher: 10’s 2.39% +1/16; 30’s 3.15% +1/4; and long TIP 0.87% +3/16. Cycle highs yields: 30 yr high was 3.97% on 12/31; the 10 yr recent high 3.03%! Long TIP was 1.64%. The (record?) low of 0.36% was set on 4/5/13.

Libor update: 0.238% 3 mos.; 0.331% 6 mos., both higher but remain near their record lows, set recently: 0.222% and 0.320% respectively! NOTE the Fed Funds rate has averaged 0.09% since 5/22/13 and is at 0.08-0.10% where it has been for weeks! Foreign bond yields sharply lower led by the PIIGS! Germany 0.94%!!! -4; UK 2.39% -1; France 1.30% -7; Italy 2.58% -1; Spain 2.24%! -14!!!; Portugal 2.99%!!! -22!!!; Greece 5.57% -18!!!!; The recent high on selloff was 6.75%. Recently 5.42% to 12.57%. Japan: 0.50% –. The good thing about trading Japanese bonds is you can sleep all day and no one will ever know!

Gold close higher in an inside session at $1280.20 +$4.80. On Thursday, it plunged to $1272.00, lowest since 6/18 – it’s 4th straight decline and sub-$1300 close since 8/6. It remains well below the 40 day AND 50 now the 200 day! 7/17’s session high was $1346.60, highest since March 19th!!! 6/9’s $1240.20 was lowest since 1/31/14!!! First RES is the 200 day $1287, then the 40/50 day at $1307. Next support? $1270 or so! Note the recent high of $1392.60 on 3/17, highest high since 9/4/13…that too ended the session with a negative key reversal sparking the downturn! Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Overnight it is little changed after a failed rally attempt at $1279.30 -.90.

Crude also had an inside session closing at $93.65 -.31. Thursday’s low was $92.50, lowest since 1/15/14! (big driving weekend ahead, then we may see gas following suit). It has had FOURTEEN handles since 6/30! 7/22’s high was $105.20, highest since 7/2. 7/15’s session low was $90.01 – lowest since 3/21. 6/20’s run to $107.73 was highest since 9/19/13 (a huge down session which put it in freefall. 3/2’s session low was $97.37, lowest since 2/4! 1/14’s low was worst since 5/2/13: $91.24! The record high of $114.83 was on 5/2/11, the low since on 10/4/11 is $74.95: $93.60 is the midpoint!!! Recent rally high and close are $110.70 and $110.53 respectively. RES at the 200 day ($99.77), then the 40 day ($100.24), then the 50 day ($100.48)…the latter two in steep freefall! The range is $85.61-$112.24 since March 1, 2012. Overnight it is little changed in a narrow inside session at $93.69 +.04.

Global equity markets higher, led by Europe…UK closed: UK closed vs -0.1% vs +0.2% vs -0.5% vs +0.5%; France +1.2% vs -0.8% vs +0.8% vs -0.8% vs +0.4%; Germany +1.2% vs -0.4% vs +0.6% vs -0.07% vs +0.9% vs +1.5%; Japan +0.5% vs -0.3% vs +0.9% vs – vs +0.8%; Hang Seng +0.2% vs +0.5% vs -0.7% vs +0.2% vs +0.7%; Korea +0.2% vs +0.6% vs -1.4% vs +0.1% vs +0.9%; India +0.1% vs +0.2% vs +0.2% vs -0.4% vs +0.1% vs +1.1%. U.S. equity futures strong but off session highs – gapped higher on open!!! DOW +65 (range 50); SPX +8.50!!! (8); NDQ +18.25! (15).

Some random thoughts:

…haven’t you got anything better to do in the week ahead of Labor Day than think about the stock market? I/you/we have no idea where it is going to end up so why not get out there and enjoy the summer?…have fun??? The market will go where the market wants to go – or more accurately where the big boys ‘make it’ go.

Take a trip…work a crossword…have lunch with a friend…get a colo-rectal exam…at least that’s productive…not enjoyable, but productive. Now get out of here!

TB

Leave a Comment

8/22/14…a bank’s a bank…right?

Quote of the Day from the Friars Club Encyclopedia of Jokes: “For every set of horseshoes human beings use for luck, somewhere in this worlds there’s a barefoot horse.” – Allan Sherman…”for want of a nail…a shoe was lost…for want of a shoe…a horse was… – Old Proverb

Bloomberg Top Stories: “Peace is when time doesn’t matter as it passes by.” – Maria Schell – TB can’t recall the last time it didn’t matter…pre-9/11 for sure…when was Bosnia? …and getting worser and worser as we speak!

*European Stocks Fall With U.S. Index Futures as Ukraine Tensions Escalate – WTF???
*Argentina Devaluation Speculation Spurs Biggest Peso Declines Since January – use $!
*Russia Stocks Halt Best Rally Since 2005 as Ruble Drops on Convoy Concerns – well…DUH!
*Dynegy to Buy Duke, Energy Capital Generation Assets for $6.25 Billion
*BofA Gets Credit in Mortgage Settlement for Other Firm’s Consume Relief – oh, how special!
*Fed’s Bullard Says Jobs Gains Pointing to Earlier Interest-Rate Increases – wanna bet?
*Love Affair With Junk Resumes With Biggest Inflows of 2014 – …and when it ends???
*Billionaire Fredrikson’s North Atlantic Buys Rosneft Land Drilling Fleet – Da! ..or nyet?
*Italy Struggling Under Debt Burden Seen Needing Draghi Touch – arrevaderci, Roma!
*Fed Hawks Take to the Air First as Symposium Starts at Jackson Hole – fools that they are…
*Ukraine Says Russia Aid Convoy’s Entry Without Consent Amounts to invasion…and the beat goes on…and on…
*Hunt for Foley’s Killer Expands to Social Media, High-Technology Sleuthing – a very sad case!
*Ukraine Awaits Stabilization Plan From Markel as Germany Flexes Influence – against madman!
*Marijuana Law Mayham Splits U.S. in Half as Travelers End Up in Handcuffs – unintended cons.

Thursday’s Market Summary:

Does anyone recall the TV sitcom, ‘Wings’? One of the characters, a devious older guy (aren’t we all?), would tell one of them something and something else to another until he got them to do what he wanted. He chuckled: “I tell them to do it and they do it!” Why bring this up? Because yesterday’s rally was brought to you courtesy of the Ukraine! It’s better…so stocks rally! Do you honestly believe any credible investor bought on that news? If so, you didn’t look at the ‘unchanged’ weak NYSE Volume…or the total lack of retail! NYSE floor trades up slightly but still near 2014 lows! Just ONE day this week with volume above 600M – by just 5M and that is 100M below the 12-month average – thus far this week it is just 567M shares! That’s 32M below LAST WEEK’s 594M – that with an options expiration! It’s a game…pure and simple. So what was the impetus for the ‘uptick’? Ukraine tensions easing…well, guess what? Today they are worse and as the headline above says. European and U.S. stock futures are weak! Don’t you get it? Fundamentals don’t matter…only headlines, misinformation, and even disinformation!

Even with all that ‘good’ news, Dow Transports were in the red by 0.4%! Biggest gainer was the Dow 30 +0.4%, the rest were up from 0.1% (NDQ 100 and Dow Utilities) to 0.3% (S&P 500) – not much of a rally. Transports SPIKED on the open rising 0.2%+, then plunging within minutes for a decline of 65 points or 0.8% and never saw green again…just slithered into the close. All week they have been mercurial! A/D’s and Breadth were slightly positive; New 52-week highs continue to oscillate but in positive territory while new lows moved up. Volatility was unchanged BUT the high end of the range moved up to 13.51 after two days without a ‘13’ print!

Total NYSE Volume was flat for a third day at a weak 2.62B shares vs 2.56B vs 2.64B vs 2.61B vs 2.96B. Real NYSE Volume up slightly but at a very WEAK 567M shares vs 542M vs 556M vs 605M vs 758M. Last week’s average was just 594M shares! There have been just four sessions above 800M since 4/28! The 12-month average is a historically weak 701M shares. Since 4/30 the average volume has been just 662M shares ranging from 517M to 927B….12 month high is 2.06B shares on 9/20/13!

A/D’s were minimally positive: +1.5x vs 1:1 vs +1.8x vs +3.6x vs -1.3x; Nasdaq +1.2x vs -1.7x vs +1.2x vs +3x vs +1.2x. Breadth was similar: NYSE +1.5x vs +2.1x vs +4.3x! vs -1.3x vs +1.8x; Nasdaq +1.4x vs +1.3x vs +4.8x vs +1.2x vs +1.6x. New 52 Week Highs rose to 266 vs 228 vs 294 vs 266 vs 193 – recent range is 46-580!!! New Lows also rose to 71 vs 53 vs 60 vs 99 vs 72 – recent range is 24-260! S&P VIX steady at 11.76 -.02 from most bullish (overbought?) since 7/24. The range widened to 11.52-13.51 – first ‘13’s print in three sessions

Bonds closed higher…especially the volatile of late long TIP! 10 yr closed at 2.41% +3/16; 30 yr 3.19% +5/8 the long TIP 0.90% +15/16. Overnight the rally continues: 10’s 2.40% +1/16; 30’s 3.18% +1/4; and long TIP 0.89% +3/8. Cycle highs yields: 30 yr high was 3.97% on 12/31; the 10 yr recent high 3.03%! Long TIP was 1.64%. The (record?) low of 0.36% was set on 4/5/13.
Libor update: 0.235% 3 mos.; 0.327% 6 mos., both remain near their record lows, set recently: 0.222% and 0.320% respectively! NOTE the Fed Funds rate has averaged 0.09% since 5/22/13 and is at 0.08-0.10% where it has been for weeks! Foreign bond yields lower ex-Greece: Germany 0.98%! -1; UK 2.38% -1; France 1.37% -1; Italy 2.58% -1; Spain 2.39% -1; Portugal 3.21% +1; Greece 5.76% +12!; The recent high on selloff was 6.75%. Recently 5.42% to 12.57%. Japan: 0.50% -2.

Gold plunged to $1272.00, lowest since 6/18, and closed at $1275.40 -$19.80! It’s 4th straight decline and sub-$1300 close since 8/6. It remains well below the 40 day AND 50 now the 200 day! 7/17’s session high was $1346.60, highest since March 19th!!! 6/9’s $1240.20 was lowest since 1/31/14!!! First RES is the 50 day $1305, then the 40 day at $1307, and now the 200 day, $1285. Next support? $1270 or so! Note the recent high of $1392.60 on 3/17, highest high since 9/4/13…that too ended the session with a negative key reversal sparking the downturn! Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Overnight it is slightly higher in a tight inside session at $1277.70 +$4.00.

Crude inched higher for a second day but the shift to the Oct. contract pushed it further into negative territory. It ‘gapped down’ on the open then plunged to $92.50, lowest since 1/15/14! (why isn’t gasoline following suit? Summer driving?)…it now has had FOURTEEN handles since 6/30! It closed at $93.96 +$.51. 7/22’s high was $105.20, still highest since 7/2. 7/15’s session low was $90.01 – lowest since 3/21. 6/20’s run to $107.73 was highest since 9/19/13 (a huge down session which put it in freefall. 3/2’s session low was $97.37, lowest since 2/4! 1/14’s low was worst since 5/2/13: $91.24! The record high of $114.83 was on 5/2/11, the low since on 10/4/11 is $74.95: $93.60 is the midpoint!!! Recent rally high and close are $110.70 and $110.53 respectively. RES at the 200 day ($99.77), then the 40 day ($100.55), then the 50 day ($101.74)…the latter two remain in freefall! The range is $85.61-$112.24 since March 1, 2012. Overnight it is weaker in a narrow inside session at $93.17 -.78.

European equity markets weaker, Asia mixed: UK -0.1% vs +0.2% vs -0.5% vs +0.5% vs +0.7%; France -0.8% vs +0.8% vs -0.8% vs +0.4% vs +0.5%; Germany -0.4% vs +0.6% vs -0.07% vs +0.9% vs +1.5%!; Japan -0.3% vs +0.9% vs – vs +0.8% vs flat; Hang Seng +0.5% vs -0.7% vs +0.2% vs +0.7% vs –; Korea +0.6% vs -1.4% vs +0.1% vs +0.9% vs -0.5%; India +0.2% vs +0.2% vs -0.4% vs +0.1% vs +1.1%. U.S. equity futures weak but coming back: DOW -5 (range 65); SPX -1.90 (8); NDQ — (16).

Some random thoughts:

…BofA posted a 4.2% gain yesterday resuming its role as THE most active NYSE stock. Yes, indeedy, paying a $16.7 billion fine can do that…it can? Oh yes, the rotten government fined them for trying to reneg on the Merrill Lynch deal…extortion! You bet it was! But that was only because Ken ‘I never met a buyout opportunity I didn’t like’ Lewis, originally wanted the deal. Merrill Lynch didn’t sink BOA…in fact it is now arguably its best income producing asset. Unlike, his prior proud purchase of Countrywide which was foolish, arrogant…and a lot of other adjectives – some expletives! (by they way, Mozillo, who paid a $44 million fine without admitting guilt, may again be sued civially…just heard this…and the beat goes on!)

Lots of damning comments yesterday about the Federales…the best was from former Well Fargo CEO Richard Kovacevich who said it was punishing BofA for the sins of Merrill, branding it ‘extortion’. RK has been an outspoken opponent of the government in the ‘bailout’ since his bank was forced to accept a loan…ignoring the fact that the point was to not single out any bank as being clean…thus causing a ‘flight to quality’ to that bank! How do we know this? Continental Illinois in 1985 when Ronald Reagan overrode his Treasury Secretary Don Regan (TB’s former boss at ML), bailing it out and creating moral hazard now known as ‘too big to fail’.

What did TBTF do? It enriched the eight biggest banks – since Continental was #8 – by ‘guaranteeing’ that the government would bail them out. The big banks profited from this at the expense of foreign banks and even more significantly smaller…especially independent banks!

But back to Wells Fargo. Who was THE biggest sub-prime lender? WFC! How many subprime loans did WFC have on its books? Zero, zip, zilch! Those were sold off to the ‘sucker’ brokers likes Merrill…ah but in their greed and profit making algorithm they erred: they took down the profitable home equity loans and unsecured loans which with the ‘first’ added up to 105% of the selling price…in fact they advertised that they wanted ‘you to be able to afford a home’! TB heard the commercial and was shocked that this wasn’t some schlock mortgage company but one of the most respected banks in the U.S. if not the world! They got stung on those ‘profitable’ home equity and unsecured portions when the equity evaporated…poor old Wells. What goes around, comes around…well, sometimes…and in this case it did…in spades…only the magnitude was smaller thus impacting the bank less but they were clearly culpable for the crisis too!

To Kovacevich’s credit, his bank was nearly ‘robbed’ by the Fed when they tried to merge ‘loser’ Wachovia with an even bigger loser, Citi…which made no sense from a business standpoint (too similar an area of customers), and less from a credit standpoint. Wells made a good and substantially better deal for Wachovia…and look how much better everyone fared – financially – then had Citi, which is still way under water from 2007, plus it increased competition with BofA.

Before you think TB is enamored by the ‘work’ of the Feds, recall yesterday’s column…we need more civil suits against the perps at the banks/broker…and AIG was a classic! Let’s stop making shareholders pay for crimes commited by individuals…under the ‘watchful eye’ of their CEO’s!

Ignore all the above if you like bank stocks and their miserable dividends (BofA 0.3%; C 0.08%!; USB 2.3%; JPM/WFC 2.7% – inflation adjusted they are peanuts and with great risk!).

That’s it…you decide! You can still do that, right?

Enjoy your weekend…there is more to life than investing…if you can afford it!

TB

Leave a Comment

8/21/14…have our bankers ever heard of The Four Way Test?

Quote of the Day from the Friars Club Encyclopedia of Jokes: “My grandfather’s a little forgetful. One day he took me aside and left me there.” – Ron Richards

Bloomberg Quote of the Day: “The welfare of each is bound up in the welfare of all.” – Helen Keller…a woman with incredible ‘foresight;…interestingly it was Plato who said, “he who sees with his eyes is blind.” – a lot of wisdom in both those quotes. TB

Bloomberg Top Stories:

 *European Stocks Rise With U.S. Equity Futures on Stimulus Bets; Gold Drops – plunges!

*First-Time Jobless Claims in U.S. Decreased More Than Estimated Last Week

*Millennial Bankers Get 20% Raises as BofA; Goldman Sachs Fight Defections – hear! Hear!

*Argentina’s Defiance in Debt Swap Dims Chances for Bond-Market Redemption – in your face!

*Family Dollar’s Board Rejects Bid From Dollar General, Favors Dollar Tree – still it’s Dollars!

*AstraZeneca Is Tougher Target for Pfizer as Possibility of New Bid Looms

*Bank of America Mortgage Settlement with U.S. Said Coming Soon – just out: $16.67B

*Draghi Gets His Weaker Euro When Reeling Economy Needs It Most

*Allegan Discussions to Acquire Salix in Defensive Move Said to Be Dormant

*Hook-Up Culture at Harvard, Stanford Wanes a Men Confront Assault Alarm

*Hostage Rescue by U.S. Forces Failed Earlier this Year After Ransom Demand

*Retooled Hamas Bloodies Israel in Gaza With a Little Help From Hezbollah

*Cameron Reminds Police of Terror Laws in Hunt for Briton Who Killed Foley

*Ukraine Deaths mount as Fighting With Pro-Russia Separatists Intensifies

(to recap: its an ugly world out there!!!)

Wednesday’s Market Summary:

“Curiouser and curiouser”, said Alice – and that is what this dull and duller market is telling us as “tomorrow and tomorrow and tomorrow creeps on its petty pace.” (the Bard, and the title of a Kurt Vonnegut short story). Ok no more ‘waxing’ poetic for today. This is what happens when you try to follow a market (that isn’t one) too closely, right? Ah, good! You agree!!!

Not much of an ‘up’ session if you can call +0.6% by Dow Transports, +0.4% Dow, +0.3% S&P ‘positives’ – TB can’t…especially when Dow Utilities even rose 0.2%, while the ‘stalwart’(?) Nasdaq indices were both FLAT as boards and the Russell 2000 declined by 0.4%? NYSE Financials rose by just 0.1% (NYSE Brokers flat; KBW Banks +0.2%; Nasdaq Banks -0.2% – but look BofA settles with the Feds for $17 Billion and guess what? The stock, which was unchanged at the time of the announcement ROSE 05% – this is truly a sick society…of investors anyway!

A mixed bag for A/D’s: NYSE 1:1; Nasdaq -1.7x!. Breadth slightly positive on both. New 12-Month highs dropped back by ¼ to 228 while New lows rose slightly to 63. NYSE Volume fairly steady but still below average while NYSE floor trades slipped to an even weaker 542M – contrast to the 12-month average which has been in decline since 4/30 of 542M shares…and since the end of April it is just 664M – incredibly low and long enough to not blame it on the ‘summer doldrums’ – which are acting like global warming (did you see where Siberia is developing sinkholes???).The VIX decline again to 11.78 – clearly in bull (overbought?) territory??? And with a range of just .64 – back to back tight ones! All this on the heels of an FOMC meeting which had more of the ‘non-voting members looking favorably towards ‘tightening’ – at some point but the lone voting dissenter was once again the Dallas Fed’s Plosser…he ain’t no Edward Gramlich…not by a damn sight (ah, another reference to seeing (Merriam Websters’ defines it a damn sight as ‘much’ – one of TB’s grandpa’s favorites!

Total NYSE Volume was flat for a third day at a weak 2.56B shares vs 2.64B vs 2.61B vs 2.96B vs 2.7B vs 2.59B vs 2.76B vs 2.87B. Real NYSE Volume slipped again to a very WEAK 542M shares vs 556M vs 605M vs 758M vs 517M vs 559M vs 543M vs 596M. Last week’s average was just 594M shares! There have been just four sessions above 800M since 4/28! The 12-month average is a historically weak 701M shares. Since 4/30 the average volume has been just 664M shares ranging from 517M to 927B….12 month high is 2.06B shares on 9/20/13!

A/D’s were mixed and minimal: 1:1! vs +1.8x vs +3.6x vs -1.3x vs +2.1x; Nasdaq -1.7x vs +1.2x vs +3x vs +1.2x vs +1.3x. Breadth was slightly positive: NYSE +2.1x vs +4.3x! vs -1.3x vs +1.8x vs +2.1x; Nasdaq +1.3x vs +4.8x vs +1.2x vs +1.6x vs +3x. New 52 Week Highs off by ¼ to 228 vs 294 vs 266 vs 193 vs 141 vs 140 vs 96 – recent range is 46-580!!! New Lows little changed at 62 vs 53 vs 60 vs 99 vs 72 – recent range is 24-260! S&P VIX declined for a 2nd day to 11.78 -.43 – most bullish (overbought?) since 7/24. The range dipped to 11.60-12.84 – no ‘13’s or ‘14’s for a second day, not seen since 7/25.

Bonds closed modestly weaker again but not far off the ‘old’ 12-month highs: 10 yr closed at 2.403 -1/4; 30 yr 3.22%- 1/16?; the long TIP 0.93% -5/16. Overnight they are in the red again: 10’s 2.44% -1/8; 30’s 3.23% -3/16; and long TIP 0.94% -1/4. Cycle highs yields: 30 yr high was 3.97% on 12/31; the 10 yr recent high 3.03%! Long TIP was 1.64%. The (record?) low of 0.36% was set on 4/5/13.

Libor update: 0.234% 3 mos.; 0.329% 6 mos., both remain near their record lows, set recently: 0.222% and 0.320% respectively! NOTE the Fed Funds rate has averaged 0.09% since 5/22/13 and is at 0.08-0.10% where it has been for weeks! Foreign bond yields mixed…PIIGS lower; all at/near 12-month low yields: Germany 1.00% +1; UK 2.43% +1; France 1.39% +1; Italy 2.57% -2; Spain 2.37% -3; Portugal 3.22%! -7; Greece 5.66% +1; The recent high on selloff was 6.75%. Recently 5.42% to 12.57%. Japan: 0.52% +1.

Gold closed slightly weaker for a 3rd straight decline, but making another new low of $1288.70 (session high was $1299.30), and with the 3rd straight sub-$1300 close since 8/6: $1295.20 -$1.50 It remains well below the 40 day AND 50 day while the 200 day is within $9. 7/17’s session high was $1346.60, highest since March 19th!!! 6/9’s $1240.20 was lowest since 1/31/14!!! First RES is the 50 day $1305, then the 40 day at $1309, leaving the 200 day as sole support at $1286. Note the recent high of $1392.60 on 3/17, highest high since 9/4/13…that too ended the session with a negative key reversal sparking the downturn! Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Overnight it is being slammed to $1280.60 -$14.60 but well off an overnight new low of $1274.90, lowest since 6/18!

Crude finally closed higher but of little import following Tuesday’s new recent low of $94.27, lowest since 1/21/14! It closed at $96.07 +$1.59. 7/22’s high was $105.20, still highest since 7/2. 7/15’s session low was $90.01 – lowest since 3/21. 6/20’s run to $107.73 was highest since 9/19/13 (a huge down session which put it in freefall. 3/2’s session low was $97.37, lowest since 2/4! 1/14’s low was worst since 5/2/13: $91.24! The record high of $114.83 was on 5/2/11, the low since on 10/4/11 is $74.95: $93.60 is the midpoint!!! Recent rally high and close are $110.70 and $110.53 respectively. RES at the 200 day ($99.77), then the 40 day ($100.86), then the 50 day ($101.95)…the latter two remain in freefall! The range is $85.61-$112.24 since March 1, 2012. Overnight the lead shifted to October which ‘adjusted’ the close to $93.45 creating a ‘gap down’ on this mornings open where it plunged again to $92.50, lowest since 1/15/14! (why isn’t gasoline following suit? Summer driving?)…it now has had FOURTEEN handles since 6/30! Last print is $92.84 -.61!!!

European equity markets bouncing back and have now been up 3 of last 4 sessions; Asia mixed: UK +0.2% vs -0.5% vs +0.5% vs +0.7% vs +0.8%; France +0.8% vs -0.8% vs +0.4% vs +0.5% vs +1.2% vs +1%; Germany +0.6% vs -0.07% vs +0.9% vs +1.5%! vs +0.9%; Japan +0.9% vs – vs +0.8% vs flat for 2 days; Hang Seng -0.7% vs +0.2% vs +0.7% vs – vs +0.6%; Korea -1.4%!!! vs +0.1% vs +0.9% vs -0.5% vs closed; India +0.2% vs -0.4% vs +0.1% vs +1.1% vs closed. U.S. equity futures higher after being weak early in the session: DOW +35 (range 53); SPX +3 (7); NDQ +4 (13). 10:30am EDS update: Dow is up 50 BUT Transports, yesterday’s big winner are -23! The rest are pretty much unchanged…hmmm.

 

Some random thoughts:

…how much longer do true shareholders have to endure paying for the sins of the bankers? JPMorgan shareholders have paid dearly more than 400 times since the crisis began, plus one more (arbitration) due to a breach of contract that cost the bank (read: shareholders), $385 Million by buying the managed accounts of American with a promise not to move them out of American Century managed accounts to JPMorgan proprietary funds unless they provided higher returns to investors. In less than six months they had violated it and the man in charge was Jes Staley, who negotiated the contract in the first place? JPM/American Century arbitration Did Staley get fired? Far from it…he was promoted and got a $5 million bonus …same as Ina Drew (she got the same bonus that year and later was the only  one to return it – voluntarily!), who took the fall for the ‘London Whale’ experience (Staley was sent over to London as part of ‘Seal Team Six’ to solve the problem…more bonuses until he left to go to another firm (Blue Mountain Capital), good luck to them…and of course to the creative Mr. Staley. Again: who paid for these lawsuits? Shareholders…loyal shareholders (just as with BofA where they earn a just-upped 5 cent a shere dividend – 1.2% annualized… big whoopee! What kind of fools do this…especially when the ‘perps’ face no clawbacks and still hold their jobs while earning more??? Where is the damned SEC? Let’s ask Henry Paulson what he thinks…after all it was he who told the banks to increase bonuses to restore ‘confidence’???

So far there have been just TWO perps that have been singled out: Countrywide’s Angelo Mozilo who paid a $49MM(?) fine without admitting guilt for selling shares while telling investors all was well…didn’t we pass a law to prevent this after Enron (has it ever been used in court?…even once??? The other was the ebullient Ken Lewis who bought the company for BofA saying they sent their examiners in and they looked at every loan…not very long apparently…they spent one week there! He was charged with misinforming shareholders of the true condition and recently fined $25MM by the SEC…TB was ecstatic…that emotion lasted for less than a half hour when it was announced it was covered by the banks D&O insurance…got it? The shareholders will pay yet again in the form of higher insurance!

That’s enough for now folks…TB’s blood pressure is rising…as he is sure Martha Stewart’s must be having been sentenced to five years for lying to investigators about ONE insider trade (an irony to this is that the stock she sold on her friend/CEO’s advice came back and was at a much higher price less than a year later – insult to injury. Why don’t more financial execs face the ‘perp walk’? Guess Holder never read Bonfire of the Vanities…sheesh!

…having a hard time with Rotary’s Four WayTest today!

Have a great day!

TB

Leave a Comment

8/20/14…rally, what rally? (market commentary only)

Quote of the Day from the Friars Club Encyclopedia of Jokes: “My grandfather’s a little forgetful. One day he took me aside and left me there.” – Ron Richards

Bloomberg Quote of the Day: “It takes a genius to whine appealingly.”–F.Scott Fitzgerald– he did!

Bloomberg Top Stories:

*Argentine Bonds Weaken on Plan to Pay Bondholders Locally to Sidestep U.S. – Hah!

*Target Lowers Its Earnings Forecast as Sales Slump, Canadian Losses Widen – bad news!

*Stocks in U.S. Fluctuate While Bonds Fall (slightly!), Dollar Strengthens Before Fed

*Carney Loses Interest-Rate Consensus as Two officials Vote for Increase – oops…

*Stiglitz Says Stalling Euro-Area Economy Reflects Dismal Failure of Policy

*Moody’s Downgrade of South Africa’s Banks Seen Raising Sovereign Risk

*Hertz Falls as Accounting Review Prompts Company to Withdraw 2014 Forecast- it ‘hurts’

*Deflation’s Return Threatens Linkers Record Breaking Rally in Canada!

*Chinese Millionaire Roils Property Brokers Over Shrinking Malibu Mansion – CB misstated size!

*Ferguson at Turning Point as Streets Return to ‘Relative’ Calm After Clashes

*Ukraine Forces Push Back Separatists in East as Diplomacy Efforts Escalate

*F-35 Software Testing by Pentagon Slowed by Restrictions After Engine Fire

*Bach Dreams Shattered by Gaza Recurring War Beseiges Palestinian Strip

Tuesday’s Market Summary:

What can you say about a rally there the best performer is Dow Utilities??? Here’s a start: they were up 1.2% more than double any other index…and if you take the three weakest together (Dow Transports +0.1%; Nasdaq Comp and Russell 2000 +0.4%), they still couldn’t match it! NYSE Volume was stable at 2.64B but NYSE-traded shares declined by 556M…111M less than that at the closing bell! Do we have to ask who is doing the trading? Not mom and pop! Not institutions…just same old, same old…not going to bother with much more other than A/D’s and Breadth were solidly positive, but not great, and new 52 week highs rose again to 294 vs 266 while new lows slipped a bit. As for those highs, when you are near record highs, doesn’t it stand to reason that a lot of stocks will be making new ones? TB’s just sayin’… The VIX declined slightly again to 12.21…TB sees this as VULNERABLE. Range was very narrow so not much action…how low can it go? Hmmm. Bonds weaker overnight…gold and crude still feeble.

Total NYSE Volume was basiclally flat at a weak 2.64B shares vs 2.61B vs 2.96B vs 2.7B vs 2.59B vs 2.76B vs 2.87B. Real NYSE Volume dropped to a WEAK 556M shares from 605M vs 758M vs 517M vs 559M vs 543M vs 596M. Last week’s average was just 594M shares! There have been just four sessions above 800M since 4/28! The 12-month average is a historically weak 702M shares. Since 4/30 the average volume has been just 665M shares ranging from 517M to 927B….12 month high is 2.06B shares on 9/20/13!

A/D’s were positive for a 2nd session: +1.8x vs +3.6x vs -1.3x vs +2.1x vs +2.9x; Nasdaq +1.2x vs +3x vs +1.2x vs +1.3x vs +2x. Breadth was even better: NYSE +4.3x! vs -1.3x vs+1.8x vs +2.1x vs -1.8x; Nasdaq +4.8x!!! vs +1.2x vs +1.6x vs +3x vs -2.1x.. New 52 Week Highs close to a double at 266 vs 193 vs 141 vs 140 vs 96 – recent range is 46-580!!! New Lows down by 1/3 to 60 vs 99 vs 72 vs 79 vs 84 – recent range is 24-260! S&P VIX reversed yet again (not a good sign when it is this low to 12.32 -.83. The range ‘narrowed’ to 12.26-12.85 – no ‘13’s or ‘14’s…a first in a while: since 7/25!

Bonds closed weaker again especially the long TIP but still near the ‘old’ 12-month highs: 10 yr closed at 2.40% -1/16; 30 yr 3.21%- 1/4; the long TIP 0.92% -11/16! Overnight they are slightly weaker again: 10’s 2.41% -1/8; 30’s 3.12% -3/16; and long TIP 0.93% -1/4. Cycle highs yields: 30 yr high was 3.97% on 12/31; the 10 yr recent high 3.03%! Long TIP was 1.64%. The (record?) low of 0.36% was set on 4/5/13.

Libor update: 0.232% 3 mos.; 0.329% 6 mos., both remain near their record lows, set recently: 0.222% and 0.320% respectively! NOTE the Fed Funds rate has averaged 0.09% since 5/22/13 and is at 0.08-0.10% where they have been for weeks! Foreign bond yields, ex-UK, lower across the board – especially Portugal and Greece; all at/near 12-month low yields: Germany 0.98% –2; UK 2.42% +2; France 1.38% -1; Italy 2.57% -2; Spain 2.37% -4!; Portugal 3.39% -11!!!; Greece 5.67% -8!; The recent high on selloff was 6.75%. Recently 5.42% to 12.57%. Japan: 0.51% +2.

Gold closed weaker for a 3rd day, leaving intact Friday’s low of $1293.00, but with the 2nd straight sub-$1300 close since 8/6: $1296.70 -$1.090 It is well below the 40 day AND 50 day while the 200 day is within $10. 7/17’s session high was $1346.60, highest since March 19th!!! 6/9’s $1240.20 was lowest since 1/31/14!!! First RES is again at the 50 day $1304, then the 50 day at $1309, leaving the 200 day as sole support at $1286. Note the recent high of $1392.60 on 3/17, highest high since 9/4/13…that too ended the session with a negative key reversal sparking the downturn! Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Overnight it is slightly higher at $1297.70 +$1.00 BUT only after putting in a new low of $1292.40, still lowest since 8/6.

Crude closed sharply lower with a new recent low of $94.27!!! This is lowest since 1/21/14! It closed at $94.48 -$1.93! It has now had TWELVE handles since 6/30! 7/22’s high was $105.20, still highest since 7/2. 7/15’s session low was $90.01 – lowest since 3/21. 6/20’s run to $107.73 was highest since 9/19/13 (a huge down session which put it in freefall. 3/2’s session low was $97.37, lowest since 2/4! 1/14’s low was worst since 5/2/13: $91.24! The record high of $114.83 was on 5/2/11, the low since on 10/4/11 is $74.95: $93.60 is the midpoint!!! Recent rally high and close are $110.70 and $110.53 respectively. RES at the 200 day ($99.77), then the 40 day ($101.12), then the 50 day ($102.12)…the latter two remain in freefall! The range is $85.61-$112.24 since March 1, 2012. Overnight it is modestly higher at $95.70 +$1.22.

European equity markets weaker following three days of rally…Asia slightly better: UK -0.5% vs +0.5% vs +0.7% vs +0.8% vs +0.5%; France -0.8% vs +0.4% vs +0.5% vs +1.2% vs +1%; Germany -0.07% vs +0.9% vs +1.5%! vs +0.9% vs +0.3%; Japan – vs +0.8% vs flat for 2 days vs +0.7%; Hang Seng +0.2% vs +0.7% vs – vs +0.6% vs -0.4%; Korea +0.1% vs +0.9% vs -0.5% vs closed vs –; India -0.4% vs +0.1% vs +1.1% vs closed vs +0.7%. U.S. equity futures slightly higher after being weak early in the session. Market as of 10:15am EDT: Dow +2.80; S&P -0.60; NDQ -6…Dow Transports UP 18!

Some random thoughts:

…back late from Rotary…so will just say…

Have a great day!

TB

Leave a Comment

Older Posts »
Follow

Get every new post delivered to your Inbox.

Join 91 other followers