Bloomberg Quote of the Day: “I’m a great believer in luck, and I find the harder I work the more I have of it.” – Thomas Jefferson. Also, Jefferson, Lincoln, and Roosevelt were frequently accused of abusing their positions…it was due to Jefferson, under Chief Justice Marshall, that the Supreme Court began judicial review (don’t confuse with law reveiew). Just a thoughtful comment. TB
TB’s Song of the Day;
“When I’m watchin’ my T.V.
And that man comes on to tell me
How white my shirts can be
But he can’t be a man ’cause he doesn’t smoke
The same cigarettes as me
I can’t get no, oh no, no, no
Hey hey hey, that’s what I say
-Rolling Stones, Satisfaction”
This is how TB feels when he sees all those SuperPac’s like ‘Red, White, and Blue Fund,” “Restore our future”, Compare and contrast to Stephen Colbert’s “Americans for a better tomorrow, tomorrow”
This week’s economic calendar contains some very important indicators. The highlights of the week will be the March ISM Manufacturing Survey (Monday) and the March Employment Situation Report (Friday). We will also get February Construction Spending (Monday), February Factory Orders and March Vehicle Sales (Tuesday), the March ADP National Employment Report and the March ISM Non-Manufacturing Survey (Wednesday), and February Consumer Credit (Friday). In addition, the Federal Reserve will release the minutes to the March 13th FOMC meeting (Tuesday). Courtesy of Steve Wood, Insight Economics, Walnut Creek, CA
Bloomberg Top Stories:
*Stocks in U.S. Decline Before Release of Report on U.S. Manufacturing – let the Qtr begin!
*S&P 500 Beating gold Most Since 1999 as Analysts Turn Positive on Earnings – AAPL is in S&P 500, a market cap weighted index – weighting undisclosed…see below…TB)
*Euro-Region Unemployment Surges to 14-Year High; Nears Record – global recovery?
*European Stocks Fluctuate Amid Debt Concerns; Shares Fall – déjà vu all over again…
— you get the picture…
Volume after being steady at 3.8B shares on NYSE listed stocks, dipped to 3.6B. BUT, NYSE stocks executed on the Big Board surged to 966M from 817M shares, about at the falling 12 month average (975M), and highest since 3/16’s high for the year. The bad news is stocks were WEAK! Since 2/29 there has only been just 2 ‘average’ days. 3/16’s high for 2012, and the average has been just 817M shares – and falling! Since 11/1 there have been just eight 1B share days…only three in 2012! Since 2/6 there have been FIVE sessions less than 700M shares. 93 of the last 102 sessions have now been less than the 12 month average! Advance/Declines were mixed after three negative sessions: +1.4x vs -1.5x vs -1.8x vs -1.4x vs +3x on NYSE and -1.2x vs -1.4x vs -1.9x vs -1.6x vs +3.2x vs +2.3x on Nasdaq. Breadth was slightly positive: +2x vs -1.6x vs -2.4x vs -2.2x vs +5.6x! on NYSE and +1.4x vs -1.4x vs -2.2x vs -1.1x vs +4.2x on Nasdaq. New 52 week highs doubled but from a low 115 to 221, high was 420 on 3/26, while new lows imploded to 28 vs 64 – not unusual for a quarteend as selling is usually fini. The ratio is strady at +2x from a high of +29x! The S&P VIX was steady for a FOURTH session – rare – at 15.50 vs 15.48 vs 15.47 vs 15.59, while intraday Wednesday hit 17.27, highest since March 9! Friday 3/16’s intraday low of 13.66 was lowest since 6/20/07’s 12.75. Seat belts on!.
Here are the results of the last five sessions: Dow -0.1% vs +0.2% vs -0.5% vs -0.3% vs +1.2%; Transports +0.6% vs flat vs -0.3% vs -0.2% vs +1.4%; Dow Utilities +0.4% vs +0.4% vs -0.9%??? vs +0.5% vs +0.7%; S&P 500 UP 0.4%??? vs -0.1% vs -0.2% vs -0.5% vs +0.5%; Nasdaq Composite -0.1% vs-0.3% vs -0.5% vs -0.1% vs +1.8%; Nasdaq 100 -0.3% vs -0.3% vs -0.5% vs +0.2% vs +1.8%; Russell 2000 -0.2% vs -0.3% vs -0.7% vs -0.7% vs +1.9%; NYSE Financials +0.3%!?! vs -1.0%!!! vs -0.2% vs -0.8% vs +1.4%. NYSE Financial Leaders: BAC +0.4% vs -2.3%!!! vs +1% vs -3.3%! vs +0.8% vs +2.5%! vs -2.2%!; GE +0.6% vs -0.3% vs -0.2% vs -0.1% vs +1.4%; F +0.2% vs +1.5%.
European equity markets weak, Asia better: FTSE +0.2% vs +0.6% vs -0.9% vs -0.3% vs -0.1%; CAC40 -0.3% vs +1.2% vs -0.9% vs -0.3% vs -0.3%; DAX flat vs +0.9% vs -1.2%! vs -0.5% vs +0.5%; Nikkei +0.3% vs -0.3% vs -0.7% vs -0.7% vs +2.4%!!!; Hang Seng -0.2% vs -0.3% vs -1.3%! vs -0.8% vs +1.8%! vs flat; Korean KOSPI +0.8% vs flat vs -0.9% vs -0.4% vs +1%; Indian Sensex +0.4% vs +2%!!! vs -0.4% vs -0.8% vs +1.2% vs -1.8%!!! vs +1% vs -2.3%! U.S. stocks opening weak: DOW -35; SPX -1; NDQ -5.80. Bonds better: 10’s and 30‘s still well above 2% and 3% respectively: 10 yr 2.19% +3/16. RECORD low 9/23 of 1.6855%; 30 yr 3.32% +3/8; Long TIP 0.86% +3/4, it was 0.57% at high. The 5 yr TIP yields MINUS 1.28%; 10 yr -.17%. Bills 0.05% 1 month; 0.07% 3 months, 6 months 0.13%. Reverse Repo 0.25%. 3 mo. Libor 0.47%, and 0.73%, slipping.
Gold closed below $1700 for a 15th straight session, but while rallying, making the hit $107 since 2/28, closing $1671.90 +$17.00. 2/28’s $1792.70 intraday high was not seen since 11/16! It has been above $1600 since Jan. 31, and is now $1666.40 -$5.50. The record high is $1923.70, a buying climax on 9/6. Res is $1691, the 200 day and $1711, the 50/40 day m/a’s, crossing. Major support is $1652, the 1/25/13 low, now res! Crude rose after tanking for two days but remains below BOTH the 40 and 50 day m/a’s, which it took out in one session! Closed $103.02 +.24….zzzzz. Thursday’s session low of $102.13 was worst since 2/17/12! This is a breakout of the range of $105-110 which has held since 2/21!!! It is now $102.60 DOWN .42, with RESISTANCE still at the 50 day (103.49), the 40 day (104.69), and major support at $95.35, the 200 day…note OPEC production along with U.S. is soaring…what say you, Mitt? Major resistance at $110!
March ended Saturday and the headline in the Minneapolis Star Tribune read:
Stocks Hit Biggest Start in 14 Years (unusual that, the operative word being ‘hit’)
But the Quarter went out with a whimper and let’s not start extrapolating for the year, right? Anymore than we should for Apple or earlier Google.
As TB said on Friday: what does this say for April? April ’08, ’10, and ’11 as all either saw a top or began a selloff (’11 was the exception rallying until ‘sell in May and go away kicked in). Also, we have a problem since the Q1 ’09 selloff to the bear market lows, falls off three year returns which will distort performance positively. 2012 could be a much tougher year than ’11.
The only gainers Friday were Dow Utilities (+0.6%) and the S&P 500 (+0.4%) – most likely due to indexers balancing positions. NYSE Financials were also up: +0.3% vs -1.0%! vs -0.2%. The two Nasdaq indices AND the Russell 2000 were all off for a thirds straight session which bodes poorly for this week. AAPL which added +2.7 index points to the 100 Wednesday subtracted 8.9 points Friday and 6.6 points Thursday (looks like the Richter Scale), coming off a record high of $621.45 on Wednesday, while Google which provided subtracted 1.7 points Friday following 1.7, Thursday after adding 2.1 on Wednesday! 51 were up, 47 down again on Friday…go figure!
Here are the returns for the Quarter and 12 months (shown with dividends re-invested):
3/30/12 1st Qtr 12 Mos.
Dow +8.8% +9.9%
Dow Transports +5.0% +1.2%
Dow Utilities -0.2% +15.6%!
S&P 500 +12.6%!* +8.3%*
Nasdaq Comp +19.0%! +12.5%!
Nasdaq 100 +21.2%!* +19.2%!*
Russell 1000(LC) +12.9%* +7.9%*
Russell 2000(SC) +12.4% +0.2%!!!
NYSE Financials +18.8% -4.9%!!!
*AAPL is in these indices, weightings not disclosed. But look at these:
1st Qtr 12 Mos. AAPL Wt. ex-AAPL ex-AAPL
AAPL +48.0% +72.0%
S&P 500 (SPY)*+12.6%! +8.3% 4.38% +10.1% +5.4%
NYSE Inst. +12.6% +9.6% 7.14% +9.9% +4.8%
NYSE Comp +21.7% +22.5% 26.11%! +12.4% +4.7%
CBOE Tech +26.7% +18.9% 36.32%! +13.4% -7.3%!!!
BB Silicon Val +23.2% +22.9% 41.35%! +8.1% -9.7%!!!
Russell 1k Tech +12.9% +7.8% 21.54%! +9.4% -28.4%!!!
(To approximate, used weighting on S&P 500 ETF (SPY), 5.375%)
Anyone in favor of a one stock index?…one stock portfolio??? This also highlights the importance of cross-checking weightings in ETF portfolios so they do not become positively correlated. Some rally, eh what? Taking bets on Q2 at the window!
. . . – - - . . . (SOS) . . . – - - . . . (SOS) . . . – - - . . . (SOS) . . . – - - . . . (SOS)
…now just as the NCAA’s fun ‘March Madness’ ends, which takes away countless hours and productivity from business, in comes ‘April Madness’…sometimes referred to as the ‘April Game.’ From then on of course it is ‘presidential madness’ all the way to November. So we go from the good…to the bad…to the ugly!…and it will be ugly!
What has America become? A nation of sheep that hangs its hopes on winning $640 million, which will help solve the deficit problem by about $150 million, and let’s less than a dozen people dictate who the presidential nominee for the GOP be – all mega millionaires and billionaires? A nation that only listens to those who support their point of view be it liberal (radical) or conservative (reactionary). A nation that lets people like Bill Maher and Rush Limbaugh make derogatory comments about women? …or that lets men decide if women should have access to birth control or abortions…who thinks that Planned Parenthood is a travesty despite the fact that it has reduced dramatically the number of unwanted children (who this conception to birth group has no interest in once they are born!). Or are we a nation that places more ‘faith’ in blind faith than in proven science, especially when doing the later costs businesses money?
We are now, because of control by the wealthiest 1% or less, incapable for any form of sympathy for those who have lost their homes, jobs, or even their health. We have witnessed over the past three decades the greatest transfer of wealth in this nations (any nations?) history. Not only do we not have empathy, we condemn them as lazy and ungrateful. “You have to have skin in the game,” has become our mantra…unless of course you are a CEO who, like Ford’s Bill Mulally (a good CEO by the way). gets an 11% raise (to $29.5M – numero uno among car makers!) for a period in which shareholder value declined by 35% (for the last 12 months only 15% but that should be – and likely will be – consideration for this 2012 bonus…double counting?), or where despite six quarters of losses the CEO of BestBuy insists that ‘absolutely’ he is the one to see them through this crisis. It is time for America…no, American’s to ‘wake up and smell the Napalm’ that is cremating our way of life.
What is worse is the next time we look at the wealth gap it will have increased exponentially as a large number of those home lost in the crisis become rental property for the wealthiest Americans. America has survived for these 236 years because we created and maintained a strong middle class whose chief asset was the home. But without a large and quick increase in value (which is not going to happen), the middle-class will continue to be decimated and without it this country, as we know it will not and cannot survive…unless we grow our way out of it.
But how do we do that when businesses who have outsourced over these three decades and are now beginning to bring jobs back, do so with lower wages and fewer benefits, and we like the proverbial frog, don’t even know that our existence is being impaired?
When politicians who have no faith in our ability to grow our way out of the ‘debt crisis’ – one which they created through insane spending – especially the GOP during Bush II, see the only way out as slashing spending and benefits, yet continue to cut taxes of the wealthiest Americans which created the problem in the first place?
When Wall Street, who created the financial crisis, continues to thrive while Main Street struggles to exist (90%+ even according to Romney).
When crime becomes rampant as 18-24 year olds find it nearly impossible to find jobs and take to the streets…and the answer is a lessening of gun control laws. Sure sounds like Blade Runner to TB! That analogy was from Jacques Attali, the brilliant confidante to Mitterand, in Millenium, Winners and Losers in the Next World Order, in 1992! It is a fascinating history of all the world power spots since the Venetians, and what caused them to shift. A frequent cause was apathy when the powerful ignored their nobles oblige is happening here – today! No minority can rule a country, especially when you have a democracry (unless access to the polls is denied and rampant lies are spread). Will the next move be to pay them to vote for your candidate?
Thursday, TB mentioned Joe Kernan’s book, with his daughter. What struck TB was when he said he wrote the book because teachers are turning the minds of kids against capitalism at a vulnerable age “when they still believe in fairness.” Is that a sin?
Look what we have: PAC’s, then SuperPac’s (thank you Supreme Court), and Leadership PAC’s (where candidates can raise $15,000 per individual instead of $2,500 – leadership???), and nonconnected or ideological PAC’s (organizations the NRA, etc.). But the most insidious is the ‘mystery PAC.’ This is exemplified in Ohio where in a Democratic primary a truck driver who spent no money, provided no information and declined interviews with the media, defeated an able and qualified person thanks to robocalls the night before the election, falsely claimed he had the endorsement of a Democratic senator and President Obama. This has got to stop. Hopefully, they will find and prosecute this anonymous creep(s), overturn the results, and convict the individual or individuals involved…why does TB keep thinking Koch brothers? Think how little money this involved!
Foster Friess (not to be confused with Foster’s Freeze), the principal backer of Santorum through his SuperPac, introduced him at a rally in Chippewa Falls, WI. with this joke:
“A liberal, moderate, and a conservative walked into a bar…the bartender said, “what’ll you have, Mitt?
Well, having not won the Mega Millions, TB had to cancel the order for the private jet! Perhaps next time…or perhaps today’s title should have just been ‘…MADNESS!!!).
Have a great day!