12/24/13…all I want for Christmas is a lump of coal!

Joke of the Day from the Friar’s Club Encyclopedia of Jokes: The Supreme Court ruled against having a Nativity scene in Washington, D.C. This wasn’t for religious reasons. They couldn’t find three wise men and a virgin.” – Jay Leno

Bloomberg Quote of the Day: “Hide not your talents. They for use were made. What’s a sundial in the shade.” – Benjamin Franklin…can anyone tell me what time it is?

Bloomberg Top Stories:

*Weinstein’s Wrongway European Bet Said to Spur Second Losing Year for Saba

*Stocks in Europe Advance for Fifth Day as Copper Gains, Dollar Strengthens

*Fidelity to Amudi Seek Euro Shelter as Fed Taper Deepens Treasury Loss

*KKR Raises $1.5 Billion Fund for Real Estate in North America and Europe

*Valuations at Extremes Make Winners of Losing Trades this Year on Fed Cash – !?!

*JPMorgan Boosts Bonuses for Bankers as Morgan Stanley Adds Cash, WSJ Says

*Time Warner Cable Deal Seen Unlikely to Face Limited Regulatory Barriers

*Europe Profits to Rise, Narrowing Record Gap With U.S.: can that be good for us?

*China Central Bank Opacity Leaves Markets Guessing as Cash Crunch Returns

*Khordorkovsky Signals Putin Rift With Russian Oil Czar Sechin Over Pardon

*Car Bomb Kills at Least 13 in Egypt City as Police Headquarters Targeted

*Budget Resolves Some U.S. Fiscal Woes With Spending Wrangle Set for 2014

*U.K. Christmas Exodus Hampered as Storms Close Railways, Ferries, Airports

Monday’s Market Summary:

The Dow eked out yeat another new record high of 16318 yesterday breaking Friday’s 16287 which in turn replaced 11/29’s (monthend) record, of 16174.51. Futhermore, it held most of the gains closing at 16294 +73, for a 0.5% gain. Volume? Thought you’d never asked it plunged again to a well below average 2.83B shares from 4.97B on the expiry Friday, while REAL Volume plkunged to 611M shares (lowest since 11/27 – day before Thanksgiving) vs 1.97B shares – highest since 9/20’s huge 2.06B shares, also an expiry. Honors went to the two Nasdaq indices, +1.1%, followed by the Russell 2000, +0.9%. The goat once again was Dow Utilities -0.3% and the only loser.

Advance/Declines and Breadth were both positive for a second day, while the VIX fell to 13.04, lowest since 11/27 – hey, wasn’t that the shortened day before Thanksgiving???

The Nasdaq 100 gained 38 points vs +32.5 vs -11 vs +40 vs -6.5 vs -19. Nearly half those points came from APPL, which didn’t aid the S&P 500 as much since it only rose 0.5%, same as the Dow. Breadth was positive again at +4:1 vs +4:1 vs +3:1 vs -2:1 vs +8:1. Five members gained more than an index point, led by Apple, while only MSFT lost a point: APPL +3.4 vs -3.4 vs -2 vs +2.5 vs -4.9; FB +4.4; GOOG +3.6 vs +3.5; CSCO +2.1; INTC +1.1; MSFT -1.1 vs +3.8 vs -2.4.

Not going to comment further as we are in the weird final two weeks of the year.

Dow 30 +0.5% vs +0.3% vs +0.1% vs +1.8%!!! vs -0.1%; Dow Transports +0.4% vs +1.1% vs flat vs +1.2% vs-0.4%; Russell 2000 +0.9% vs +0.9% vs -0.7% vs +1.3% vs -0.1%; Dow Utilities -0.3% vs +1% vs -0.7% vs +1.2% vs +0.1%; S&P 500 +0.5% vs +0.5% vs -0.1% vs +1.7% vs -0.3%; Nasdaq Composite +1.1% vs +1.2% vs -0.3% vs +1.2% vs -0.1%; NDQ 100 +1.1% vs +0.9% vs -0.3% vs +1.1% vs +0.7%.

*NYSE Volume plunged from a tied record high (typical of options expiry), to a sub-average 2.83B shares vs 4.97B vs 3.49B vs 4.29B vs 3.25B vs 3.16B. The record high (?) is 4.97B shares on Q3 end of quarter while 11/29’s 1.59B is weakest of 2013). REAL NYSE Volume also plunged to 611M shares vs 1.97B – highest since 9/20’s huge 2.06B shares vs 701M vs 828M vs 668M. The 12-month average is 722M shares. This year there have been just TEN 1B+ share sessions! There have been 39 800M+ shares in 2013: 18 up, 19 down, three mixed.

*New 52 week highs have ranged from 33-864. They rose again to a high 698 vs 550 vs 304 vs 334 vs 164 vs 223 vs 83! Recent high is a super-strong 890!!! New lows were lower again at a weak 68 vs 81 vs 127 vs 131 vs 135 vs 133 vs 353. Recent low is 35!  

  1. Advance/Declines were positive: +2.4x vs +3.1x vs -1.4x vs +3.6x! vs -1.1x (recent range -17.5x to +6x) on NYSE and +2.6x vs +2.6x vs -1.6x vs +2.5x vs -1.2x (recent -4x!!! to +3.8x). Breadth was similar: +2.9x vs +2.3x vs -1.14x vs +4x! vs -1.3x (recent -18.6x!!! to +7.2x!!!) on NYSE and +4.3x vs +4.6x vs -1.3x vs +3.1x vs .+1.1x (recent -12.8x to +6.5x).  
  2. NYSE Financials rose 0.7% vs +0.5% vs +0.2% vs +2.1%! vs -0.5%. BofA most active: +0.6% vs -1%! vs +0.4% vs +0.4% vs +0.1%, closing at $15.69 +.06. 11/25’s 12-month high was $15.98, highest since 6/1/10. Brokers +0.9% vs +1.8% vs -0.6% vs +1.8% vs -0.3%; KBW Banks +0.9% vs +0.5% vs +0.1% vs +2.1% vs -0.8% vs +0.7%; Nasdaq Banks +1.4%! vs +1.3% vs -0.7% vs +1.4% vs -0.7%.
  3. Volatility (S&P VIX) fell sharply closing at 13.04 -.75 High for last week was 16.67! It is back below the 40/50 day m/a’s: 13.65/13.76, while the 200 day is 14.38. The recent range is 11.83-21.01!!! It peaked at 22.79 on 12/28/12…ytd the range is 11.05 (3/14) to 21.92 (6/24)!

Bonds declined again and the 5-30 year continued to flatten! 30 yr closed at 3.85 -3/8 while the 10 yr closed at 2.93% -5/16. Long TIP closed 1.56% -5/16. Overnight they are weaker again: 10yr 2.94% -1/8 (recent range 1.63% to 2.99%), and the 30 yr 3.86% -1/4 (recent range 2.67% to 3.92%). The long TIP is 1.58% -5/16 The (record?) low of 0.36% was set on 4/5. NOTE recent high yield: 1.63%! Libor update: 0.247% 3 mos, 0.349% 6 mos. (both almost at record lows!). Foreign bond yields lower,  ex-UK: Germany 1.88% -1; UK 2.97% +1; France 2.48% -1; Italy 4.15% -2; Spain 4.19% -1; Portugal 5.95% -1; Greece 8.04% -16!!! vs -11 vs -3 vs -11! Recently: 7.71% – 12.57%. Japan 0.67% –.

Gold bored us with an ‘inside’ day and closed below $1200 at $1197.00 -13.70. Friday’s low was $1188…at least still above Thursday’s $1186 – LOWEST since 12/31/02. Recent high is $1375.40 on 9/19. Now $1200, added to $1300, is psychological resistance with major res at the 40 day ($1264!) and the 50 day ($1275!). The 200 day is a $1362. Overnight it is slightly above $1200 at $1200.70 +$3.80, with a session high of just $1201.80!

Crude also had a second straight ‘inside’ day and closed slightly weaker at $98.91 -.42. Last Wednesday’s low was $96.26, lowest since 12/3. On 11/27 it printed a new low of $91.77, lowest since 6/3!!! 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. It remains above the 40 day m/a ($95.69) and the 50 day (96.47), both major support! The 200 day is $98.85, and major sup/res! 4/18’s low of $85.61 was lowest since 12/11! The recent range is $85.61-$112.24 since March 1, 2012. Overnight it is lower at $99.15 +.24, range $98.53-99.21.

Overnight markets:

Global stocks higher as the love-fest continues, ex-India: UK +0.2% vs +0.5% vs +0.3% vs +0.8% vs +0.3%; France +0.1% vs – vs +0.1% vs +1% vs +0.7% vs -1%; Germany +0.9% vs +0.6% vs +0.5% vs +1.1% vs +1.1%; Japan +0.1% vs closed vs +0.1% vs +1.7% vs +2%!; Hang Seng +1.1%! vs +0.5% vs -0.3% vs -1.1%! vs +0.3%; Korea +0.2% vs +0.7% vs +0.4% vs +0.1% vs +0.5%; India -0.3% vs +0.1% vs +1.8% vs -0.7% vs +1.2% vs -0.2%. U.S. stock futures higher in a very tight range again: DOW +8 (range 21 points!); SPX — (4 points); NDQ +1 (5 points), lately, futures continue to be the tail of the dog…and they ain’t wagging it!!!

Some random thoughts:

What is Christmas without a few lumps of coal in the bag? Certainly, Congress and Obama reserve it…the first for doing nothing, the latter for obfuscation. But TB will leave that to his friend, Caroline Baum, whose Bloomberg post this morning is at the end of today’s column.

The Fed and outgoing Chairman Bernanke might be a choice of bondo’s for starting the taper based on such low economic growth and for citing the gains in employment while ignoring the fact that most jobs are part-time with no benefits or with wages that haven’t kept pace with inflation for three decades – while the labor participation rate is also at a three decade low. TB bets the reason is they had to begin the taper and this was the only opportunity they might find ‘cover’ in.

Certainly, Jamie Dimon and his board of directors deserves big lumps, but then so do most of the board’s of the big corporations for winking and nodding at their CEO’s. But TB is reserving his lumps for the worst-run company in America: Hewlett-Packard. This company has had a string of CEO’s that have failed shareholders: Carly Fiorina, who enriched herself on the Compaq acquisition, while alienating all the board members, and who spied on the board, Patty Dunn doesn’t count as she was interim; Mark Hurd, who improved employee morale and was turning the company around until he got into a sexual harassment scandal and resigned…only to be hired by Oracle’s CEO Larry Ellison, as Co-President and CEO, and who isn’t bothered by sexual harassment charges.

Then they brought in EBay’s Meg Whitman, fresh off losing a gubernatorial race in 2009, and who has presided over a stock decline since her arrival in 2010 from $54.95 to a low of $11.35, or 79% while the rest of the stock market was rising (it has since bounced to $28, so it isn’t so bad at just a 51% loss. Criticized for too much overhead, such as their 18 corporate jet fleet which is available to board members free of charge at their whim, she slashed expenses…now they have just 16 jets! So what did the board do? They granted her a raise from $1 million to $1.5 million! What, a 50% raise for that? No, not at all…to make her pay more ‘competitive.’ Since when is that the parameter that matters, what about stockholder value? Oh, and not that she needs it as she is worth an estimated $1.9 BILLION, and the fourth-wealthiest woman in America! Wish I could be treated as fairly! Do you get it? Investors are along for the ride…only the ride…aka: OPM – Other People’s Money! Anyone who doesn’t rate this company a sell should lose their CFA! In a world where analysts hate to give sells here is the score: Buy 9; Hold 23; Sell 3…at least there are three honest CFA’s out there, right?

Baum on Money: Economists Give Their Views on Scrooge and Giving

By Caroline Baum

     Dec. 24 (Bloomberg) -- 'Twas the night before Christmas,

and yours truly is still pecking away at her computer, choosing

interesting articles for you to read with your breakfast. Enjoy

your holiday, one and all.

There's still time to shop for Obamacare!

Shhh. Don't tell anyone, but the Obama administration has

done it again: made an executive decision to extend the filing

deadline for insurance coverage that begins Jan. 1. This time it

was done "quietly," according to the Washington Post, citing

"two individuals with knowledge of the switch." Which begs the

question: If it's so hush-hush, how will the stragglers know

it's still okay to sign up until 11:59 p.m. on Christmas Eve? At

this point, it's probably better to hope potential enrollees are

oblivious to the deadline than go public with another rule

change that screams, "botched roll-out."

Support for Obamacare drops to a new low

You had to pass it to find out what's in it, but you had to

wait until it was implemented to grasp the full effect. Support

for the Affordable Care Act fell to record low of 35 percent,

according to a CNN/ORC poll. That's down 5 points from November.

Women accounted for the entire decline. Some of the other poll

results were interesting: 63 percent think their health care

costs will rise under the ACA and 61 percent think they can keep

their doctor. When they find out they can't, guess what happens

to the approval rating?

Just when you thought things were starting to look up

     Along comes Jared Bernstein to bring us the bad news. Not

only is actual economic growth sluggish compared to recoveries

from previous recessions, but potential growth is being

constrained by structural forces. Since 2000, the Congressional

Budget Office has lowered its estimates of potential GDP by a

full percentage point: from 3.5 percent to 2.5 percent.

Bernstein's solution is more infrastructure spending, a demand-

side fix that will increase the economy's capacity for growth in

the future. Another solution would be to create incentives for

businesses to invest for the future, drawing more Americans back

into the labor force, and to make it easier for highly-skilled

foreigners to live and work in the U.S.

Keynesians wish every day were Christmas

The Financial Times' Alphaville presents a guide to the

economics of Christmas, courtesy of the folks at Lombard Street

Research. Christmas is great if you're a Keynesian, dangerous if

you're an Austrian, and meaningless if you're into rational

expectations (the gift-giving nets out). It's a fun romp through

the various economic schools of thought.

Of spending, saving and the virtues of thrift

Here's a classic that warrants revisiting this time of

year. It's economist Steven Landsburg's challenge to Dickens'

Ebenezer Scrooge. Believe it or not, saving is philanthropy.

A Merry Christmas/Happy Holidays to all of you and thanks for reading!

TB

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1 Comment »

  1. Yarnman said

    Happy Birthday, TB! And my very best wishes for a Prosperous New Year. Peace.–Yarnman

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