6/1/11…window dressing?

Bloomberg Top Stories:

*U.S. Companies Added Fewer Than Estimated 38,000 Workers in May, ADP Says

*Stocks, U.S. Index Futures Decline After ADP Jobs Report; Treasuries Rally

*Manufacturing Growth Weakens from China to Europe as Global Economy Ebbs?

*Treasury 10-Year Yields Fall Below 3% for First Time in 2011 on Jobs Data

*Nokia’s Stock Drop Quickens Under Elop as Consumers Shun Outmoded Phones!

*Oil Supply Falls in Survey on Surge in U.S. Refiner Demand – what a joke?

*Debt Limit Debate No Bar to Best Bond Market Since August – what inflation?

*Chevy Offsets Corvette Carbon With inflated Green Claim on Housing Project

*Debt-Ceiling Measure Defeated in U.S. House Vote Democrats Call ‘Charade’

*Former Egyptian Bank Chmn Arraigned on Charges of Assaulting Main in U.S.

*Lobbyists Cling to Obama Defense Budget as Republicans Seek Deeper Cuts

Tuesday’s volume was weird: 10 minutes before the close it stood at a WEAK 680 million shares, at the close 822 million but orders on close broght it to 1.51B shares, well above average and highest since March 18th. Thus a BIG caution flag on an otherwise positive day! e a typical pre-holiday 670 million shares in a meaningless, slightly up session, led by the Russell 2000 +0.7%. New highs soared to 382 from 211, while new lows which were only up slightly to 64 from 46 (never short a thin market)! BofA, the new Citi, contributed 106M shares producing a 0.5% gain (on an $11 stock though), and is now off 1.3% last 11 sessions. But the big stock and a huge loser was Nokia -14.4% on 159 million shares. Take out those two stocks and the orders on close from hedge funds rebalancing and you have an ultra boring day. Advance/Declines were about 3:1 positive while Breadth was +3x on NYSE and 2x on Nasdaq. The Dow added nearly 50 points or 40% of the day’s gain in the final 20 minutes…smells awfully fishy! Here are the indices: Dow +1%; Transports +1.1%; S&P 500 +1.1%; Nasdaq Comp +1.4%%; 100 +1.6%; Russell 2000 +1.4%.   

The Dollar continues to trade below 75, is below both the 40/50 day m/a’s, and is now 74.50 -.04. Bonds are STRONG: 30 yr 4.18% +25/32; 10 yr 3.00% +1/2!!! T-bills which traded at ZERO for ten straight sessions declined to 0.03% from 0.05%. Gold is now $1537.40 +.60. Support is $1462.50 hit a week ago Thursday, just below the 40 day m/a! Crude, which had been weak ever since setting that rally high of $114.14, on 5/2, is now $102.27 -.43 with par as major support.

Global equity markets weaker, except Japan and India FTSE -0.4% vs +0.9% vs +0.8% vs +0.4% vs -0.4% vs +0.6% vs -1.7%; CAC 40 -0.3% vs +1.5% vs +1.1% vs FLAT vs -0.4% vs +0.4% vs -2%; DAX -0.4% vs +2% vs +0.4% vs -0.4% vs-0.3% vs +0.9% vs -2%; Nikkei +0.3% vs +2% vs -0.4% vs +1.5%!!! vs -0.6% vs +0.2% vs -1.5%; Hang Seng -0.2% vs +2.2% vs +1% vs +0.7% vs +0.1% vs +0.1% vs -2.1%; Korean Kospi -0.1% vs +2.4% vs +0.4% vs +2.8%!!! vs -1.3% vs +0.3% vs -2.6% vs +0.8% vs -1.9% vs +1.6% vs -0.1% vs -0.8% vs -0.1% vs -2%!!!; Indian Sensex +0.6%+1.5% vs +1.2% vs +1.1% vs -0.9% vs +0.1% vs -1.8% vs +1% vs +0.3% vs -0.3% vs -1.1% vs -1% vs +1.1% vs -1.3%. U.S. Futures givng up half of yesterday’s late gains: Dow -50 vs +99; SPX -5.10 vs +11.30; NDQ -8.25 vs +22.25.

…if you believed in yesterday’s rally you get an ‘F’ in your understanding of markets! Gains were about 0.5% most of the day then surged on the close which produced nearly 50% of the day’s volume and was obviously mutual funds rebalancing for monthend. Furthermore, what good news was there out there to precipitate such a rally? Certainly not Nokia which plunged 14% on unplanned obsolescence.

Then we got the ADP report today and while notoriously varying greatly from the Labor numbers produced just 38,000 private sector jobs. Isn’t jobs what it is all about? Not to the GOP which produced a sham debt ceiling bill which was dead on arrival and slaughtered accordingly.

TB doesn’t have the time to waste commenting further on this B.S.

. . .  – – –  . . .    . . .  – – –  . . .

There will be no more commentaries until next Tuesday as TB is off to Oregon to see his nephew perform a solo recital at University of Oregon where he is a graduating music major.

Have a wonderful week and beware of Friday’s payrolls report.

TB

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