1/26/12…as far as the eye can see

Bloomberg Top Stories: *U.S. Durable Orders Rose 3% in December vs consensus +2%; ex Transportation +2.1%…they call them ‘doubtful orders’ for a reason, not dependable.

*U.S. Weekly Jobless Claims rose 21k to 377k…seasonal adjustments are very volatile!

*Caterpillar Earnings, Forecast Beat Estimates on Increased Mining Demand

*AT&T Earnings Forecast Falls Shore as IPhone Demand Boosts Subsidy Costs

*Nokia Reports Smartphone Sales That Beat Analysts’ Estimates – off 8% Tuesday!

*Greek Debt Talks Resume in Athens as Policy Makers Squabble Over Haircut

*Bernanke Achieves Milestone in Fed Transparency Drive With Inflation Goal

*Palladium Shortage Looms as Russian Stockpile Sales Dwindle

*U.S. Short of Contract Goal for Disabled Vets as Wars End – very tragic

*Amazon Push Into Publishing Sets Off Brawl Casting Kirshbaum as Turncoat

*Subprime Debt Insured by FHA Climbs in Bet on housing Recovery – a bad bet to TB

*Obama Wins Second Term in Global Poll showing Investors Resisting Gingrich – duh!!!

*Romney Tax Break Rejected as Welfare for the Rich in Global Investor Poll

*Nigerian Police Arrest 160 Chad Nationals After Bombings That Killed 256

*Gingrich Company Helped Clients Attend Bill Signing of Favored Legislation

*Obama’s Forecast of 600,000 Fracking Jobs Includes Drillers and Realtors

*’Stop-Newt’ Republicans Confronting Party Base Unwilling to Take Orders

Volume soared to an above average 4.39B shares from 3.66B shares on a session that only got ‘legs’ following the FOMC statement…but absent retail participation…this was just positioning by speculators! All indices were up solidly. NYSE stocks executed on the Big Board however, only rose to 830M shares from 743M shares, from near the lowest since 1/9 and still about 200 million short of the twelve month average. 48 of the last 51 sessions have been less than 1B! Advance/Declines were positive: +3.3:1 vs +1.2:1 vs +1.4:1 vs +1.4:1 vs +1.9:1 on NYSE and +2:1 vs +1.5:1 vs -1.2:1 vs +1.5;1 vs +1.4:1 on Nasdaq. Breadth was similar: +3.4x vs +1.2x vs +1.4x vs +1.2x vs +2.2x vs on NYSE and +2.8x vs +1.2x vs -1.1x vs +1.4x vs +1.8x on Nasdaq. New 52 week highs rose to 276 from 161 while new lows were steady at 23. The ratio is about 13x positive! The S&P VIX decline modestly, despite the magnitude of the rally to 18.31 -.60. People still not willing to put their money where their mouth is except day and high frequency.

Here are the results of the past five sessions: Dow +0.6% vs -0.3% vs -0.1% vs +0.8% vs +0.4%; Transports +1.5%v vs -0.7% vs -0.8% vs -0.4% vs +1.6%; Dow Utilities +1.6% vs -0.8% vs +0.3% vs +0.3% vs -1%; S&P 500 +0.9% vs -0.1% vs +0.1% vs +0.1% vs +0.5%; Nasdaq Composite +1.1% vs +0.1% vs -0.1% vs -0.1% vs +0.7%; Nasdaq 100 +1.3% vs -0.1% vs flat vs -0.2% +0.7%; Russell 2000 +0.9% vs +0.7% vs -0.2% vs +0.3% vs +0.4%; NYSE Financials +0.5% vs -0.4% vs +0.6% vs +1% vs +1.7%, seems to have gotten ahead of itself? NYSE Leaders:  BAC +0.8 vs +0.6% vs +2.6% vs +1.6% vs +2.4% vs +4.9%; GLW -10.7%; XRX -9.9%; F +0.9% vs +1.3%; GE +1.5%. Note Corning and Xerox…trashed and normally not high volume stocks.

Global equity markets strong, except Japan, India closed: FTSE +1.2% vs -0.7% vs -0.8% vs -0.1% vs +0.6%; CAC 40 +1.2% vs -0.9% vs -1.1% vs -0.5% vs +1.7%; DZC +1.5%; Nikkei -0.4% vs +1.1% vs +0.2% vs -0.5% vs +1.5%; Hang Seng finally open +1.6%; Korean KOSPI +0.3% vs +0.1%; Indian Sensex closed vs +0.5% vs +1.5% vs +0.4% vs +0.6%. U.S. Futures up modestly: DOW +51; SPX +5; NDQ +5. Bonds continuing to rally, 30’s lagging: 10’s below 2%, 30’s still above 3%. 10 yr 1.96% +3/8. RECORD low 9/23 of 1.6855%; 30 yr 3.11% +11/16; Long TIP 0.69% vs 0.79% +1-11/16; 0.57% at high. The 5 yr TIP yields MINUS 1.24% vs -1.05%!!!; 10 yr -0.18%. 3 mo. Libor 0.55%, and 0.79%, steady. Bills 0.02% 1 month; 0.04% 3 months, 6 months 0.06%. Reverse Repo 0.16%, steady.

Gold opened weaker but roared after the FOMC statement and is well above the 200 day ($1645). It has been above $1600 for 11 straight sessions. It closed at $1703.00 +$36.60, with a high of $1716, highest since 12/8 and is now $1719.60 +$16.60. The record high is $1923.70, a buying climax on 9/6. Sup is $1668, the 50 day, further support $1653, the 40 day m/a. Res is now $1770, the 12/2 high! Crude was lower all morning but rallied modestly on the FOMC, closing at $99.40 +.45. It is now $100.70 +$1.29 SUP is again $100 and the 40 day (99.73), the 50 day (99.46), and $96.50, the 200 day.

…gosh the price of a rally is cheap these days…the Fed says the economy is going nowhere for at least the next two years and they run stocks…more accurately they got ‘legs.’  The Fed essentially said that inflation, and with it solid growth (needed to make a significant dent in unemployment), is way off…as far as the eye can see. In the past, whenever someone says this we find out they are very nearsighted or short-sighted…but it seems appropriate now. In fact, the Fed doesn’t see inflation above 2% or unemployment below 7% until 2014 and then only to 6.7% which is nothing to be proud of…especially if you are one of those unemployed…remember too that this is the headline number, meaning REAL unemployment would still remain at double digit levels!

Nevertheless, stocks rallied…with a big surge in volume but NOT on the NYSE which has had just 3 days with 1B plus share volume in the past 51 sessions…and yesterday was not exception! In fact December 16th was the last big volume day (1.79B) and only one above 1B shares. The market is being driven by algorithms and speculators not retail who is just along for the ride, and that can be very uncomfortable when you car is careering (not careening as usually misstated), around those sharp hairpin turns…screech!

But what is the Fed really saying? That there are serious significant problems with the economy, both domestic and global and even if we get our act together the rest of the world’s weakness will preclude growth from being strong. Therefore, Obama’s proposals for job creation make sense, but have scant chance of passage as the all-encompassing interest inside the Beltway is in getting re-elected. We might not recognize the next Congress but if Newt gets the nomination, Obama will surely remain in the Oval Office…so much for anyone but Obama…a pity! Doesn’t America…and Americans…deserve more…like a choice??? The GOP will rue that motto and we will all be worse off for it. Four more years? …then what???

Note also that not only did stocks rally yesterday, so did commodities…both gold and crude bouncing off from big overnight lows…bonds too rallied…the 30 year, target of operation twist, however did little, but the 10 year is back below 2%! So it was an UP day…across the board! Gold could easily hit $1800 here and if so make a run at the $1925 high from September 6th.

. . .   – – –  . . . note that the same old SOS applies…perhaps more so!

Mea culpa: yesterday, TB attributed the GOP rebuttal, Mitch McConnell when he meant to say Mitch Daniels, the Indiana governor…one reader reported it so either the rest of you missed it, ignored it, or TB is sorely lacking in readers.

So much for the most ‘divisive’ campaign ever being heralded for Obama…no, that title goes to the GOP and its beloved SuperPACs. Of course the Dems have them too but not with the amount of lies and rhetoric that the GOP has shown thus far. Also, like in South Carolina, Florida airtime…all that is available has been bought by Gingrich’s SuperPAC. And its prime benefactor, Sheldon Adelson and his Israeli-born wife, claims he wants nothing for it, but the main reason he is backing Gingrich is his support of Israel and loathing of Palestinians…he even called them a bunch of nomads that were ‘created.’ But wait…wasn’t Israel created too? Yes, by Europeans and the UN, and anti-semitism was rampant there even after Hitler’s demise. We might not have the mess we are in if the Israeli government hadn’t supported the squatters who under false pretenses rented from Palestinians then refused to leave. TB supports Israel but the government there has not acted responsibly allowing the rift to widen. Consider that Tom Friedman, who is Jewish, wrote of this problem in From Beirut to Jerusalem which was published just before the first Gulf War began! Too bad we didn’t heed his warnings, after all he was objective.

Bloomberg has been conducting a series of global investor polls which are overwhelmingly supportive of Obama and critical of the GOP, especially Gingrich. So before one says ‘anyone but Obama,’ think twice. Just a suggestion.

Have a great day.




  1. Yarnman said

    TB–After listening to Mitch Daniels rebut the SOTU speech, I can now understand better why he decided not to throw his hat into the presidential ring of GOP aspirants. I disagreed with several of his points, especialy the size of the debt and the failure of the Obama stimulus spending. Nevertheless, he struck me as an intelligent thinker and observer of the national scene, both political and economic. But, he has no place in today’s Republican Party, which must hurt him the most that moderate thinkers “need not apply”. Imagine Daniels as the Speaker of the House–civil and persuasive. –Yarnman (PS I ignored your “McConnell” faux pas. I’ve followed you long enough to read your mind sometimes!)

    • traderbill said

      I also disagreed strongly with some of the rhetoric from Daniels but he would have been good as either Speaker or as a candidate for President. The moderate side of the GOP has become the left, the liberal side…if there is one…socialists. Nothing can be accomplished in this environment when we need it most.
      Sorry for delay…just saw this message.

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