4/23/12…potpourri

TB’s Quote of the Day: “Be careful what you believe about yourself, you’re never as good as they say or as bad as they say.” Brian Dunn, deposed CEO of BestBuy…he had it half right! TB

The highlight of this week’s economic calendar will be the advance estimate of Q1 GDP (Friday). We will also get the February Case-Shiller Home Price Index, March New Home Sales and April Consumer Confidence (Tuesday), March Durable Goods Orders (Wednesday), March Pending Home Sales (Thursday), and the Q1 Employment Cost Index and final April Consumer Sentiment (Friday). Perhaps of more interest will be the 2-day FOMC Meeting (Tuesday – Wednesday) following by the release of the Committee’s central tendency forecasts and Chairman Bernanke’s press conference. Courtesy of Steve Wood, Insight Economics, Walnut Creek, CA.

 

Bloomberg Top Stories:

 

*Stocks Retreat as Shrinking Manufacturing Weight on Metals; Euro Weakens

*U.S Index Futures Extend Decline on Factory Weakness From China to Europe

*Bulls Converge With Bears Seeing Dollar Strength as Rest of Europe Weakens

*Europe Services, Manufacturing Index Shrinks More Than Expected

*Wal-Mart Mexico Bribery Probe Exposes Retailer to Departures – a good family business, no?

*Hedge Funds Paring Bullish Commodities Wagers by Most in Four Months – read and heed!

*Kellogg Cuts Full-Year Profit Outlook After First-Quarter Sales Drop 1.3%  – look out!

*Sarkozy Vies With Hollande to Woo an Electorate Split by Immigration, Euro – can happen here

*Iran Cyber Attack Targets Internet Access at Oil Ministry, State Companies – Worm Israel/CIA?

After two days above Dow 13k, then one below it closed at 13029 on Friday. Don’t bet on that holding! Options expiry muddled things but we are most likely going down! At Friday’s close, RESISTANCE remains above at 13040 (40 day m/a), while minor support lies at 13012 (50 day) followed by the psychological 13k, then 12715, the 4/11/12 low! It was a an up day of sorts for all but the two Nasdaq indices. What did volume do? It dropped to 3.82B from 4.17B natch…remember? Down days big, up days little. NYSE stocks executed on the Big Board however were the opposite, RISING to 959M from 827M, both were the highest since 4/10/12. This is also the first ABOVE average volume day since April 10! 8 of the last 11 sessions have been less than 800M shares! Since 2/29 there have now been just FOUR ‘average’ days, including 3/16’s high for 2012, and the average has fallen to 803M shares. 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. 104 of the last 116 sessions have been less than the 12 month average! Advance/Declines were slightly positive: +2x vs -1.4x vs  -2.1x vs +3.4x vs +1.3x on NYSE and +1.5x vs -1.7x vs -2.3x vs +3.2x vs +1.1xon Nasdaq. But breadth was mixed: +1.1x vs -2x vs -2.4x vs +7.3x! vs +1.2x on NYSE and -1.2x vs -1.6x vs -2.3x vs +5x! vs -1.4x on Nasdaq – no conviction! New 52 week highs rose again to 198 vs 147 (high was 420 on 3/26), while new lows fell to 78 vs 104. Ratio is about 2.5x positive again vs +1.5x vs 1:1 vs +3.5x vs 1:1. The S&P VIX DECLINED, to 17.44 -.92, and has been in a range of 17.70-16.02 since April 11. Not much meaning in this as it is a new cycle.

Here are the results of the last five sessions: Dow +0.5x vs -0.5% vs -0.6% vs +1.5% vs +0.6%; Transports +0.1% vs -1.4%! vs -0.1% vs +1.4% vs +0.9%; Dow Utilities UP .9%! vs -0.3% vs -0.2% vs +0.6% vs +0.6%; S&P 500 +0.1% vs -0.6% vs -0.4% vs +1.6% vs -0.1% vs -1.3%; Nasdaq Composite DOWN 0.2% vs -0.8% vs -0.3% +1.8% vs -0.8%; Nasdaq 100 DOWN 0.4% vs -1.1%!!! vs -0.3% vs +2% vs -1.1%; Russell 2000 UP 0.6%? vs -0.6% vs -0.9%! vs +1.6% vs +0.2%; NYSE Financials FLAT vs -0.4% vs -0.8%! vs +1.6% vs +0.6%. NYSE Financial Leaders: BAC -4.7%! vs -1.7% vs flat vs +1.5% vs +1.3% vs -5.3%!!! vs +3.4% vs +3.8% vs -4.4% vs -3.3%, GE +1.2% vs -3.6%! F -21%.Citi, while not a  leader  was off 2.8% vs 0.7% vs flat vs +3.2% vs +1.8% vs -3.5% and since peaking at $38.40 on 3/19, it is now off 11.7%!!!

Global equities WEAKER:  FTSE -1.7%! vs +0.2% vs -0.4% vs -0.4% vs +0.8%; CAC40 -2.3%! vs +0.3% vs -0.7% vs -1.6% vs +1.4%; DAX -2.8%!! vs +0.8% vs -0.1% vs -0.9% vs +1.2%; Nikkei -0.2% vs -0.3% vs -0.8% vs +2.1%! vs -0.1%; Hang Seng -1.8%! vs +0.1% vs +1% vs +1.1% vs -0.2%; Korean KOSPI -0.1% vs -1.3%! vs -0.2% vs +1% vs -0.4%; Indian Sensex -1.6%! -0.7% vs +0.6% vs +0.2% vs +1.2%. U.S. stock futures TANKING! DOW -127!!!; SPX -14.40!; NDQ -25.50! Bonds still rallying! 10’s well thru 2% and 30’s closing in on 3%.10 yr 1.92% +3/8, RECORD low 9/23 of 1.6855%; 30 yr 3.07% +1 point!; Long TIP 0.69% +13/16. It was 0.57% at high. The 5 yr TIP yields MINUS 1.16% vs -1.28%?; 10 yr -.32%. Bills 0.03% 1 month; 0.07%; 3 months; 0.12% 6 mos.. Reverse Repo 0.14% vs 0.17 – down from 0.25%! 3 mo. Libor 0.47%, and 0.73%; steady. European problem sovereign 10 years, Germany-benchmark: 1.65% -5 bp’s; Italy 5.69% +6; Spain 5.94% +3; Greece 20.68% +21; Portugal 10.94% -21; Ireland 6.59% -1.

Gold closed below $1700 for a 28th straight session, +$1.40, making the hit $150 since 2/28, closing $1642.80 +$1.40. 2/28’s $1792.70 intraday high was not seen since 11/16! It has been above $1600 since Jan. 31, which remains below major support!!! The record high is $1923.70, a buying climax on 9/6. Res is $1678, the 40 day and $1691, the 50 day, then $1700, the 200 day. It is now $1631.30 -$11.60. Crude closed a bit higher at $103.05 +.78. Tuesday’s low of $100.68 was worst since 2/15/12! It remains below the range of $105-110 which held from to 3/28!!! RES still at the 50 day (104.75), the 40 day (105.26), and major support at $95.99, the 200 day, all but 40 day still rising. Weaker o/n,  $103.06 -.82. $101.08, the April 4 low is still minor support – Last 4/10’s low $100.68!!! – lowest since 2/15/12!.

A very strange session with modest gains in Dow AND Russell 2000 small cap, but S&P 500 essentially flat and both Nasdaq indexes weaker again thanks to APPL which lost another 13 index points following a 17 point loss while MSFT gained 11 – NO other movers, 39 up, 57 down!. Apple closed -14 following a 20 point loss to $572.98, taking out the 40 day m/a (585) with MAJOR support at the 50 day (569). While the Dow closed above 13k (13029) the range was 12964-13082 and it is again vulnerable, especially with global markets very weak overnight and U.S. stock futures being trampled. Sure looks like ‘sell in May and go away’ is the right prescription.

Don’t stand in front of a moving train…or a below a piano falling from a building!…you decide!

. . .   – – –  . . .  (SOS)   . . .   – – –  . . .  (SOS)   . . .   – – –  . . .  (SOS)   . . .   – – –  . . .  (SOS)

…remember Rowan & Martin’s Laugh-In? That was TB’s favorite part of the show.

So today, TB has several topics to throw out to you.

First, Best Buy again, the Minneapolis Star-Tribune had a front page story on deposed CEO Brian Dunn. He was an aggressive salesman who was selected to be CEO and failed to see a change in demand back as far as 1997 – the clues were there, starting with TV’s. Perhaps he was too busy with his company-financed affair to notice? Ask Mark Hurd.

As for the founder/Chairman, Richard Schulze, as the largest shareholder (21%, more than the next five institutions combined), he used it as his personal money maker with nepotism, contracts with companies he owns, and TB hears rumors that there were bribes funneled from vendors to key employees…why not? If the boss is doing it, so can you. Oh, and don’t feel badly for him…he may get a golden parachute of $3.5 million. Just this month he was given a 10% pay raise despite the collapse of stock price “in recognition of his maturity in the chief executive role.” On the earnings announcement he said that no one was better suited to run the company. God forbid!

Then there is the long-blasted FDA who has released a list of devices and some makers, largely U.S. (!) who created products that did not work and while the EU passed on them, the FDA did not. Is this like banks, who we are told are capitalists and thus would do the right thing? Yes, if the right thing is to make money. We only have to look to Glaxo Smith-Kline who was mislabeling drugs and even though aware of the problems failed to take action…until a whistleblower did! Or the latest, J&J who promoted an anti-psychotic drug to doctors overstating the virtues. See free-market capitalism doesn’t always work…except with governmental supervision.

Securities regulation, good and bad:

First the good: a hedge fund tied to Madoff is being forced to pay millions…about time!

Now the bad: 3-1/2 years after the meltdown, no action has been taken against a single Lehman insider…including Dick Fuld who lied about capital and liquidity all the way down. If this wasn’t a reason to Sarbanes-Oxley nothing is. Does Fuld know something? Why haven’t they moved forward on this. Especially when Henry Paulson’s brother was an officer in the company and lost everything. Makes you shake your head. Thanks to 60 Minutes for dusting off this sick story. If you haven’t figured out yet that our government is bought and paid for by Wall Street, you are a true believer in the sanctity of free market capitalism. It is a myth…greed supercedes all! You also don’t understand that markets are built on faith. An ISI report noted that individual investors are fleeing stocks and won’t likely return for years.

Shifting to gun control, just six days after Trayvon Martin was fatally shot in Florida, a 17-year old was killed in Wisconsin. The youth had been drinking and was on probation so he tried to hide on a neighbors screened porch. While he made no attempt to enter the premises, the owner investigated the noise and as the youth stood and held up a hand, shot him. So was Wisconsin concerned? No, in fact the legislature and governor sought more protections against prosecution, pressed by the NRA and other conservative groups. All because he thought he was in danger. While there was moderate probable cause, he didn’t attempt to challenge or warn the teen…shot first and didn’t bother to ask questions later. We have become a sick nation, obsessed with our own safety even though probability shows it is not at significant risk. TB warned of this in his comments about a neighbors son going into your garage to look at a new motorcycle etc…how would you feel if you shot him? Apparently, not that badly.

Wake up to reality…is this like there being a communist lurking behind every telephone pole as TB grew up to and Rep. Allen Lewis (R-Florida) insists are still out there, in fact at least 75 are democrats in Congress! Now West, a former Army Lt. Colonel says war is hell in defending the actions of troops in Afghanistan. Apparently, he didn’t read Flyboys, written by the son of a WWII hero at Okinawa, who showed the atrocities of both sides and how war reduces men to the least common denominator.

Now the Secret Service scandal. Someone close to the agency for years was not surprised saying their motto was ‘wheels up, rings off.’ Nice, that. Now think about the latest incident: there were 21 opportunities for just one of those women to obtain a gun, possibly a communications device, identification, etc. Not to mention potential blackmail.

Add to this a factoid TB picked up from someone who interfaced with the agency that when Obama was elected some members did not want to be on his protection team. That is unheard of. TB wonders if there is now a ‘hit’ out on the agent who was so stupid as to get in an argument with a hooker over money, blowing the whole event open. Whatever happened to men like Clint Hill, who moaned the fact that he should have taken JFK’s bullet if he had done his job properly? Not your fault, Clint…not your fault!

Computer virus: The FBI has caught a group of internet pirates who by getting you to go to a site, hijacked your router. It appears normal but after June 9, they will no longer be able to protect you and when you try to go to a site you will receive ‘page not fount.’ This is because they captured a group of Estonians who made millions by then sending ads to your computer if infected. There are 568,000 affected, 85,000 in the U.S. So it is unlikely you are impacted but if you go to www.dcwg.org it will direct you to a site that checks it instantly and if you are one of the unlucky ones another that will clean it from your computer. This has been confirmed, not an internet ruse.

Have a great week!

TB

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: