6/12/12…who do YOU trust?

From Keep Calm and Carry On: “You can make more friends in two months by becoming interested in other people than you can  in two years by trying to get people interested in you.” – Dale Carnegie

Bloomberg Top Stories:

*Stocks Fall on Growth Concerns as Euro Weakens to Two-Year Low, Bunds Gain

*Peugeot to Eliminate Further 8,000 Jobs to Stem Losses as Car Sales Drop

*P&G to Philip Morris Blaming Currency for Cuts as CEOs Caught Flat-Footed ( a warning to those who believe that companies had a strong quarter – the scapegoat!)

*Industrial Production in Euro-Area Nations Unexpectedly Rebounds – a month? Two?

*Buffet Says U.S. Economy Is Slowing Even as Housing Shows Signs of Rebound

*JPMorgan Is No. 1 Stock Picker as Investors Rate Research in 35 Industries (wonder if they picked their own stock? Not likely given its performance: +6.5% 6 mos, -9.5% 12m)

*Americans in Poll Say Obama’s Health-Care Overhaul Amounts to Tax Increase (this is the power of disinformation…as is saying cutting taxes on first $250k doesn’t help all!)

*British Troops Deployed for Olympics as Security Contractor Misses Target

*Obama-Romney Debate Over Offshoring Is Phony and Dangerous to Voters- both lie!   

Volume was steady at a still below average 3.4B shares vs 3.42M – NYSE stocks executed without the aid of the ETN market were still well below even a sub-average 800M shares at 768M vs 728M shares – on the FIFTH straight down day with no sign of life. This is the 7th straight session where volume was less than 800M shares barely beating the high last week of just 736M shares day and the average since 7/2 is just  661M shares, levels not seen since week ended 12/30/11! 41 of the last 68 sessions have been less than 800M shares. Since 2/29 there have been just 15 ‘average’ days (mostly down!), including 3/16’s high for 2012 of 1.65B (4.85B including ETNs) and just 14 have been above 900M – 942M is 12 month average. Since 11/1 there have been just 14, 1B share days…ten in 2012! Since 2/6 there have been TWELVE sessions less than 700M shares. 153 of the last 172 sessions have been less than the 12 mo average (89%)!

Advance/Declines were little changed after four negative days: +1.1x vs -2x vs -1.2x vs -2.1x vs -1.3x on NYSE and 1:1 vs -2x vs -1.4x vs -2.5x vs -1.2x on Nasdaq. Breadth was a tad worse: -1.1x vs -4.6x vs -2.2x vs -4.6x vs -2.7x vs on NYSE and -1.9x vs -3.7x vs -1.6x vs -3.9x vs -1.1x on Nasdaq.. New 52 week highs dropped by one-third to 203 vs 327 (7/3’s 504 is the high), while new lows dipped to 77 vs 85. The ratio is +3x vs +3.8x vs +5x vs +5.7x vs +14x vs +20x – note the steady decline from the high! The S&P VIX however fell to 17.95 -.77…reversing Tuesday’s rise.

Here are the results of last 5 sessions: Dow -0.4% vs -0.7% vs -0.3% vs -1% vs -0.4%; Transports -0.2% vs -1.3%! vs -0.3% vs -1% vs +0.2%; Dow Utilities UP 0.5% vs +0.2% vs -0.3% vs -0.4% vs -0.5%; S&P 500 FLAT vs -0.8% vs -0.2% vs -0.9% vs -0.5%; Nasdaq Composite -0.5% vs -1% vs -0.2% vs -1.3% vs flat; Nasdaq 100 -0.6% vs -1% vs -0.1% vs -1.3% vs +0.1%; Russell 2000 -0.4% vs -1.2% vs -0.3% vs -1.3% vs -0.1%; NYSE Financials UP 0.7% vs -0.8% vs -0.3% vs -1% vs -1.4% (KBW Banks UP 1.2% vs -0.9% vs -0.5% vs -0.8% vs -1.5%; Nasdaq Banks UP 0.8% vs -0.4% vs -0.6% vs -0.5% vs -0.5%). NYSE Financial Leaders: BAC +2%! vs -1.5% vs -1.3% vs -2.1% vs -3%!; GE +0.3% vs -2.3%; C FLAT vs -0.9% vs -0.9% vs -1.8% vs -3%!. Not leaders, but… JPM +1% vs +0.9% vs +0.2% vs -4.5%!!! vs -4.2%!!!; WFC DOWN 2% vs -0.9% vs +0.6% vs -0.2% vs -1%; USB +1.2% vs -0.4% vs flat vs -0.9% vs -0.9%. TB would buy USB since it had two cycle highs last week but for the miserable dividend of 2.4%.

Global stocks weak, especially Asia! FTSE -1.1% vs -0.1% vs +0.8% vs -0.4% vs flat; CAC 40 -0.5% vs -0.3% vs +1% vs -0.2% vs -0.4%; DAX -0.8% vs +0.5% vs +1.2% vs flat vs -0.4%; Nikkei -1.5%! vs -0.1% vs -0.4% vs -1.4% vs -0.7%; Hang Seng -2%!!! Vs +0.1% vs -0.2% vs -1.9% vs -0.1%; Korean KOSPI -2.2%!!! vs -0.2% vs -0.4% vs -1.2% vs -0.9%; Indian Sensex -1.5%! vs -0.7% vs +1.3% vs -0.7% vs -0.1%. U.S. stock futures also weak but off lows: DOW -79 vs -104; SPX -9 vs -12; NDQ -14 vs -19!

Bunds and UST rallying on Euro weakness: 10 yr 1.49% +1/4 – record low 6/1 of 1.442%!; 30 yr 2.59% +9/16. Long TIP 0.38% +5/8. Record low yield of 0.347% on 6/1. The 5 yr TIP yields -1.19%!; 10 yr -0.63%…both strong! Bills 0.07% 1 month; 0.10% 3 months; 0.15% 6 months. Reverse Repo 0.25%. 3 mo. Libor 0.46%, and 0.73% – starting to look like it could go lower. European problem sovereign 10 years, Germany-benchmark: 1.25% -2 bp’s; Italy 5.84% +5; Spain 6.58% +8; Greece 24.53% -4; Portugal 10.13% -1; Ireland 6.00% +3.

Gold closed down and remains below $1600 for a 4th day and never touched it again: 1575.70 -$4.10 but $10 above the session low of $1565.50. 6/28’s intraday low of $1547.60 was lowest since June 1. The hit is $188 since 2/28! 2/28’s $1792.70 intraday high was not seen since 11/16! The record high is $1923.70, a buying climax on 9/6. Res is $1590, the 40 day and $1596, the 50 day, then $1666, the 200 day. 5/2’s o/n low of $1526.70 was lowest since 12/29! Overnight it is $1562.40 -$13.40, low $1561.10. Crude rose slightly closing at $85.81 +$1.90. The intraday low on 6/28 of $77.28 was lowest since 10/5/11. RES at the 40 day (85.53), the 50 day (88.27), then the 200 day (96.01)…40/50 still plunging! First REAL res $89.17, the 11/1/11 low, then $92.52-54, the lows of 12/16-12/17, a prior double bottom, MAJOR sup remains at $74.95, the 10/4/11 low!!! It is now $84.55 -$1.26.

The last five days have now been weak for stocks, dropping off the sixth which was the last of the rally days. Also the ratio of new 52 week highs to lows is now just 2.3x steadily declining from the high six days ago of 20x at the peak of the rally. This rally has went! Advance/declines and breadth are weak, also for five days as even the high-freak traders aren’t pushing their luck. Volume remains pathetic and typical of summer doldrums. All major indices have been down for the last five sessions except Transports (4), while Utilities have posted gains last two sessions. The Nasdaq 100 had 7:3 declining led by MSFT and AAPLE -3; GOOG -2.5; QCOM -1 for 9 of the 14 points lost.

Bloomberg top story today cites CEO’s from P&G to Philip Morris blaming currencies for weak performance….hmmm…PM at 12 mo. high! PG below 40/50 day. PM div 3.4% while PG is 3.7%…is that enough for the price risk? Also, Warren Buffet now saying economy is slowing – BRK also at 12 mo. high with NO dividend. Hmmm again.

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

…me or your lying eyes? That is the motto of BOTH presidential hopefuls. So they say what they want…the public be damned…and to hell with facts. Fortunately factcheck.org is on the case and while both make wrong claims, Obama’s are closer to the truth, except for his continuing to say Bain cost American jobs…it did cost some but it did save some. Much the same as Mitt’s claims about Obama hurting the economy.

IF we had heard the whole truth about Obamacare would we hate it so much? Probably not, but the Dems could never explain it properly and the GOP continues to call it a tax hike by ignoring the number who will actually pay it, and the tax credits offsetting it but worse calling the $500 million Medicare savings a cut when it is offset by the increased revenues and then covered under the new healthcare plan.

Yesterday, TB said that the screaming about Obama’s proposed tax cut for those earning less than $250k applies to ALL taxpayers because it affects the FIRST $250k. Today, Robert Reich discussed that theme. Small businesses hurt? Pullease!!! If they earn $251k they will not be taxed at a higher rate EXCEPT on the last $1k of income…got it? Also, trust TB that small businesses use more tax dodges than anyone else to cut their costs. This from a friend and CPA.

So there you go…believe what either side tells you at your own peril then decide on which one is closer to the truth and which one is more on your side before you vote.

Think the NAACP was won over by Romney yesterday?

Have a great day!

TB

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