8/10/12…Handel’s messiah?

From Keep Calm and Carry On: “Luxury: the lust for comfort, that stealthy thing that enters the house as a guest, and then becomes a host, and then a master.” Kahlil Gilbran

Perhaps the best explanation of why we merely have an ‘apparent’ middle class, no? TB

Bloomberg Quote of the Day: “When ideas fail, words come in very handy.” – Johann Wolfgang von Goethe – they certainly do Ollie, they certainly do. TB

Bloomberg Top Stories:

*Slide in China’s Export Growth Increases Odds of Further Economy Stimulus –perhaps this explains recent poor performance of transportation sector? Just asking. TB

*Stocks Fall With Copper, Oil on China Trade Weakness; Corn Rises to Record

*Standard Chartered Fitness is Key Shutdown Grounds in N.Y., Not Laundering! Ouch!

*Norway Sovereign Wealth Fund Fell $33 Billion in Quarter as Stocks Dropped – Rally?

*KKR Doubles European Distressed Lending Business as Banks Take Hard Line

*Hong Kong Cuts 2012 Growth Forecast After Expansion Wanes on Export Slump

*Treasuries Start Paying First Positive Yield Since 2011 – what if 10-year tops 2%?

*Alan Greenspan Can’t See How Greece Can Remain Euro Member – same as he did!

*What’s Fed Supposed to Do When 15 of 18 Banks Fixing Libor Aren’t American?

*Romney Gets Welfare Politics Right as Campaign Attack Ad Misses on Fax – same old!

*Obama Finds No Easy Way to Prevent Underwater Homeowners From Defaulting

*Syrian Fighting Uproots 1.5 Million People as Iran Leads Cease-Fire Call – Iran???

Another mixed day adds to confusion over market direction and threatens to curb the faux rally.Volume declined again to 3.07B vs 3.21B vs 3.64B vs 3.01B shares vs 3.75B vs  4.12B shares vs 4.34B! The range since 7/29’s QE surge of 4.56B (above average) remains 2.06B-4.28B shares with just 2 days above 4B! NYSE stocks executed without the aid of the ETN market plunged again establishing another lower low since 7/10: 576M vs 637M vs 728M vs 647M vs 754M vs 826B vs 1.03M – that is 2nd lowest of 2912! Just 7 of the last 28 sessions have surpassed 800M shares. The average for 2012 is just 809M shares and since 6/29 just 747M shares, levels not seen since week ended 12/30/11! 55 of the last 89 sessions have been less than 800M shares. Since 2/29 there have been just 19 ‘average’ days (mostly down!), including 3/16’s high for 2012 of 1.65B (4.85B including ETNs) and just 17 have been above 900M – 909M is the 12 month average. Since 11/1 there have been just 16, 1B share days…12 in 2012! Since 2/6 there have now been 19 sessions less than 700M shares. 170 of the last 192 sessions have been less than the 12 mo ave (89%)!

Advance/Declines were slightly positive at +1.3x vs +1.1x vs +1.8x vs +1.7x +4.7x! on NYSE and +1.2x vs -1.3x vs +1.8x vs +1.6x vs +3.4x! on Nasdaq. Breadth was similar: +1.8x vs +1.7x vs +2.4x vs +2x vs +7.1x on NYSE and +1.5x vs +1.6x vs +3.9x vs +3.3x vs +4.7x on Nasdaq. New 52 week highs were stable at 222 vs 219 (7/3’s 504 is the high), as were new lows at 55 vs 55. The ratio was stable at +4x vs +4x vs +5.6x vs +5.4x vs +3.9x. The S&P VIX rose slightly to 15.36 +.04 – weird! 7/15’s 20.47 was highest since June 15th. 15.45 is lowest since 3/26 – the low for this year!

Here are the results of last 5 sessions, last of the declines have fallen off: Dow DOWN 0.1% vs +0.1% vs +0.2 vs +0.2% vs +1.7%; Transports DOWN 0.5% vs -0.3% vs +0.2% vs -0.1% vs +2.1%;Dow Utilities +0.1% vs -0.2% vs -0.1% vs flat vs +1.1%; S&P 500 FLAT vs +0.1% vs +0.5% vs +0.2% vs +1.9%; Nasdaq Composite +0.3% vs -0.2% vs +0.9% vs +0.7% vs +2%; Nasdaq 100 +0.2% vs -0.1% vs +0.9% vs +0.7% vs +1.9%; Russell 2000 +0.3% vs -0.2% vs +0.9% vs +0.7% vs +2.6%; NYSE Financials -0.1% vs -0.1% vs +0.6% vs +0.2% vs +2.7% (KBW Banks +0.1% vs -0.1% vs +0.8% vs +0.1% vs +3.1%; Nasdaq Banks -0.2% vs flat vs +0.7% vs -0.2% vs +2.8%). NYSE Financial Leaders: BAC +0.3% vs flat vs +0.4% vs +2.8% vs +3.5%. Not leaders, but…C flat for a second day vs +1% vs +4.2% vs -2.2%; JPM -0.6% vs +0.4% vs +2% vs +0.6% vs +2.6%; WFC flat vs -0.4% vs -0.1% vs -1% vs +3%; USB +0.1% vs -0.2% vs +0.2% vs -1.4% vs +1.8%; GS +1% vs +0.2% vs +1.2% vs +1% vs +3.2%; MS +1% vs +0.5% vs +2.5% vs +2.6% vs +5.8%; UBS -0.4% vs -0.8% vs +1.7% vs +1.2% vs +5%.

Global stocks weak on China growth, sans Korea.  FTSE -0.3% vs -0.2% vs -0.4% vs flat vs +0.3%; CAC 40 -0.9% vs -0.4% vs -0.7% vs +0.9% vs +0.7%; DAX -0.8% vs -0.3% vs -0.5% vs +0.6% vs +0.7%;Nikkei -1% vs -0.8% vs +0.9% vs +0.9% vs +2%; Hang Seng -0.3% vs +1.1% vs +0.4% vs +1.7% vs -0.1%; Korean KOSPI +0.3% vs +2%! vs +0.9% vs +0.1% vs +2%;Indian Sensex flat vs -0.2% vs flat vs +1.1% vs +1.3% vs -0.2%. U.S. stock futures also weak: DOW -54; SPX -6.60; NDQ -8.75.

Bonds finally off lows after 10 yr traded to 1.72%! 10 yr 1.64% +7/16 – record low of 1.40%; 30 yr 2.72% +15/16. Long TIP 0.39% +1 pt. 0.28% is record low!The 5 yr TIP yields -1.25%; 10 yr -0.64%Bills 0.09% 1 month; 0.11% 3 months; 0.14% 6 months. Reverse Repo 0.31% vs 0.26%! 3 mo. Libor 0.44%!!!, and 6 mo. 0.72% – both trading below 0.45% and 0.73%. European problem sovereign 10 years, Germany-benchmark 1.38% vs 1.40%; Italy 5.85% vs 5.80%; Spain 6.80% vs 6.82%; Greece 23.38% vs 23.29%; Portugal 9.57% vs 9.59%; Ireland 5.85% vs 5.90%.

Gold holding above $1600 but remains rangebound closing at 1620.00 +$3.80. 7/12’s intraday low of $1547.60 was lowest since June 1. The hit is $150 since 2/28! 2/28’s $1792.70 intraday high not seen since 11/16! The record high is $1923.70, a buying climax on 9/6. RES/SUP at $1600, the 40 day and $1603, then $1664, the 200 day. 5/2’s  o/n low of $1526.70 was lowest since 12/29! Currently $1612.30 -$7.90. Crude lackluster again but with a $1.14 range following Friday’s HUGE rally of 4.9%! It closed at $93.36 + 1 penny??? SUP at the 40 day (86.78), and the 50 day (86.18), both still rising! RES at the 200 day (96.65). First SUP is $89.17, the 11/1/11 low, RES/SUP $92.52-54, the lows of 12/16. It is WEAK on China overnight at 92.02 -1.34…o/n low: 91.89!

Advance/declines are positive but very thin as is breadth. The best indicator remains VOLUME which plunged yet again to 3.09B shares while NYSE trades executed on the floor plunged to 576M, second lowest of the year following 7/3’s 466M! The Dow and S&P were little changed for a third session, -0.1%/flat vs +0.1% vs +0.2% while Dow Transports were worst performer, off 0.3%. Attesting to the high freak trading is this: for a m UNHEARD OF FOURTH straight session, both Nasdaq indices and the Russell 2000 ALL rose by 0.2-0.3% vs -0.1-0.2% vs all rising by 0.9% and vs all up 0.7%! WEIRD!

Financials have lost their momentum and despite bad news the faux banks and brokers are up…even MS which is trying to restructure while UBS was off a tad.

China added to a weak Europe is not good for stocks and other living things.

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

…TB doesn’t understand the lack of concern from people in this business. Only a few enlightened ones dare to comment and those are the ones TB respects the most: Jeremy Grantham, David Kotak, Simon Johnson…where are the responsible people – not the perps but those who care and need to care about this financial system for it to survive?

Then of course there are the ideologues who are pumping millions into this election – worst are the corporations under a veil of secrecy so that shareholders don’t know if the CEO is looking after the corporate wellbeing or his own…wait, aren’t they one and the same these days? Is TB right about this, Jamie? Sandy?

We better find some leaders and fast and Mitt Romney is no messiah (no pun intended).

Have a great day!

TB

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