8/15/12…mostly Minnesota

Bloomberg Top Stories:

*U.S. Industrial Production Rose 0.6% in July on Autos, Utilities – not manufacturing!

*Bonds Fall on Bets Fed to Put Off Stimulus as European Stocks Pare Decline

*U.S. Consumer Prices Are Unchanged in Sign Companies Lack Pricing Power – !!!

*International Demand for U.S. Assets Declined in June From Previous Month

*Staples Declines After Cutting Full-Year Forecast Amid Slower U.S. Growth – !!!

*Moore Capital Leads Funds Avoiding ‘Dead Money’ in Selling JPMorgan Stakes – !!!

*Blackstone’s Wien Sees S&P 500 Reaching 1,500 in 2012 on Economic Momentum – ?

*Fed’s Dudley Supports Schapiro on Money Fund Rules to Protect U.S. Economy

*Gasoline Rising Most in 17 Months as Drop Seen Before Winter – yet crude is $93?

*Israel Prepares Nation for Iran Strike as Citizens Say This Time is Different – !!!

A very mixed day that showed little during the session with all indices in the red at some point. Volume rose to a weak 2.9B vs 2.48B vs 2.78B vs 3.07B vs 3.21B vs 3.64B. 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 also rose but only to 566M a day after the missing the lowest volume of the year by 18M shares!…and that was on a HALF DAY SESSION!: 567M vs 484M vs 566M vs 576M vs 637M vs 728M vs 647M vs 754M vs 826M vs 1.03B! Just 7 of the last 31 sessions have surpassed 800M shares. NYSE volume is running just 20% of total NYSE volume. Last week it averaged a pathetic 631M shares! There is NO retail! The average for 2012 is just 804M shares and since 6/29 just 727M shares, levels not seen since week ended 12/30/11! 58 of the last 92 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 – 888M is now 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 22 sessions less than 700M shares. 173 of the last 184 sessions have been less than the 12 mo ave (89%)!

Advance/Declines were negative for a second day at -1.1x vs -1.7x vs +1.2x vs +1.3x vs +1.1x on NYSE and -1.6x vs -1.3x vs -1.3x vs +1.2x vs -1.3x on Nasdaq. Breadth was similar: -1.1x vs -1.8x vs +1.6x vs +1.8x vs +1.7x on NYSE and -1.6x vs -1.2x vs 1:1 vs +1.5x vs +1.6x on Nasdaq. New 52 week highs climbed to a weak 190 vs 131 (7/3’s 504 is the high), while new lows rose slightly to 66 vs 61. The ratio rose to a weak +2.9x vs +2.6x vs +3.3x vs +4x vs +4x. The S&P VIX ROSE to 14.85 +1.15 vs 13.70 just .04 from the low of the year!

Here are the results of last 5 sessions: Dow flat vs -0.3% vs +0.3% vs -0.1% vs +0.1%; Transports +0.4%! vs flat vs +0.3% vs -0.5% vs -0.3%;Dow Utilities +0.1% vs -0.4% vs +0.3% vs +0.1% vs -0.2%; S&P 500 flat vs -0.1% vs +0.2% vs flat vs +0.1% vs +0.5%; Nasdaq Composite -0.2% vs +0.1% vs +0.3% vs -0.2% vs +0.9%; Nasdaq 100 flat vs +0.1% vs +0.2% vs -0.1% vs +0.9%; Russell 2000 -0.3% vs -0.3% vs -0.2% vs +0.3% vs -0.2%; NYSE Financials flat vs -0.1% vs +0.2% vs -0.1% vs -0.1% (KBW Banks flat vs -0.1% vs +0.1% vs +0.1% vs -0.1%; Nasdaq Banks -0.3% vs +0.1% vs -0.4% vs -0.2% vs flat). NYSE Financial Leaders: BAC +0.8% vs -0.3% vs +0.3% vs +0.3% vs flat; GE -0.2% vs -0.5%. Not leaders, but…C flat vs -0.4% vs +0.1% vs flat for two days; JPM +0.3% vs +0.6% vs +0.1% vs -0.6% vs +0.4%; WFC flat vs +0.4% vs flat for two days vs -0.4%; USB -0.5% vs +0.1% vs +0.3% vs +0.1% vs -0.2%; GS -0.3% vs +0.6% vs -0.6% vs +1% vs +0.2%; MS -0.9% vs -0.4% vs -0.7% vs +1% vs +0.5%; UBS -0.7% vs -0.7% vs +0.5% vs -0.4% vs -0.8%.

Global stocks weaker reversing Tuesday’s gains: FTSE -0.4% vs +0.3% vs -0.3% vs -0.2% vs -0.4%; CAC 40 -0.3% vs +0.2% vs -0.9% vs -0.4% vs -0.7%; DAX -0.5% vs +0.8% vs -0.8% vs -0.3% vs -0.5%;Nikkei -0.1% vs +0.6% vs -1% vs -0.8% vs +0.9%; Hang Seng -1.2% vs +1.1% vs -0.3% vs +1.1% vs +0.4%; Korean KOSPI closed vs +1.3% vs +0.3% vs +2% vs +0.9%;Indian Sensex closed vs +0.5% vs flat vs -0.2% vs flat. U.S. stock futures also weaker: DOW -24; SPX -2.80; NDQ -3.50.

Bonds have broken supports…what happens to stocks if 10 yr trades at 2%? 10 yr 1.76% -3/16 – record low of 1.40%; 30 yr 2.87% -11/16. Long TIP 0.55% vs 0.47%!. 0.28% is record low!The 5 yr TIP yields -1.13%; 10 yr -0.49%Bills 0.10% 1 month; 0.10% 3 months; 0.14% 6 months. Reverse Repo 0.21%. 3 mo. Libor 0.43%! and 6 mo. 0.72% – both trading below 0.45% and 0.73%. European problem sovereign 10 years, Germany-benchmark 1.52% vs 1.44%; Italy 5.76% -5; Spain 6.60% -6; Greece 23.71% +11; Portugal 9.55% +2; Ireland 5.83% +1.

Gold holding above $1600, but fell closing at the low of 1622.40 -$8.20 -$19 in two days! 7/12’s intraday low of $1547.60 was lowest since June 1. The hit is $165 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. SUP at $1598, the 40 day and $1602, RES at  $1662, the 200 day. 5/2’s o/n low of $1526.70 was lowest since 12/29! Currently $1603.30 +$1.20 – o/n low $1592.10! Crude remains moribund. It closed at $93.43 +.70. SUP at the 40 day (87.50), and the 50 day (86.76), both still rising! RES at the 200 day (96.66). First SUP is $89.17, the 11/1/11 low, SUP $92.52-54, the lows of 12/16. Currently $92.93 -.50

Advance/declines AND breadth remain weak! The best indicator remains VOLUME which rose slightly to a still weak 2.9B shares from 2.48B shares barely missing the 7/3 low of 2.06B, while NYSE trades executed on the floor rose to 567M vs 484M – second lowest of the year following 7/3’s 466M! The ratio of REAL trades to total NYSE volume  remains at just 20%! The Dow, S&P, Nasdaq 100 and NYSE Financials were all FLAT and have now been little changed for six sessions! The Nasdaq 100 had just three stocks moving by 1 index point or more. The Russell 2000 continues to break ranks and was the worst performer, -0.3%, which is usually a sign of bad things to come. Note that the VIX bounced from within .06 of the low for the year…that was brief!

Financials continue to lose their momentum and even the small percentage gains make the miniscule price changes of less than 10 cents a share, well…meaningless! Also, they are up 15% ytd but that is due to hedge fund buying…particularly JPM in the wake of the trading scandal…and they are now exiting the trades, attested to by the loss of big mo.

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

…we held our long-awaited primary, which included no choice for President thanks to be a ‘caucus’ state. That fact, caused rejection of moderate GOP candidates in favor of Tea Party candidates. It was also a reason why the well-organized Ron Paul supporters fared so well here.

Despite being proven daft for her unsubstantiated claims of vaccine causing death and the state department being infiltrated by Muslim terrorists (a la Tailgunner Joe McCarthy), Michelle Bachman won her district as expected and thanks to extreme right financial support with 83% support. What does this say about America today?

It is hell being in a state that has no say in nominating the president…but neither does New York or California…but Iowa and New Hampshire? Gimme a break!

TB stands by his prediction that this will be the dirtiest campaign in years – if not of all time. Thanks to the internet a group can disseminate falsehoods and cause the other side to spend its time trying to disprove them. It is very difficult to offset an accusation.

Meanwhile the SuperPacs have not yet begun to fight…

Have a terrific day!

TB

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