4/15/13…tax day…and all that glitters

From the Friars Club Encyclopedia of Jokes: “Repartee is something we think of twenty-four hours too late.” – Mark Twain

Data indicates that US economy is growing at 2.9% in the 1st quarter.   Factory orders, construction spending, business inventories, and exports rose while the recent consumer sentiment, retail sales and ISM manufacturing and ISM non-manufacturing fell. Labor market trends are improving. Inflation remains modest. This week’s economic calendar is fairly light. The highlight of the week will be the March CPI (Tuesday). We will get April Empire State Manufacturing (Monday), March Housing Starts, March Industrial Production (Tuesday), April Philadelphia Fed Survey, and March Leading Indicators (Thursday). Courtesy of Economics Advisory Service.

Bloomberg Quote of the Day: “To be successful, the first thing to do is fall in love with your work” – Sister Mary Lauretta…it helps if you make a lot of money doing it!

Bloomberg Top Stories:

*Gold Leads Commodities Lower as China’s Expansion Falters; Stocks Decline

*China Economy Unexpectedly Lost Momentum in First Quarter on Slow Spending – !!!

*Banks Drop Off ISDAFix Panel as Regulators Investigate Rate Manipulation

*Gold Bulls Endure Bear Market Drop as Goldman Sees Decline Accelerating

*TIPS in Longest Selloff Since 2008 as Pimco Buys While U.S. Bancorp Exits

*Invesco’s Leveraged-Loan ETF Lures Bears as Swaps Dwindle

*Google Offer to Settle EU Antitrust Probe is No-Go, Microsoft Lawyer Says

*Bird Flu to Dead Hogs in River Threaten China Demand for Soybean Imports

*Stocks Decouple From Bonds as S&P 500 Defies Biggest Yield Drop Since June

*Chavez Heir Maduro Wins Venezuela Vote as Rival Capriles Challenges Count

*House Hurdles Loom for Guns-to-Immigration Compromises U.S. Senate Moving

*Turkish Pianist Sentenced for Insulting Islam Amid Concern on Free Speech

They just don’t get it, do they? This is not a time for a stock market rally while the Capitol burns…and retail seems to agree…it’s all up to the high frequency traders!

Two days of puny, rallies then down again. Only Dow Utilities were up, +0.2%, th rest all down led by NYSE Financials -0.5% and the Russell 2000, -0.4%Ah, another day of rally…except, once again, someone forgot to tell the Dow Transports which fell by 0.4%…also, while the Dow and S&P posted lukewarm 0.4% gains, Note that JPM’s and WFC’s earnings didn’t fool anyone, despite headline gains that normally would have taken the sector higher. Total NYSE Volume slipped again to 3.22B shares vs 3.38B vs 3.47B vs 3.23B…zzzzzz. A/D’s and Breadth were both negative.  The VIX however declined again – slightly – remaining well below the 40/50 day, and way below the 200 day m/a. Close was lowest since 3/15 – the 12 month low!

*Dow Transports -0.3% vs -0.3% vs +1.8% vs -0.3% vs +0.9% vs +0.3% vs -0.5% vs +0.1% vs -1.3% vs -1.2% vs -1.5%. Russell 2000 -0.4% vs +0.1% vs +1.8% vs -0.2% vs +0.9%, while Dow Utilities ROSE +0.2% vs +0.2% vs +0.8% vs -0.2% vs +0.9% vs +0.5%. The S&P 500 fell 0.3% vs +0.4% vs 1.2% vs +0.4% vs +0.6% vs -0.4% vs +0.4%. Nasdaq Composite and 100 were both down by about 0.2% vs +0.1% vs +1.8% vs +0.5% vs +0.6%, while the Dow was FLAT vs +0.4% vs +0.9% vs +0.4% vs +0.3% vs -0.3% vs +0.4% vs -0.8%.

*NYSE Volume slipped again to 3.22B shares vs 3.38B vs 3.46B vs 3.23B vs 2.82B vs 3.5B vs 3.32B vs 4.04B (highest since 3/15’s options expiry!). REAL Volume rose to 700M shares from a WEAK 643M vs 688M (ave this week was a weak 659M) vs 670M vs 583M vs 726M vs 647M vs 812M vs 639M vs 573M vs 876M (high since since 3/15) vs 596M shares vs 558M shares –the range since 2/11 is 558M to 1.825B on 3/15’s options expiry and a near 12 month high, second only to 12/21’s 1.88B shares. Note that 3/15’s (options expiry) was the only day since 2/28 to register over 1B shares! Ave vol. 12 mos. 736M, ytd 714M. There have been just 11 800+M shares in 2013 – mostly on DOWN days!

  1. new 52 week highs which have ranged from 121-709, were halved to 285 vs 591 vs 505 vs 312 vs 269 vs 146 vs 143 vs 193 vs 417. New lows nearly doubled to 76 vs 41 vs 31 vs 52 vs 55 vs 96 vs 81 vs 114 vs 64; recent high 98.
  2. Advance/Declines were negative: -1.5x vs +1.6% vs +3.1x vs +1.4x vs +1.2x vs -1.1x vs +1.6% vs -3.7x on NYSE and -1.5x vs -1.1x vs +3.8% vs -1.2x vs +1.5x vs -1.5x vs +1.8x vs -3.3x on Nasdaq. Breadth was similar: -2.2x vs +1.7x vs +3.2x vs +1.9x vs +3.7x! vs +1.0x vs +2.4x vs  -5.7x!!! on NYSE and -1.4x vs -1.2x vs +6.5x!!! vs +2.1x vs +2x vs -1.5x vs +2.1x vs -4.3x!!! on Nasdaq.
  3. The Dow was FLAT vs +0.4% vs +0.9% vs +0.4% vs +0.3%. Dow Transports FELL -0.3% vs -0.3% vs +1.8% vs -0.3% vs +0.9% vs +0.5% vs +0.9% vs -1.3% while Dow Utilities rose 0.2% vs +0.2% vs +0.8% vs -0.2% vs +0.7% vs +0.5% vs +0.9%.The two Nasdaq indices fell by about 0.2% vs -+0.1% vs +1.8% and 1.9% (95/5!) respectively. The Russell 2000 declined 0.4%! vs +0.1% vs +1.8% vs -0.2% vs +0.9% vs -0.3% vs +0.8% vs -1.7%. NYSE Financials fell by 0.5% vs +0.4% vs 1.6% vs +0.4% vs +0.7% vs -0.3% vs +1% vs -1.6%. Brokers -0.7% vs +0.7% vs +2.3% vs +0.4% vs +1.1% vs -0.2% vs +0.8% vs -2.1% while the two bank indices slipped by 1.1% and 0.9% respectively. BofA again most active -0.8% to $12.17 vs -0.4% vs +0.6% vs +0.3% vs +2% vs  +0.3% vs +1.1% vs -2.8%- the range is $11.11, on 12/17 to $12.78 on 3/20. Note: 12 cents is a 1% change!!!.
  4. Lastly, volatility (S&P VIX), fell for a 5th day to 12.06 -.18 vs 12.84 vs 12.84 vs 13.19 vs 13.92 vs 13.89 vs 14.21 (high of 14.66 from a multi-year low!!!), it is oscillating wildly in a narrow range of 12.06-14.66, average 13.23, well below the 40/50 day (13.53/13.49) and the 200 day at 15.72…ytd the average has been 13.53 with a range of 19.28 (2/25!) to 11.05 (3/14) – 12 mo. ave 16.64!!! Prediction: it will fall until it doesn’t (can’t?) and then it will be time to sell ahead of a market decline!

Global equity markets WEAK for 2nd time in FIVE sessions, ex-India: UK -1.1%!!! vs -0.4% vs +0.3% vs +0.8% vs +0.5%; France -1%! vs -1.1%! vs +0.6% vs +1.3% vs +0.3%; Germany -1%! vs -1.5%!!! vs +0.4% vs +1.2% vs +0.1%; Japan -1.6%! vs -0.5% vs +2%!!! vs +0.7% vs flat; Hang Seng -1.4%! vs -0.1% vs +0.3% vs +0.8% vs +0.7%; Korea -0.2% vs -1.3%!!! vs +0.7% vs +0.8% vs +0.1%; India UP 0.6%! vs -1.6% vs +0.7% vs +1% vs -1.2%. U.S. stock futures weaker for a 2nd session: DOW -47; SPX -7.30; NDQ -11.75.

Bonds closed higher on the weak stocks and economic news and up again overnight: 10 yr Treasury 1.71% +1/8 (recent range WAS 2.06% to 1.85%), and the 30 yr’s 3.26% to 3.05%, 2.89% +1/2 The long TIP also rallying – finally – after setting a new (record?) low of 0.36%, before backing off to 0.52%, now 0.43% +11/16. The high yield was 0.67%! Libor update: 0.240% 3 mos., 0.438% 6 mos. Foreign bond yields mostly lower with problem countries weaker: Germany 1.24% -1; UK 1.70% -2; France 1.79 -1, Italy 4.32 +1; Spain 4.70% +2; Portugal 6.13% -5!!!; Greece 11.05% vs 11.05% vs 11.06% vs 11.25% vs 11.43% vs 11.53% vs 11.94% vs 11.20% vs 11.94% vs 12.09% (recent range 10.58-12.57%!).  

Gold was a bloodbath Friday and even worse overnight. Friday’s intraday low was $1476 but managed to close at $1501.40 -$63.50!!! We are at levels not seen since March 2011! It is way below resistance and the 1/17 high of $1699.90. The recent intraday high was $1618.30 (3/21), almost to the 40 day on 3/21!  Last time it was below $1500 was Sept. 2011, now MAJOR RESISTANCE!!! The breakdown puts resistance at the 40/50 day m/a’s $1587-1603 – still falling steadily. Overnight it is $1401.90 -$99.50!!! with a session low of $1385 – lowest since 1/16/11!!! Crude was also WEAK closing at $91.29 -$2.22. Friday’s intraday low was $90.27 – lowest since 3/7 –  resistance at the 40 day ($93.54) and the 50 day ($94.49)….now add the 200 day at $91.51!!! The high of $97.80 on 4/1 was highest since 2/15! The range is $90.27-$97.80 since 12 of 12! day Overnight  slammed at $89.09 -$2.20 WITH a session low of $88.05 – lowest since 12/13/12

 

Some random thoughts:

Gold is off $164 in just TWO sessions…can’t remember when that happened…traded to $1385 overnight!!! and is just above $1400 now. Crude not much better as it too is being slammed and has lost over $5.50 since Thursday! Why do we insist on pretending that earnings are all that matters? Are we totally blind?

John Paulson, who managed to ‘ace’ the mortgage-backed trade in 2008…actually is was his bond guy as Paulson didn’t know a thing about mortgages…had lost $300 million personally on gold as of Friday…that means it must now be close to $900 million. He was in good company along with Marc Faber who also believed gold was the place to be.

The lesson of this is that there are no guru’s out there and anyone who purports to be – including this writer – should be considered charlatans…avoid like the plague!

On a brighter note…how about the Master’s…where Michelson played horribly, and Rory, Luke, and the others not so hot. Snedeger caved under the pressure while Angel Cabrera played like it was a practice round…seemed totally relaxed. But three Aussie’s kept plaguing him: Leishman, Day, and Adam Scott. In the end, after three stunningly close holes – two in sudden death where they matched one another on position and distance – Scott prevailed but it couldn’t get any more exciting than that. To TB, it was the best finish ever.

Now on the dark side of the Masters: those illustrious gentlemen who run the club, announced that they have not yet decided to let IBM’s CEO, Virginia Rometty become a member…see this is a matter of deep thought. After all, you have to have the right woman…last year they admitted the first woman, Condolezza Rice, perhaps because she scored two points with them but at the Master’s last year, Rometty couldn’t be in the all male clubhouse. Isn’t that wonderful? How American!

Also, as we debate the budget and taxes, think of this: although the Master’s doesn’t award cash prizes (just one green jacket to the winner), in professional golf, where do you think the money comes from? Mainly corporate sponsors, along with the gallery. It is of course tax deductible for a coporation as advertising…hello???…so since it reduces their tax burden (sic – most pay less than 10%), it is we, the people, who pick up the tab. I love golf but let those who benefit pay not the taxpayers. Take that, GOP!

Have a good one…tee ‘em up!

TB

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