5/1/13…May Day! May Day!…a government no longer of, by, or for the people

From the Friar’s Club Encyclopedia of Jokes: “We have 35 million laws to enforce the ten commandments.”

Bloomberg Quote of the Day: “Manners require time, and nothing is more vulgar than haste.” – Ralph Waldo Emerson – Congress only does so though when it serves them!

 

Bloomberg Top Stories:

*Metals Decline With Oil as Manufacturing Slows While Stocks in U.K. Climb

*Fed Seen Slowing Stimulus With Bond-Buying Cut to $50 Billion by Year-End

*Factory Index in U.K. Advances More Than Forecast as New Orders Increase

*Apple’s Ive Said to Risk Delaying Operating System with Software Overhaul

*Cyprus Bailout Path Marred by Blunders as Euro Crisis Lessons Go Unlearned

*Yen’s Slide Slowed by Treasury Yields Losing Allure to Japanese Investors – aging!!!

*Merck Cuts Annual Profit Forecast as First-Quarter Earnings Top Estimates

*Buffett Adds Spice to Meeting as 32% Return Lulls Berkshire Shareholders

*London Attracts More Commercial Property Investment Than the Rest of U.K.

*Russia’s 20 Biggest Billionaires Keep Riches Offshore Out of Putin’s Reach – us too!

*Pope Urges Social Justice as Thousands Join May Day Rallies Across Europe

*Bangladesh Factory Toll Exceeds 400 With Europe Warning of Sanctions

*Obama Says U.S. Needs Hard Evidence Showing Syria Used Chemical Weapons

 

Ah, another ‘UP’ day – TB is losing his touch! But is he? Yesterday was monthend and beyond that the markets started to the downside before closing up. Furthermore, the weakest indices were the Dow 30, S&P 500 and Dow Utilities, with Transports the two Nasdaq’s and Russell 2000 doing the heavy lifting. Within the Nasdaq’s, the 100 rose 0.7%, 20 points but with 66 advancing and 33 declining. BUT Apple comprised 12.6 of those points, MSFT 3.5, and just 7 stocks made up the entire gain! THAT folks is not a broad-based rally. As for NYSE Volume it rose to a solid but not great 3.67B shares from a weak 2.88B while shares traded on the floor rose to 887M, first 800M+ day since 4/19 (options expiry…do you see a pattern here?). For a third straight session, Volatility swung wildly with a range of 13.51-14.28 before settling in at 13.52 -.01. Questions??? A/D’s and Breadth were slightly positive for a second day and New 52 week highs were back up near 500, but new lows rose again to 42 from a weak 29 – with markets near highs too!

So let’s see what else happened lately:

*Dow Transports +0.5% vs +0.6% vs +0.1% vs +0.1% vs 0.6%; Russell 2000 +0.5% vs +0.8% vs -0.5% vs +0.7% vs +0.5%; Dow Utilities +0.2% vs +0.7% vs flat vs +0.1% vs +0.4%; S&P 500 +0.3%? vs +0.7% vs -0.2% vs +0.4% vs flat. Nasdaq Composite +0.7% vs +0.9% vs -0.3% vs +0.6%, NDQ 100 +0.7% vs +0.9% vs -0.3% vs +0.5% vs flat, NYSE Financials +0.7% vs +0.7% vs -0.1% vs +0.5% vs +0.7%. Dow 30 +0.1% vs +0.7%….S&P 500 +0.3% vs +0.7% – some benchmarks!

*NYSE Volume bounced back from that way below average at 2.88B shares (weakest in 15 sessions!!!) to 3.67B shares…so?. REAL NYSE Volume surged to 887M shares from 599M shares (lowest since 4/8) vs 628M vs 746M vs 706M vs 620M following SIX 700M+ share days ranging from 975M (selloff) to 743M (rally). Opening volume was higher than usual while stocks initially headed sought for about the first two hours then came back and rallied steadily into the close, but look: it crossed 500M just 19 minutes before the close hit 619M at the close with the remaining 268M shares on the close – indexers squaring positions for monthend! Sheesh!!!  The average last week was just 687M shares vs 859M vs 689M!!! the last options expiry came in at a solid but not great 914M shares. The 12-month average is just 746M 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! There have now been  just fifteen 800+M shares in 2013 – just 4 up, 11 down and on trades of less than that 69 have been up and just 18 down…there have been 19 mixed sessions…do you see why volume matters???

  1. new 52 week highs have ranged from 121-709, rising to 486! vs 418 vs 267 vs  495 vs 400 vs 400 vs 237 vs 228 vs 106 vs 100. New lows bounced back to 42 vs 29 vs 40 vs 34 vs 48 vs 43 vs 96 vs 82 vs 159 vs 237 vs 120 vs 197.
  2. Advance/Declines were only slightly positive: +2x vs +2.8x vs -1.4x vs  +1.8x vs +1.9x vs +4x vs +1.4x vs +2.6x vs -1.2x vs -3.5x vs +4.4x vs -7.1x on NYSE and +1.5x +2.1x vs -1.6x vs +1.7x vs +1.3x vs +3.4x 0.7% vs +1.5% vs +0.3% vs +1.3% vs  -0.8% vs -1.8%! Breadth was even less impressive: +1.6x? vs +3.4x vs -1.8x vs +2.2x vs +2.1x vs +3.9x vs +1.6x vs +2.3x vs -1.3x vs -10.5x!!! vs +6.4x vs -7.2x vs -2.2x on NYSE and +1.9x vs +2.3x vs -1.1x vs +1.8x vs +1.5x vs +3x vs +2.5x vs +2.3x vs -3x! vs -5.2x vs +6.2x vs -12.8x!!! vs -1.4x .  
  3. NYSE Financials rose by 0.7% vs +0.7% vs -0.1% vs +0.5%. BofA only ‘most active’ financial fell again to $12.31 -.07 or -0.6% vs -0.3% vs +0.2% vs +2% vs +3% vs +0.5%.
  4. Volatility (S&P VIX) fell  to 13.52 -.19, but had a range of 13.51-14.28 – still skittish – does this seem sensible to reinstitute those limit/stop orders again??? The range for the last two week was 12.06 (multi year low) to 18.20, and it is now just below the 40/50 day (13.71/13.81) and the 200 day at 15.40…ytd the range is 19.28 (2/25!) to 11.05 (3/14) – 12 mo. ave 16.43!!!

Global equities mixed, Hang Seng, Nikkei, Kospi all closed today: UK +0.7%! vs -0.1% vs +0.2% vs -0.5% vs +0.1%; France -0.3% vs flat vs +1% vs -0.8% vs +0.2%; Germany +0.5% vs +0.8%??? vs +0.4% vs +0.4% vs +0.6%; Japan -0.4% vs -0.2% vs closed vs -0.3% vs +0.6%; Hang Seng +0.7% vs +0.7% vs +0.2% vs +0.7% vs +1%! vs +1.7%!!!; Korea closed vs +1.2%! vs -0.2% vs -0.4% vs +0.8%; India closed+0.6% vs +0.5% vs -0.6% vs +1.2%! vs closed vs +0.1%. U.S. stock futures in a narrow trading range overnight and at lower end: DOW -31;  SPX -2.90; NDQ +0.50.

Bonds held most of their recent gains from Monday and are rallying again overnight with 10’s AND 30’s both at new low yields: 10 yr Treasury 1.64% +5/16 (recent range now 2.06% to 1.64%), and the 30 yr’s 3.26% to 2.84%, 2.88% -1/16. The long TIP is now 0.44% +1/4 – recent range is from the  new (record?) low of 0.36% on 4/5 to  to 0.52%! The recent high yield was 0.67% on 3/11! Libor update: 0.273% 3 mos., 0.425% 6 mos. Foreign bond yields little changed – ex-Greece: Germany 1.21%; UK 1.70% +1; France 1.71%, Italy 3.88%; Spain 4.11%; Portugal 5.62% -1; Greece 10.64% -11!!! vs 10.81% vs 10.92% vs 11.18% vs 11.13% vs 11.05% vs 11.08 vs 11.22% (recent range 10.58%-12.57%!). Japan 0.58% -2.   

Gold closed slightly higher again at $1472.10 +$4.70 following Friday’s new intraday high of $1484.80, highest since 4/12! Last Tuesday’s intraday low of $1321.50 – was lowest since Sept. ’10. The loss over the two weeks is now back to $28. A week ago Monday’s $149 loss to a 52 week low of $1361.10 was disastrous. Resistance remains way above at the 40 day/50 day: $1532-1543 – still falling! Overnight it is $1459.50 -$12.60. Crude closed sharply lower at $93.46 -$1-04, following Monday’s new intraday high of $94.69, highest since 4/11. Crude remain above resistance at the converging 200 day ($91.88), 50 day ($92.57) and the 40 day ($92.65)!!! It had erased all of the loss since 4/5 Overnight it is $91.31 -$2.15!!! OOPS!!! Last Tuesday’s session low of $86.20 was lowest since 12/13/12! The range is now $85.61-$97.80 since June 29, 2012!!!!

 

Some random thoughts:

Our government continues to stink up the place, companies stretch their tax advantages by doing one of the most dangerous things they can: pay dividends with borrowed money. Apple now joining this lunacy. Meanwhile, the wealthiest Americans continue to amass wealth with the blessings of their party, the GOP. All in the name of austerity.

We live in a very sick country. Nothing more to say!

TB

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