From the Friar’s Club Encyclopedia of Jokes: “I love when the stewardess says, “Your seat cushion becomes a flotation device.” Well, why doesn’t the plane just become a boat?” – Steve Shaffer
Bloomberg Quote of the Day: “Do not fear mistakes. You will know failure. Continue to reach out.” – Benjamin Franklin
Labor market trends are improving with the recent drop in claims and strong gains in nonfarm payroll employment. However, manufacturing activity is weakening. Despite stronger real consumer spending growth in Q1, recent Motor Vehicle sales numbers suggest deceleration in consumer spending in the current quarter. Inflation remains subdued.
This week’s economic calendar is packed with important indicators. The highlight of the week will be the April Retail Sales (Monday), April PPI (Wednesday) and April CPI (Thursday).
We will also get March Business Inventories (Monday), April Import & Export Prices (Tuesday), April Empire State Manufacturing and April Industrial Production (Wednesday), April Housing Starts and April Philadelphia Fed Survey (Thursday), and April Leading Indicators and May Preliminary Consumer Sentiment (Friday). Courtesy of Economic Advisory Service.
Bloomberg Top Stories:
*U.S. Retail Sales Unexpectedly Climb in Sign Consumers Gaining Confidence – maybe!
*Europe Stocks Pare Gains With S&P 500 Futures on Retail Sales (?) as Yen Falls
*Euro Gain Aided by Trade Surplus Topping China for First Time Since 2004
*America Animal Spirits Since ’07 Proving Superior to Europe Mired in Slump
*Israel Cuts Key Interest Rate, Will Buy Foreign Currency to Rein in Shekel
*Euro Recession Seen Persisting to Longest Since Single Currency’s Creation
*Draghi Gets Boost for Bond Market as His Tool Box Empties
*Bull Market Matches 1990s Interest-Fired Returns With Valuations 28% Lower
*Congressional Committees Set to Probe IRS Targeting of Tea Party Groups
It was just your typical day on Friday – in an era of High Freak trading that is. Friday is options expiration however so let the fireworks began. Have an opiniont but don’t fight the tape…nor get enamored with it even if Prof. Siegel sees Dow 17k by yearend. I’m not even going to try to analyze the activity other than to say volume was WEAK!
So let’s see what else happened:
*Dow Transports +0.6% vs -1.1% vs +0.2% vs +1.6% vs +1.3% vs +2.1%; Russell 2000 +0.9% vs -0.4% vs +0.1% vs +0.8% vs +0.6%; Dow Utilities +0.2% vs -1.5% vs -1.2% vs +0.9% vs -1.4%; S&P 500 +0.4% vs -0.4% vs +0.4% vs +0.5% vs +0.2%; Nasdaq Composite +0.8% vs -0.1% vs +0.5% vs +0.1% vs +0.4%, NDQ 100 +0.7% vs -0.2% vs +0.5% vs -0.1% vs +0.4%, Dow 30 +0.2% vs -0.2% vs +0.3% vs +0.6% vs +1%.
*NYSE Volume plunged to a well below average 3.09B shares vs 3.49B vs 3.55B vs 3.3B vs 3.05B vs 3.6B vs 3.5B vs 3.67B vs 2.88B shares (now weakest in 23 sessions!!!). REAL NYSE Volume also FELL to a well below average 630M shares vs 670M vs 727M (highest since 4/30) vs 636M vs 619M vs 716M vs 643M vs 697M vs 887M vs 599M shares (lowest since 4/8)….indicative of a total absence of retail! Recent highs were 975M (selloff) to 887M (rally). The average last week was a weak 657M shares vs 720M vs 687M vs 859M vs 689M, and the week’s high was just 730M shares! The last options expiry came in at a solid but not great 914M shares. The 12-month average is just 731M 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 been just fifteen 800+M shares in 2013 – just 4 up, 11 down, but on trades of less than that 74 have been up and just 20 down…there have been 20 mixed sessions…hint: low volume rallies!!! Real buyers???
- new 52 week highs have recently ranged from 100-722, They fell again to 513 vs 613 vs 769 vs 722 vs 499. New lows rose slightly to 52 vs 37 vs 45 vs 36 vs 32. Recent range is 29 to 237.
- Advance/Declines were modestly positive: +1.7x vs -1.8x vs +1.9x vs +2.9x vs +1.5x (compare to +4x, +2.6x, -3.5x, +4.4x, -7.1x) on NYSE and +2x vs -1.5x vs +1.4x vs +1.7x vs +1.5x on Nasdaq. Breadth was similar: +2x vs -1.9x vs +2.3x vs +2.5x vs +2.2x (also compare +3.4x, 3.9x, -10.5x!!!, +6.4x, -7.2x) on NYSE and +3.5x! vs -1.1x vs +1.8x vs -1.1x (compare +3x, -3x!, -5.2x, +6.2x, -12.8x.
- NYSE Financials +0.3% vs -0.8% vs + 0.6% vs +0.6% vs +0.6%. BofA rose again by 0.9% to $13.02 +.11 just below the one $13.05 (high since 4/13/11!)
- Volatility (S&P VIX) fell again to 12.59 -.54…too low? The range for the last three weeks is 12.06 (multi year low) to 18.20, and it is below the 40/50 day (13.49/13.85) and the 200 day (15.26)…ytd the range is 19.28 (2/25!) to 11.05 (3/14) – 12 mo. ave 16.43!!!
Global equities slightly weaker, ex-Japan/Korea: UK -0.1% vs +0.5% vs -0.1% vs +0.2% vs +0.4%; France -0.2% vs +0.9% vs -0.9% vs +0.8% vs +0.7%; Germany -0.1% vs +0.7% vs -0.2% vs +0.6% vs +0.9%; Japan +1.2%! vs +2.9%!!! vs -0.7% vs +0.7% vs +3.6%!!!; Hang Seng -1.4%! vs +0.5% vs -0.1% vs +0.9% vs +0.6%; Korea +0.2% vs -1.8% vs +1.2% vs +0.1% vs -0.4%; India -2.1%!!! vs +0.7% vs -0.3% vs +0.5% vs +1.1%. U.S. stock futures slightly lower in a very narrow trading range session: DOW -21; SPX –2.90; NDQ -3.25. Stocks opening lower: Dow-31; S&P -2.55; COMP -2
Bonds slaughtered again on Friday and weaker overnight – the 30 yr is WELL ABOVE 3%…one heck of an ‘E’ ticket ride!!!!: 10 yr Treasury 1.92% -1/4 (recent range 2.06% to 1.63%!!!), and the 30 yr’s 3.26% to 2.82%!!!, now 3.13% -5/8. The long TIP is at a new recent high of 0.68% -11/16– and still performing miserably since setting a new (record?) low of 0.36% on 4/5. The recent high yield was 0.67% on 3/11! Libor update: 0.275% 3 mos., 0.426% 6 mos. Foreign bond yields little changed: Germany 1.35% -3; UK 1.89% -1; France 1.93% +1, Italy 3.95% +7; Spain 4.25% +7; Portugal 5.39% +1; Greece 9.4% +3 vs 9.40% vs 9.44% vs 9.53% vs 9.58% vs 9.68% vs 10.09%!!! vs 10.64% vs 10.81% vs 10.92% vs 11.18% vs 11.13% vs 11.05% vs 11.08 vs 11.22% (recent range now 9.40%!!!-12.57%!)..
Gold closed sharply lower, yesterday at $1436.60 -$32. with a low of $1418.50, lowest since 4/24. 5/3’s high of $1487.20 was highest since 4/12. 4/16’s intraday low of $1321.50 – was lowest since Sept. ’10. Resistance remains way above at the 40 day/50 day: $1510-1524. Overnight it is weaker at $1431.80 -$4.8. Crude also closed lower at $96.04 -.35, four days after posting a new rally high of $97.17, nearing a 12 month high! It is well above Sup/Res at the 40 day ($93.26), 50 day ($92.92) and 200 day ($92.07). Overnight it is $95.38 -.66. 4/18’s low of $85.61 was lowest since 12/11! The range is $85.61-$97.80 since June 29, 2012!!!!
Some random thoughts:
Is there anything left in America that hasn’t been politicized? Our Congressional leaders (sic) are totally irresponsible and intent on making us – as a country – look bad in the eyes of the world.
Benghazi worse than Watergate? Pullease! Sure a coverup, but it certainly would have been exploited…not justifying it but…consider how a GOP Congress allowed Bush, Cheney, and Rumsfeld, a free ride on a stupid, costly, and Middle East destabilizing war on horrible (a compliment) intelligence from sources only interested in their personal gains…which included monetary.
Now an IRS scandal…in what has proven to be SOP. True, it is horribly wrong, but so is two brothers who set up the Tea Party to further their own greedy interests.
There is now black or white…merely 50 shades of gray…and counting.