5/14/13…where’s the (our) outrage

From the Friar’s Club Encyclopedia of Jokes: “If a pickpocket would go through my pockets now, all he’d get is exercise.”

Bloomberg Quote of the Day: “We have forty million reasons for failure, but not a single excuse.” – Rudyard Kipling  

Bloomberg Top Stories:

*ECB Picks Fight With Germany on Rules for Handling Failing Banks in Europe

*Stocks in Europe Decline With Metals on China Concern as Yen Strengthens

*Lehman Reaching Beyond Grave to Grab Millions From Nonprofits Over Swaps

*Shopping for Ratings Revived in Asset-Backed Bond Rebound

*Pimco Pares Risky Holdings on View Monetary Easing Distorts Global Markets

*Banks on Verge of Collapse in Denmark Granted Extra Time as FSA Steps Back

*Shortest U.S. Rates Drop Below Zero Amid Cash Infusion

*Stockbrokers Go Gray as Youth Proves Unsustainable Without Any Cold Calls

*Russia Says CIA Agent Detained During Recruitment Attempt, IFX Reports

*IRS Set for Grilling in Congress as U.S. Lawmakers Query Tea Party Focus

*Obama Blames Gridlock on Republicans in Seeking Donors at N.Y. Fundraiser

*Cameron’s Bid to Defuse Rebellion on EU Draws Coalition Partner Criticism  

Stocks staged a selloff yesterday – of sorts! Dow Utilities (-0.6%) were worst, followed by the hot Dow Transports (-0.5%), while the S&P 500 and Nasdaq 100 were FLAT. The Composite was up just 0.1% and the Dow down 0.2%. Meanwhile, NYSE Volume plunged to 2.86B shares – taking out 4/29’s 2.88B shares for worst of year! REAL trades on the floor also fell to 594M shares, lowest since April 8! Thus the ‘selloff’ was manageable and not conclusive but Friday is options expiration so who knows? One reason may be the same ‘real’ investors who have not participated in the rally in a meaningful manner are probably doing the same and have shown no need to sell given the magnitude of the rally and the records that have been broken…along with generally solid earnings reports.

But the rally does appear to be running out of steam in a wave of mixed economic reports and slow job growth and worse: earnings!

So let’s see what else happened:

*Dow Transports -0.5% vs -1.1% vs +0.2% vs +1.6% vs +1.3% vs +2.1%; Russell 2000 -0.1% vs -0.4% vs +0.1% vs +0.8% vs +0.6% vs +1.6%; Dow Utilities -0.6% vs -1.5% vs -1.2% vs +0.9% vs -1.4%; S&P 500 FLAT vs -0.4% vs +0.4% vs +0.5% vs +0.2%; Nasdaq Composite +01% vs -0.1% vs +0.5% vs +0.1% vs +0.4%, NDQ 100 FLAT 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% – boring Dow!

*NYSE Volume plunged to 2.86B shares taking out 4/29’s 2.88B for low of the year vs 3.49B shares vs 3.55B vs 3.3B vs 3.05B. REAL NYSE Volume also plunged to a way below average 594M shares (lowest since 4/8) vs 670M vs 727M (highest since 4/30) vs 636M vs 619M – where’s retail??? Recent highs were 975M (selloff) to 887M (rally). The average last week was a weak 720M shares vs 687M vs 859M vs 689M!!! The last options expiry came in at a solid but not great 914M shares. The 12-month average is just 727M 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 73 have been up and just 21 down…there have been 20 mixed sessions…hint: low volume rallies!!! Real buyers???

  1. new 52 week highs have ranged from 121-722, They fell sharply to 462 vs 613 vs 769 vs 722 vs 499 (recent range 100-786). New lows were steady at 39 vs 37 vs 45 vs 36 vs 32 (recent range 29-237).
  2. Advance/Declines were negative: -1.5x vs -1.8x vs +1.9x vs +2.9x vs +1.5x vs +2.6x (recent range -7.1x to +4.4x) on NYSE and -1.2x vs -1.5x vs +1.4x vs +1.7x vs +1.5x (recent -3.5x to +3x). Breadth was mixed: -1.4x vs -1.9x vs +2.3x vs +2.5x vs +2.2x (recent -10.5x to +6.4x!!!) on NYSE and +1.2x! vs -1.1x vs +1.8x vs -1.1x vs +1.5x (recent -12.8x to +6.2x)  
  3. NYSE Financials rose 0.3% vs -0.8% vs + 0.6% vs  +0.6% vs +0.6% vs +0.6%. BofA declined by 0.4% to $12.98 posting just two $13 plus days since 4/11/11!
  4. Volatility (S&P VIX) dipped modestly to 12.55 -.04, in another narrow range session 12.49-12.87, compare to recent 13.58-14.48. The range for the last three weeks is 12.06 (multi year low) to 18.20, and it is below the 40/50 day (13.40/13.62) and the 200 day (15.09)…ytd the range is 19.28 (2/25!) to 11.05 (3/14) – 12 mo. ave 16.14!

Global equities mixed: UK +0.2% vs +0.5% vs -0.1% vs +0.2% vs +0.4%; France –flat vs +1% vs -0.9%! vs +0.8% vs +0.7%; Germany +0.3% vs +0.7% vs -0.2% vs +0.6% vs +0.9%; Japan -0.2% vs +2.9%!!! vs -0.7% vs +0.7% vs +3.6%!!!; Hang Seng -0.3% vs +0.5% vs -0.1% vs +0.9%; Korea +1% vs -1.8% vs +1.2% vs +0.1% vs -0.4%; India +0.2% vs +0.7% vs -0.3% vs +0.5% vs +1.1%. U.S. stock futures little changed in a very narrow trading range session: DOW +4; SPX +1.40; NDQ -0.50.

Bonds cannot stop their decline even on a day when stocks did poorly but modestly higher overnight – the 30 yr is still ABOVE 3%…one heck of an ‘E’ ticket ride!!!!: 10 yr Treasury 1.90% +3/16 vs 1.92 -3/16 (recent range 2.06% to 1.63%!!!), and the 30 yr’s 3.26% to 2.82%!!!, now 3.11% +7/16 vs 3.13% -11/16. The long TIP is 0.67% +1/4 vs 0.68% -13/16 – still performing miserably since setting a new (record?) low of 0.36% on 4/5. The recent high yield was 0.69% on 5/13! Libor update: 0.275% 3 mos., 0.423% 6 mos. Foreign bond yields slightly lower after being hit hard yesterday ex-Japan, Greece plunging again!!!: Germany 1.35% -1; UK 1.87% -1; France 1.92% -2, Italy 3.96% -1; Spain 4.28% -1; Portugal 5.39% -1; Greece 9.12%!!! -35!!! vs 9.44% vs 9.43% vs 9.44% vs 9.53% (recent range now 9.12%!!!-12.57%!). Japan 0.85% +11!!!  

Gold closed slightly lower for a second day at $1434.30 -$2.30, on an ‘inside’ session with a very narrow range. Last Friday’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: $1506-1521 – still falling! Overnight it is weak again at $1426.20 -$8.10 with a session low of $1419.70. Crude also had a narrow inside day and closed lower at $95.17 -.87, 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 ($93.30), 50 day ($93.01) and 200 day ($92.10). Overnight it is $94.85 -.32.  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:

We have become a country that is horribly conflicted. Everything is politicized. It is ‘he said, she said’ from Benghazi to the IRS scandal (note the IRS Commissioner is serving on an interim basis since the Senate is again stonewalling all nominations…note he was appointed however in 2008 by Bush!…and we can now add Justice Dept. on phone taps – in the name of national security.

All of this at a time when the economy is flailing and government is hamstrung by a minority in the House who refuse any and all revenue increases and are once again threatening on the debt ceiling. “We have a deal” is becoming a phrase of defeat as there are no ‘deal’s only angst and outrage. Where is ‘our’ collective outrage at our overpaid, unpopular government?

Have a great day!



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