5/28/13…some post Memorial Day reflections

From the Friar’s Club Encyclopedia of Jokes: “You may not think much of what I have to say, but remember, it’s one six-billion-seven-hundred-millionth of the world’s opinion.”

Bloomberg Quote of the Day: “If you change the way you look at things, the things you look at change.” – Wayne Dyer

Bloomberg Top Stories:

*Stocks Climb Before U.S. Consumer Confidence Data as Treasuries, Yen Fall

*British Banks Eliminate 189,000 Jobs as Employment Sinks to Nine-Year Low – !!!

*Record Cash Pours Into U.S. Balanced Funds as Individuals Return to Stocks – historically they have lower returns and higher fees…good luck!

*Li Says China Targets 7% Annual Growth as Leaders Confront Slowing Demand

Labor market trends are improving due to the recent drop in jobless claims. Manufacturing activity contracted as indicated by the regional surveys, EmpireState and Philadelphia Fed. Industrial Production also fell in April. Retail sales and consumer sentiment rose, suggesting modest growth in consumption in Q2. The durable goods orders, leading indicators, as well as new and existing home sales rose, while housing starts fell.  Inflation remains subdued.

This week’s economic calendar is fairly light. We will get the March Case-Shiller Home Prices, May Consumer Confidence, May Richmond Fed Manufacturing Survey and May Dallas Fed Manufacturing Survey (Tuesday), GDP – Q1 2nd Estimate (Thursday), April Personal Income, May ISM Chicago Survey and May Consumer Sentiment Final (Friday). Courtesy of Economic Advisory Service

Friday’s pre-holiday trading set the tone for little change on extremely low volume ranging from a Dow that was up 0.1% to Dow Transports -0.5% but Dow Utilities took a bath falling 1.1%…they just can’t catch a break. Bonds which had an early close rose modestly but remain weak.

So let’s see what else happened:

* Dow 30 +0.1% vs –0.1% vs –0.5% vs +0.3% vs -0.1% vs +0.8%; Dow Transports -0.5% vs +0.2% vs -1.6%!!! vs +0.1% vs -0.1% vs +1.3%; Russell 2000 -0.1% vs +0.2% vs -1.7%!!! vs +0.1% vs +0.2% vs +1.1%; Dow Utilities -1.1%!!! vs -0.6%! vs -1.6%!!! vs +0.2% vs -0.6%; S&P 500 -0.1% vs -0.3% vs -0.8% vs +0.2% vs -0.1% vs +1%; Nasdaq Composite FLAT vs -0.1% vs -1.1%!!! vs +0.2% vs -0.1% vs +1%; NDQ 100 FLAT vs -0.3% vs -0.9%!!! vs +0.2% vs -0.1% vs +1%.

*NYSE Volume plunged in pre-holiday trading to a weak 2.75B shares 3.27B vs 4.32B vs 3.49B vs 3.27B, replacing 5/13’s 2.86B as the low for the year. REAL NYSE Volume also fell sharply to 587M shares vs 683M vs 855M vs 685M vs 683M vs 848M (highest since 4/30), vs 594M. Recent highs were 975M (selloff) to 887M (rally). The average last week was another weak 728M shares vs 726M vs 720M vs 687M vs 859M vs 689M!!! The 12-month average is just 722M 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 17 800M+ shares in 2013 – just 5 up, 12 down, but on trades of less than that 76 have been up and just 24 down…there have been 21 mixed sessions.

*new 52 week highs have ranged from 100-864. They PLUNGED Friday again (?) to 138!!! vs 811 vs  763 vs 649 vs 811 vs 726. New lows slipped to 49 vs 63 vs 41 vs 31 vs 63 vs 67 (recent range 29-237).

  1. Advance/Declines were mixed for a second day: -1.2% vs -1.4x vs -3.5x! vs +1.2x vs +1.3x vs +2.6x (recent range -7.1x to +4.4x) on NYSE and +1.1% vs +1.1x vs -2.9x! vs +1.2x vs -3.3x! vs +1.1x  (recent -3.5x to +3x). Breadth was similar: -1.5x vs -1.5x vs +1.6x vs -3.2x! vs +1.1x vs +1.6x (recent -10.5x to +6.4x!!!) on NYSE and +1.1x vs -1.1x vs +1.2x vs -3.3x! vs +1.6x vs +1.2x (recent -12.8x to +6.2x)  
  2. NYSE Financials fell 0.3% vs -1% vs +1.2% vs +0.1% vs +1.3% vs -0.8%. BofA was flat vs -0.8% vs -1% to $13.21 -.01, still…11th day above $13 since 4/11/11 – all this month!
  3. Volatility (S&P VIX) dropped to 13.99 -.13 from 14.12 which included an intraday high of 15.11(6th day above 13 since May 2). The range since 4/12 11.99 (multi year low) to 18.20, and it is back above the 40/50 day (13.37/13.61) with res at the 200 day (15.05)…ytd the range is 19.28 (2/25!) to 11.05 (3/14) – 12 mo. ave 16.10!

Global equities STRONG!: UK +1.8% vs -0.5% vs -1.7%! vs +0.2% vs +0.2%; France +1.5%! vs +0.2% vs -2.4%!!! vs-0.3% vs -0.1%; Germany +1.2% vs -0.5% vs -2.5% vs -0.1% vs -0.2%; Japan +1.2% vs +0.9% vs -7.3%!!! vs +1.6%! vs +0.1% vs +1.5% vs +2.3%; Hang Seng +1.1%! vs -0.2% vs -2.5%!!! vs -0.5% vs -0.5% vs +1.8%; Korea +0.3% vs +0.2% vs -1.2%! vs +0.6% vs -0.1%; India +0.7% vs +0.2% vs -1.9%! vs -0.3% vs -0.6%. U.S. stock futures and at session highs in another wide range session. DOW +116!, range 126 pts!; SPX +13.30; NDQ +27.75!

Bonds rallied on a shortened session on Friday but have given back all the gains and more overnight: 10 yr Treasury 2.05% -3/8 (recent range 2.06% to 1.63%!!!), and the 30 yr’s 3.26% to 2.82%!!!, now 3.21% -5/8. The long TIP is 0.80% -1/4 – still the weakest link since a new (record?) low of 0.36% on 4/5. Recent high yield is 0.82% set on 5/22! Libor update: 0.273% 3 mos., 0.415%!!! 6 mos. Foreign bond yields lower in all but industrial nations: Germany 1.46% +1; UK 1.92% +2; France 1.98% +2, Italy 4.01% -3; Spain 4.26% -5; Portugal 5.34% -10!!!; Greece 8.39% -27!!! vs 8.63% vs 8.54% vs 7.98% vs 7.97% vs 7.94% vs 7.96% vs 8.47% (recent range now 7.94%-12.57%). Japan 0.90% +8!!!  

Gold closed modestly lower on a second straight ‘inside’ day following an ‘outside’ session that had an intraday high of $1413.10! It has been down 9 of the last 11 sessions following 5/20’s intraday low of $1338, lowest since 4/18, at $1387.50 -$5.30. 5/10’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: $1456-1486 – falling rapidly now! Overnight it is down again to $1377.20-$10.30. Crude closed little changed for a 2nd session on a narrow inside session at $94.15 -.10. Thursday’s intraday low of  $92.21 was below the 200 day, a second test! This comes just 13 days after posting a new rally high of $97.17, nearing a 12 month high! It remains well above Sup/Res at the 40 day ($93.43), 50 day ($93.61) and 200 day ($92.30). Overnight it is stronger at $95.10 +.955 with a session high of $95.22. 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:

Memorial Day made me ask the question of how those who gave their lives for this country would feel with a government that cares more for the wealthiest and has no sympathy for those who suffered for the sins of the financial sector. They can’t even reason with one another.

I noticed one thing yesterday…the American Flag lapel pins are gone – why is that? Shouldn’t they still be wearing them but upside down? Guess you don’t have to wear one to show you are a true patriot…just call yourself one and scream at those who dared challenge the legitimacy of the names ‘patriot’ or ‘tea party.’ Can you tell me one thing you learned about the Constitution from their ads? …sorry, I meant one FACT! Don’t bother yourself with truth any longer…it is what you read on the internet or hear on the telly. I do not condone what the IRS did but when you get a flood of applications (thanks to a flawed Supreme Court decision that was purely political), it makes sense to ‘follow the money.’ BUT they could have done this in a formal way that would have not gotten them into this mess by looking at any new groups formed in an election year. This from a former IRS senior official. But the applications must have been running 10:1 or more from groups with the two names that were singled out. Hope they provide those stats!

I listened last night to Washington Post journalist Robert G. Kaiser, discuss his book, Act of Congress, which praises Congress on the passage of Dodd-Frank and goes into the details of how it came to be. Sadly, he failed to discuss in any way the stone-walling by the financial lobby and their continuing efforts to water it down.

Where are the whistleblowers? Oh they are out there and have already spoken…their pleas were ignored however…by Congress and the Justice Department.

Have a great holiday-shortened week!

TB

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