7/1/13…a new quarter!…a new rally? Stocks? Bonds? Gold? All of the above?

From The Friars Club Encyclopedia of Jokes: “I used up all my sick days so I am calling in dead.” – unattributed.

Bloomberg Quote of the Day: “Patience is bitter, but its fruit is sweet.”

– Jean-Jacques Rousseau

This week’s economic calendar is packed with important indicators. The highlight of the week will be the June ISM Manufacturing Survey (Monday) and June Employment Situation (Friday). We also get May Construction Spending (Monday), May Factory Orders and June Motor Vehicle Sales (Tuesday), May ADP Employment, May International Trade and June ISM Non-Manufacturing Survey (Wednesday).Courtesy of Economics Advisory Seervice.

Bloomberg Top Stories:

*FBI Accuses 13 Investment Banks of Colluding to Restrict CDS Competition

*Stocks Rise With Futures as Metals Lead Commodities Higher; Yen Rises

*Simons Strategy to Shield Renaissance Profit From Taxes Draws IRS Scrutiny

*Citigroup Will Pay Fannie Mae $968 Million Over Faulty 2010-2012 Mortgages-Guilt?

*U.K. Factory Index Increases to Two-Year High as Mortgage Approvals Jump

*M&A Droops as Stock Market Rally Fails to Ignite Revival Bankers Predicted

*BlackBerry Faithful Waver After Z10 Smartphone Flop Hobbles Comeback

*Brothers Arrested in Bungled U.K. Probe Say Revenge Is Worth $457 Million

*Protestors Storm Cairo Muslim Brotherhood Offices as Death Toll Reaches 12

*Obama’s Reluctant Mideast Role Tested by Turmoil From Unrest to Civil War

*Arizona Wildfire Kills 19 Firefighters in Worst U.S. Incident in 30 Years – very sad!

*Report of U.S. Bugging of EU Allies Dogs Kerry at Southeast Asia Summit

*Kerry Hails China Call for North Korea to Abandon Nuclear Weapons Program – !!!    

 

Since TB was on the road Thursday, suffice it to day it was a second straight up day – although generally smaller in magnitude with major indices up 0.5% (NDQ 100) to +1.7% (Russell 2000), A second straight up day and again on low and declining volume for total NYSE stocks, and the lowest floor-traded volume since June 18th  – still it was slightly above the 12 month moving average. The VIX however plunged so a still elevated 16.86 -.35, A/D’s and Breadth were very positive and new 52 week highs rose while new lows declined to below 100 Gold suffered an $18.20 loss making the two day loss $73.70!!! Long treasuries rebounded for a second day  from a 22 month high of 3.63%!!! The low yield was 2.45% on 7/25/12.

Then came Friday – a down day on total NYSE Volume of 4.4B shares, highest since 6/24’s 4.7B shares while floor-trades shares soared to 1.75B shares. Since June 20th tha average volume has been a whopping 1.16B shares with a low of 737M – 12-month average is 722M shares! The only real winner was the tortured Dow Utilities +0.6%. both Nasdaq indices were flat and the Dow was worst performing sector, -0.8% followed by NYSE Financials -0.5% and the S&P 500/Dow Transports -0.4%.

New 52 week highs and lows were little changed at 251 and 87 respectively. How about this: the VIX was unchanged at 16.86 – the range since 6/24 is 21.91 to 16.19 (6/28). A/D’s and Breadth were mixed and little changed.  Gold managed  a $12 gain to just $1223.70, while Crude closed at $96.56 -.49 in uneventful trading. Treasuries inched their way higher but remain very weak.

The Nasdaq 100 rose just 2.8 points (+0.11%) by 1:1 with four stocks rising from 1-2.9 points (CMCSA +2.9; AAPL +1.9; BIIB +1.3; ORCL +1.1) and CSCO losing 1.5 points. SEVEN stocks led by the beaten up MSFT (+5.2) gained more than one point for a combined total of 16 of those points. AAPL? Don’t ask! It was the only member losing more than one point – a shocking 3.7 – this from the stock who provided most of the S&P gains in 2011 and the first three quarters of 2012 before falling from grace.

NYSE Financials fell by 0.5% with BAC 2nd most active NYSE stock declining by 1.2%. Brokers were off 0.7%; KBW Banks -0.6% and Nasdaq Banks off just 0.1%1

…and away we go…:

* Dow 30 -0.8% vs +0.8% vs +1% vs +0.7% vs -0.9% vs +0.3% vs -2.3% vs -1.4%; Dow Transports -0.4% vs +0.8% vs +0.8% vs +1.9%!!! vs -2%!!! vs -0.5% vs -2.2%!!! vs -1.2% vs +1%; Russell 2000 -0.3% vs +1.1% vs +0.3% vs +1.1%! vs -1.3%! vs +0.3% vs -2.6%!!! vs -1.4%! vs +1.2%!; Dow Utilities +1.4%!!! vs flat vs +1.4%!!! vs +1.1%! vs -0.2% vs +1.3%!!! vs -2%! vs -2.3%!!!; S&P 500 -0.4% vs +0.6% vs +1% vs +1% vs -1.2% vs +0.3% vs -2.5%!!! vs -1.4%!; Nasdaq Composite flat vs +0.8% vs +0.9% vs +0.8% vs -1.1% vs -0.2% vs -2.3%!!! vs -1.1%!; NDQ 100 +0.1% vs +0.5% vs +1% vs +0.6% vs -1% vs -0.4% vs -2.3% vs -1.2%!

*NYSE Volume soared to 4.4B shares from a below average 3.31B vs 3.54B vs 3.63B vs 4.7B vs  5.51B vs 4.84B vs 3.54B vs 3.1B vs 3.08B vs 2.91B (2nd lowest of 2013, 2.75B is the 2013 low). REAL NYSE Volume also rose sharply to a strong 1.75B shares from an average 738M vs794M vs 810M vs 968M vs 2.01B vs 1.07B vs 646M shares vs 679M (595M is lowest since 5/24). Since 6/20 the average is a strong 1.16B shares  with 738M being the lowest session! The 12-month average is 722M shares. The range since 2/11 is 558M to 2.01B eclipsing the 1.825B on 3/15’s options expiry. There have now been just SEVEN 1B+ share sessions! There have been 25 800M+ shares in 2013 – 8 up, 17 down, but on trades of less than that 84 have been up and 31 down…there have been 22 mixed sessions.

*New 52 week highs have ranged from 65-864. They are rising but below average at 251 vs 234 from a weak 165 vs 122 vs 76 vs 98 vs 65 vs 257 vs 345. New lows declined the last two sessions to 87 vs 92 vs 137 vs 248 vs 715!!! vs 438 vs 550 vs 143 vs 104 vs 62!!!. Recent range was 49-715.

  1. Advance/Declines were neutral vs solidly positive the prior three sessions: +1.1x vs +4.3x! vs +3.1x vs +4x! vs -6.5x! vs 1:1 vs -17.5x!!! vs -5.6x! (recent range -17.5x to +4.4x) on NYSE and +1.1x vs +3.5x! vs +1.2x vs +2.5x! vs -3.3x!!! vs +1.5x vs -2.6x vs +2.3x vs +1.8x (recent -3.5x to +3x). Breadth was slightly negative: -1.3x vs +2.8x vs +6.6x! vs -10x!!! vs -1.1x vs -18.6x!!! vs -11x!!! vs +3.8x!(recent -18.6x!!! to +6.4x!!!) on NYSE and -1.1x vs +2.7x vs +2.6x vs -2.6x vs -1.1x vs -11x vs -2.2x vs +3.1x vs +2.6x vs -2.3x (recent -12.8x to +6.2x)  
  2. NYSE Financials declined by 0.5% vs +1.1% vs +0.9% vs +1.8% vs -1.4% vs +0.1% vs -2.7% vs -1.6% vs 0.7%; Brokers -0.7% vs +0.9% vs +0.4% vs +1.5% vs -1% vs +0.2% vs -1.9% vs -0.9% vs +1% vs +2%; KBW Banks -0.1% vs +0.9% vs +1.1% vs  +0.9% vs +2.2%! vs -1.6%! vs +0.3% vs -1% vs -0.9%; Nasdaq Banks +0.2% vs +1.7%! vs -0.4% vs +0.9%! vs -0.5% vs -0.8% vs +1%. BofA 2nd most active: +0.7% vs +3%!!! vs -3.1%!!! vs -1.6% vs -2.3% vs -0.6%…. remains well BELOW $13 for a 4th day at $12.76 +.09. Last time below $13 was on 5/9 with a high of $13.83 on 5/30! It is now down 3.8% over the last six sessions….look at the others: JPM +0.8% vs +2.3% vs -5.9%! vs -4%; C +1.3% vs +3.4% vs -9.2%!!! vs -6.3!!!; USB flat vs +0.6% vs +2.3% vs flat vs +0.6%!; WFC +1.8% v +1.2% vs -2.5% vs +0.7%:  GS -1%! vs +1.5% vs -7.1%!!! vs -6%!; MS -0.6% vs +2.6% vs -2% vs -1%; UBS +0.6% vs +2.3% vs -1.5% vs -6.4%! – not even a dead cat bounce!!! The broker ‘banks’ (that’s what they are – broke’er) are still getting slammed: past nine sessions: GS -8%!; MS -4.3%!; UBS -2.8%. Told you financials were a bubble… Banks in trouble EXCEPT USBank – I don’t own it but dividend like WFC is improving!   
  3. Volatility (S&P VIX) plunged for a second session but remains elevated, falling sharply to 17.21 -1.26 vs 18.47 vs 20.11. 6/25’s session high of 21.91 highest since 12/31/12!!! The range since 4/12 is 11.99 (multi year low) to 21.92, way the 40/50 day (15.44/15.09) and the 200 day (15.04)…ytd the range is 11.05 (3/14) to 21.92 (6/24) – 12 mo. ave 15.35! Overnight VIX is falling again: 16.18 -.68!

Global equities higher: UK +1.5%; France +1.1%; Germany +0.5%; Japan +1.3%; Hang Seng +1.8%; Korea -0.4%. U.S. stocks up and near session highs: DOW +139; SPX +18; Composite +44; NDQ +33; Russell 2000 +11

Bonds gained somewhat for the past three sessions and were weaker overnight and now buck to about unchanged. Since peaking on April 5th the long TIP has still lost 23.5 points OR 22! CURRENTLY: 10 yr Treasury 2.49% -1/16 (recent range 2.62% to 1.63%!!!), and the 30 yr range is 3.60%!!! to 2.82%, currently 3.50% -1/16. The long TIP is off this morning again but after rallying from well below 1.5% it is now 1.29% -3/8 – still the weakest link since a new (record?) low of 0.36% on 4/5, 4 mo. ave 0.70%! Since the Bernanke announcement on May 7th the high yield has ranged from 0.82% set on 5/22 to 1.53%! Libor update: 0.273% 3 mos., 0.414%!!! 6 mos, still close to the Jan. 2010 record lows (0.245% and 0.382% respectively). Foreign bond yields mixed with Spain and Italy rallying: Germany 1.73% +1; UK 2.44% +1; France 2.33% -1, Italy 4.46% -8!!!; Spain 4.62% -13!!!; Portugal 6.27% -5!; Greece 10.62% +1. Recent range: 8.04% to 12.57%.   

Gold finally managed a ‘bounce’ – remains to be seen if it was a ‘dead cat’ one. It closed Friday at $1223.70 +$12.10 BUT with a new session low of $1179.40 – ouch!!! Lowest since at least 2011 Support? There is no known support from the panic selling but we may have put in ‘at least’ a near term low…or the base for a big rally – u pick ’em. Look at the 40 day/50 day: $1378-1391…both plunging, and the 200 day – $1604!!! Sharply higher again overnight but still well below the 6/25 close ($1274.80) at $1242.20 +$18.50 – high was $5 above that.Crude closed weaker at $96.56 -.89 but on a ‘higher high/higher low ‘ following Thursday’s spring to $97.05 +$1.55. The range last month was $91.26 – $99.01 (highest since 9/17/12)! It is well aabove  the 40/50 day m/a’s (95.47/94.87), while the 200 day ($92.29), remains CRITICAL support. Flying overnight at $97.97 +$1.41on an ‘outside day that could result in a positive key reversal! 4/18’s low of $85.61 was lowest since 12/11! The range is NOW $85.61-$98.18 since June 29, 2012.

Some random thoughts:

Running late but collecting return data for June, 2nd quarter, first half, and 12 mos.

Will try to  post later today. Looks like there was simply too much bearishness in stocks (especially income producing!) and bonds. Gold and Crude could be buys here….or  not!

Ciao,

TB

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