7/5/13…it’s a wonderful day in the neighborhood

From The Friars Club Encyclopedia of Jokes: “If the Japanese are such technological giants, why do they still eat with sticks?” …ah, but the patents are mostly American!

Bloomberg Quotes of the Day: “I am patient with stupidity but not with those who are proud of it.”  – Edith Sitwell…sounds like a ‘wing’ of one of our political parties, no? and

“The test of  good manners is to be patient with the bad ones.” – Solomon Ibn Gabriel

Bloomberg Top Stories: 

***U.S. Payrolls Climb More-Than-Forecast 195,000; Jobless Rate Steady at 7.6%

*Dollar Strengthens With U.S. Futures Before Jobs Report While Metals Fall

*Payroll Gains in U.S. Probably Sustained as Employers’ Confidence Improved

*German Factory Orders Unexpectedly Drop as Euro Area Struggles to Recover

*Draghi to Carney Seek Independence Day Break From Bernanke Tapering Signal – !!!

*China Suspends Industry PMI Details in New Hurdle for Scrutiny of Economy

*Basel Regulators Weigh Pushing Banks to Admit Realistic Investment Losses – DUH!

*Justice Department Mounts Test Case About Chapter 11 Fiction – do tell!

*Too Few Roads Leading to China Tells the Tale of Mongolia’s Trade Concern

*Egypt’s Military-Appointed Government Girds for Brotherhood-Led Protests

*San Francisco Transit Workers Will End Strike as Contract Talks Continue

 

U.S. Non-Farm Payrolls rose by 195k in June beating the median estimate of 165K, Additionally, April and May were upward revised by a combined 70k. Retailers, and services added jobs while manufacturers reduced payrolls by 6k and have cut jobs for four straight months! Construction add 13k workers…considered strong but…  

The Unemployment Rate was unchanged at 7.6%…finally average hourly earnings rose by 0.4% to $24.01 in June. Still up just 2.2% over the past 12-months. Meanwhile the ‘underemployment rate’ including discouraged workers and those who are working part-time but want full time employment rose to 14.3% – a four month high! Is that a good sign? Not in TB’s book. Conclusion: more low-paying, no benefits jobs – Fed on hold!

Market Reaction 9am EDT: bonds more than double their early losses led by the 30-year TIP, 1.39% – 3 points! The 10-year is now 2.68% -1-1/2, 30 yr 3.64% -2-3/8! Stock futures added to earlier gains and are up about a third more on the session. Gold continues to plunge and is now off $28 at $1223.90! Crude is now $102.05 +.81. The Dollar Index is STRONG!!!  Should make for an exciting day…winners and losers!

 

Yesterday while we were busy setting off fireworks, Europe and Asia staged a strong rally (details follow)…overnight it continues in Asia along with U.S. Futures (also shown below with yesterday’s changes…yes U.S. Futures markets were open – see section following Thursday’s U.S. market summary

A very mixed day without much movement on the LOWEST volume of 2013 as traders and money managers headed out for the July 4th weekend…Friday will likely be very light. Note that on Tuesday stocks started weak and ended slightly positive while on Wednesday they started weak and ended mixed but little changed…attribute that to position squaring by those short from Wednesday. Nothing else worthy of comment!

…here you go:

* Dow 30 +0.4% vs -0.3% vs +0.4% vs -0.8% vs +0.8% vs +1%; Dow Transports –0.3% vs 0.5% vs +1.1% vs -0.4% vs +0.8% vs +0.8%; Russell 2000 +0.2% vs flat vs +1.3% vs -0.3% vs +1.1% vs +0.3% vs +1.1%; Dow Utilities -0.2% vs +0.1% vs -1.3% vs +0.6% vs -1.3%!!! vs +1.4%; S&P 500 +0.1% vs -0.1% vs +0.5% vs -0.4% vs +0.6% vs +1%; Nasdaq Composite +0.3% vs flat vs +0.9% vs flat vs +0.8% vs +0.9%; NDQ 100 +0.2% vs +0.1% vs +0.6% vs +0.1% vs +0.5% vs +1%.

*NYSE Volume plunged to a 2013 LOW of 1.96B shares from a weak 3.25B shares from 3.08B vs 4.4B vs 3.31B vs 3.54B (2.91B is the 2nd lowest of 2013, 2.75B is the 2013 low). REAL NYSE Volume ALSO plunged to 482M shares – a new 2013 low vs a slightly below average 717M vs 714M (lowest since 6/20) from a strong 1.75B vs 738M vs794M (595M is lowest since 5/24). Since 6/20 the average slipped to a still strong 1B shares. The 12-month average is 722M shares. The range for 2013 is now 482M to 2.01B. 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 85 have been up and 31 down…there have been 24 mixed sessions.

*New 52 week highs have ranged from 33-864. They were halved to 165 vs 305 vs 423 vs 251 vs 234 vs 165. New lows were steady at 64 vs 61 vs 33 (a new recent low!) vs 87 vs 92

  1. Advance/Declines were mixed: -1.5% vs -1.6x vs +2.5x vs +1.1x vs +4.3x (recent range -17.5x to +4.4x) on NYSE and +1.3x vs -1.1x vs +2.4x vs +1.1x vs +3.5x! (recent -3.5x to +3x). Breadth was similar: -1.1x vs -1.6x vs +2.3x vs -1.3x vs +2.8x vs +6.6x!(recent -18.6x!!! to +6.4x!!!) on NYSE and +1.4x vs -1.2x vs +2.1x vs -1.1x vs +2.7x vs +2.6x (recent -12.8x to +6.2x)  
  2. NYSE Financials slipped by another 0.3% vs -0.2% vs +0.7% vs -0.5% vs +1.1% vs +0.9%; Brokers +0.2% vs -0.2% vs +1.7% vs -0.7% vs +0.9% vs +0.4%; KBW Banks flat vs +0.6% vs +0.9% vs -0.1% vs +0.9% vs +1.1%; Nasdaq Banks +0.3% vs +0.7% vs +1.7% vs +0.2% vs +1.7%! vs -0.4%. BofA 4th most active: -0.5% vs -0.2% vs +0.5% vs +0.7% vs +3%!!! vs -3.1%!!! remains BELOW $13 at $12.83 -.07. It is now down 3.3% since 6/18.
  3. Volatility (S&P VIX) declined slightly and remains elevated at 16.20 -.24 with a range of 15.98-16.93. 6/25’s session high of 21.91 was 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!

Asian equities strong, ex-Korean; Europe little changed overnight. Global equities were very STRONG on Thursday ex-Japan: UK +0.3% vs +2.7%!!! vs -1.7%!; France +0.1% vs +2.2%! vs -1.8%!; Germany +0.1% vs +1.9% vs -1.7%! vs -1.2%!!!; Japan +2.1% vs DOWN 0.3%! vs -0.3% vs +1.8%!!! vs +1.3%; Hang Seng +1.9% vs +1.6% vs -2.5%!!! vs -0.7% vs +1.8%; Korea -0.3% vs +0.8% vs -1.6%!; India +0.4% vs +1.2% vs -1.5% vs -0.6%. U.S. equity futures strong and in top half of a broad range – second figure is where they were at this time on the Fourth….they closed near those levels: DOW +122 vs +111; SPX +12.60 vs +12.10; NDQ 24.50 vs +24.25.

Bonds failed to hold their early gains on Thursday and closed weaker…overnight they are taking a beating again: 10 yr Treasury 2.57% -1/2 vs 2.50% (recent range 2.62% to 1.63%!!!), and the 30 yr range is 3.60%!!! to 2.82%, currently 3.54% -13/16 vs 3.49%. The long TIP was recovering  but was hit the hardest overnight and is now 1.31% -1-1/4!!! vs 1.26% – again the weakest link since a new (record?) low of 0.36% on 4/5. Recent high 1.53%! Libor update: 0.270% 3 mos, 0.410% 6 mos, dropping sharply and now very close to the Jan. 2010 record lows (0.245% and 0.382% respectively). Foreign bond yields mixed vs lower yields on Thursday (morning prices not closing! –ex Greece: Germany  1.67% +2 vs 1.62% -4; UK 2.44% +6 vs 2.35% -4; France 2.25%!!! -1 vs 2.35% -4, Italy 4.38% -1 vs 4.39% -11; Spain 4.60% -2 vs 4.62% -13; Portugal 6.73% -32!!! vs 6.97% vs 7.67% vs 6.38%; Greece 10.85% -37!!! vs 11.22% +12 vs 11.12% vs 10.762%. Recent range: 8.04% to 12.57%.  Japan 0.85% unchanged for two days. You can call this investing – TB calls it gambling…not even speculation…you cannot trade that way…rationally!

Gold had a small positive gain on Wednesday closing at $1251.90 +8.50 on a nothing day. On Thursday, in Europe, it closed at $1243.40 -$12.30 with a session high of $1267 – contrast to last Friday’s intraday low of $1179.40 – lowest since at least 2011 and now critical support. First res is $1348.30, the 6/19 low! Major res is the 40 day/50 day: $1362-1381…both still plunging, and the 200 day – $1596!!! WEAKER overnight at $1236.60 -$15.30 – o/n high is $1257.10. Crude closed sharply higher for a THIRD straight session on Thursday at $101.24.+$1.64 two days after a ‘key reversal’ with a session high of $99.87, not seen since 2/1/13!. The range since May is $91.26 – $99.87 (highest since 9/17/12)! It is well above the 40/50 day m/a’s (95.66/95.30), while the 200 day ($92.31), remains as support. Overnight it is $101.76 +.52 with a session high of $102.19 – a double top from Wednesday!  4/18’s low of $85.61 was lowest since 12/11! The range is NOW $85.61-$102.19 since June 29, 2012.

Some random thoughts:

The payrolls data an accompanying stock market gains should provide a continuation to the ever-widening wealth gap…and who is benefitting the most? Bankers…the very ones who created the financial crisis. How does it feel to be a chump??? Just askin’.

Have a great weekend…hope your Fourth was as fun as TB’s was!!!

TB

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