8/5/13…to the GOP: it’s later than you think!

From The Friars Club Encyclopedia of Jokes: “A guilty conscience is the mother of invention.” – Carolyn Wells

Bloomberg Quotes of the Day: “Children learn to smile from their parents.” – Shinichi Suzuki…is that how Paul Ryan’s parents smile??? TB

Labor market trends are slowly improving with modest gains in nonfarm payroll employment. Moreover, the unemployment rate dropped as the participation rate slipped.  GDP growth accelerated in Q2, however, real consumer spending growth weakened compared to Q1. Meanwhile, consumer confidence, durable goods, factory orders and new home sales rose while construction spending and motor vehicle sales fell. Inflation remains subdued. Next week’s economic calendar is fairly light. The highlight of the week will be the July ISM Non-Manufacturing Survey (Monday). We will also get June International Trade and June Job Openings (Tuesday), June Consumer Credit (Wednesday) and June Wholesale Trade (Friday). Courtesy of Economic Advisory Service.

Bloomberg Top Stories:

*Treasuries Proving Safer Than AAA Sovereigns Two Years After S&P Downgrade – !

*Stocks Rise in Europe for Sixth Day as Oil Drops; U.S. Milk Futures Gain

*HSBC Falls After Missing Profit Estimates as Gulliver Says Growth Slowing – !!!

*U.K. Services Accelerate More Than Forecast to Fastest Pace in Six Years – ?!?

*Tourre Case Buoys SEC’s Enforcement Credentials as Congress Weighs Funding – oh yeah…they nailed a ‘lieutenant’ …what about the BIG DOGS: Blankfein and Co.?

*No Detroit Fallout Across U.S. as General Obligations Rally – what about pensions?

*Topix Best Friend Seen in Bernanke’s Taper as Abe-Inspired 66% rally

*Zimbabwe Stocks Tumble by Most Since 2009 After Mugabe’s Election Victory

*Swiss Housing Market Risks Continued Increase in Second Quarter, UBS Says

*Rusal Says Aluminum Premiums Poised  to Stay High as LME Tackles Backlog

*Hidden New Hampshire Billionaire Cohen Delivers Fortune in Unmarked Trucks

*Tale of Bond Salesman Who Wasn’t Reveals RBS Human Error at Several Levels

*Al-Qaeda Terrorism Threat Extends Closure of Some U.S. Embassies by a Week

*Turkish Court Imprisons Army Chief With Dozens of Generals on Coup Charges

*Assad Rules Out Political Solution to Syrian Civil War Seeking to Oust Him

 

A rally for the wrong reasons…worse it was yet another ‘low volume’ rally that only had momentum due to the payrolls report which, following Thursday’s strong rally, created some big trading opportunities.

The Nasdaq 100 was best performer at +0.6%, gaining 17 points…all of which was contained in just SEVEN stocks which gained more than one point: APPL +4.8 vs +3.6; QCOM +2.2; VIAB +1.9, and BIIB/MSFT/CSCO/FOXB/BIDU/DELL. There were no loser of one or more points. Note that gainers beat losers by just 1.1:1!

The VIX trading range slumped to 11.98-12.74 – a new recent low and it closed AT the low, down 0.96! A/D’s were barely changed and mixed while Breadth was slightly positive (Nasdaq best at +1.6x)..

…here’s the book:

* Dow 30 +0.2% vs +0.8% vs -0.1% vs flat vs -0.2% vs +0.5%; Dow Transports DOWN 0.3% vs +3.3%!!! vs +0.6% vs +0.3% vs -1.1%!!!; Russell 2000 FLAT vs +1.4%! vs +0.3% vs +0.3% vs -0.8%; Dow Utilities -0.1% vs +1% vs -0.7% vs +0.3% vs +0.3%; S&P 500 +0.2% vs +1.3% vs flat vs flat vs -0.4%. Nasdaq Composite +0.4% vs +1.4% vs +0.3% vs +0.5% vs -0.4%; NDQ 100 +0.6% vs +1.2% vs +0.2% vs +0.5% vs -0.2%.

*NYSE Volume slumped to a below average 3.13B shares from an average 3.78B vs 3.81B vs 3.31B vs 2.82B vs 2.74B vs 3.31B vs 3.07B vs 2.42B (3rd weakest of 2013…1.96B is the lowest of 2013). REAL NYSE Volume fell sharply to a below average 678M shares vs 798M vs 904M vs 678M vs 579M vs 596M (562M is lowest since 7/3). The 12-month average is 715M shares. The average since 6/30 is now 685M shares, ranging from 482M to 906M, 482M being the 2013 low! There have been just SEVEN 1B+ share sessions! There have been 30 800M+ shares in 2013: 12 up, 17 down, and one mixed, but on trades of less than that 92 have been up and 35 down …there have now been 30 mixed sessions.

*New 52 week highs have ranged from 33-864. They plunged again to 458 vs 730 vs 307 vs 257 vs 209. New lows also declined to 80 vs 108 vs 111 vs 69 vs 76 – 27 is the low.  

  1. Advance/Declines were nearly unchanged: +1.1x vs +1.6x vs +1.1x vs +1.1x vs -2.2x (recent range -17.5x to +4.4x) on NYSE and -1.1x vs +2.6x vs +1.2x vs +1.1x vs -2.2x (recent -3.5x to +3x). Breadth was similar but Nasdaq higher: +1.1x vs +3.3x vs +1.2x vs -1.1x vs +2.8x (recent -18.6x!!! to +6.9x!!!) on NYSE and +1.6x vs +3.2x! vs +1.1x vs +2.2x vs -1.6x (recent -12.8x to +6.2x)  
  2. NYSE Financials were slightly higher for only the 2nd  time in six sessions by +0.2% vs +1.5% vs -0.2% vs -0.3% vs -0.7%. BofA was most active but fell 0.2% after rising 2.4%, closing at $14.84 -.11 after hitting $15.03 7 days ago – highest since Jan. 14 and now major res. Brokers +0.2% vs +2% vs +0.5% vs -0.1% vs -0.9%; KBW Banks -0.1% vs +1.9% vs +0.5% vs +0.1% vs -0.9%; Nasdaq Banks -0.2% vs +1.8% vs +0.1% vs flat vs -1%! vs -0.5% USB +03% and a new high…so did GS/MS and UBS which rose 2.3%???.  
  3. Volatility (S&P VIX) declined again to 11.98 -.96 with a new lower range of 11.98-12.74 with last Tuesday’s high being 14.14!!!  This takes out 12.07 as the lowest since April 12th! VIX peaked at 20.49, plunged to 18.90 on June options expiry then closed at 20.11 on 6/24 and has been down below 14 since! 6/24’s session high of 21.91 was highest since 12/31/12 (22.72)!!! The range since April ‘12 is 11.05 (multi-year low o n 3/14/13) to 21.9. It is well below the 40/50 day (15.65/15.34) and the 200 day (14.95)!!!…ytd the range is 11.05 (3/14) to 21.92 (6/24)!

Global stocks mixed and little changed ex-Japan: UK -0.4% vs -0.2% vs +0.1% vs +0.7% vs +0.3%; France +0.1% vs flat vs +0.5% vs -0.4% vs +0.5%; Germany -0.2% vs +0.1% vs +1.2% vs -0.4% vs +0.4%; Japan -1.4%!!! vs +3.3%!!! vs +2.5%!!! vs -1.5%! vs +1.5%! vs -3.3%!!! vs -3%!!! vs -1.1%!;  Hang Seng +0.1% vs +0.5% vs +0.9% vs -0.3% vs +0.5%; Korea -0.4% vs +0.1% vs +0.4% vs -0.2% vs +0.9%; India +0.1% vs -0.8% vs -0.2% vs flat vs -1.3%. U.S. equity futures slightly weaker in what has become the norm – a very narrow trading range: DOW -21; SPX -2.70; NDQ -1.25.

Bonds had a big rally Friday – especially 10’s which rose 1 point while the 30 yr rose 1-1/8, and the long TIP also a point – all back in lower half of old trading range, but slightly weaker overnight: 10 yr Treasury 2.63% -5/16 (recent range 2.74% to 1.63%!!!), and the 30 yr range of 2.82% to 3.77%, currently 3.72% -9/16. The long TIP is 1.35% -5/8. The (record?) low of 0.36% was set on 4/5. Recent high 1.53%! Libor update: 0.265% 3 mos, 0.396% 6 mos. Both remain near the Jan. 2010 record lows (0.245% and 0.382% respectively). Foreign bond yields modestly higher across the board – ex Japan – after a nice rally following Friday’s U.S. payrolls: Germany 1.67% +2; UK 2.45% +3; France 2.23% +4, Italy 4.25% +1; Spain 4.56% +1; Portugal 6.44% +1; Greece 9.65% +4 vs 9.69% vs 9.64% -18!!! vs 9.80% vs 9.79% vs 9.81% vs 9.81% -10 vs 9.91% vs 10.02% +19 vs 9.81% vs 9.95% +17 vs 9.86% vs -13 vs 9.93% vs 10.07% vs 10.02% -16!!! vs 10.27% -19!!! vs 10.33% -25!!! vs 10.69% vs 10.85% +28!!! vs 10.52% vs 10.54% +40!!! vs 10.85% -37!!! vs 11.22%. Recent range: 8.04% to 12.57%.  Japan 0.77% DOWN 4.

Gold closed slightly lower for a second session but remains above the critical $1300 closing at $1310.50 -.70. 7/23’s session high was $1349.20 – highest since 6/20! 6/27’s intraday low was $1179.40 – lowest since at least 2011 and now critical support. $1300 remains psychological support, and it remains between the 40 day $1305 and the 50 day $1324 – both still falling. lt is way below, the 200 day – $1548!!! Overnight it is weaker but $1300 has held…so far. Friday’s low was $1282.40 – lowest and first time below $1300 since 7/19!!! It is currently $1305.80 -$4.70. Crude also closed lower at $106.94 -.95 – following Tuesday’s session low of $102.67. It remains above the 40/50 day m/a’s (101.47/99.92), both rising. The 200 day ($93.79) is distant support. MAJOR SUP is $104.21 -36 – a triple bottom from 7/10-7/12….it traded below it for five straight sessions before rallying last Weds. 4/18’s low of $85.61 was lowest since 12/11! It is weaker overnight at $106.06 -.88. The high of $108.93 on 7/19! The range is $85.61-$109.32 since March 1, 2012.

Some random thoughts:

Hope you got out on Friday – like the big traders did – why waste a nice day? One has to wonder what on earth is keeping both the Dow and S&P at those record highs…it sure isn’t fundamentals.

It will still take FIVE years at the current employment levels to get us back to early 2008, but that is only a smidgeon of the problem: full time with benefits jobs have DECLINED while part-time/no benefits jobs are on the rise with many people holding two jobs just to make ends meet…or at least get close. Meanwhile, business…and the Grand Obstructionist Party continue to fight an increase in the minimum wage. Isn’t that simply amazing? By keeping wages down, increasing hours and adding machines they are increasing productivity – but at what cost to the economy…and our society? The Wealth Gap continues to soar…led by CEO compensation…ask yourself this: how long can this continue?

What is wrong with the GOP? Have they gone mad? The former ‘party of Lincoln’ would have him turning over in his grave…he died for this??? Shut it down is the watchword but unlike the Newtster, there is no cohesive plan…just cut spending and taxes…what a ship of fools!  Today TB will focus on two points which show what the true Tea Party agenda…as defined by the Koch brothers…two of the greediest men on the planet!

First, they are willing to shut down the entire government just to stop Obamacare. They say they want to repeal and reform it. If they get their way though it will disappear and you can be there will be NO new legislation…this from what was originally a GOP idea until the Dems seized on it.  We are a disgrace as a nation…the only industrialized nation that doesn’t take care of its citizens…what ever happened to life, liberty, and the pursuit of happiness? Doesn’t health fall within those categories? Here are the problems: health insurance must be regulated at the federal NOT the state level, doctors fees and hospital costs must be contained (you can go to Brussels and get hip replacement for a fraction of the cost here…and they have less complications…some insurers are even paying for people to do just that!). Then we have to take control of prescription drugs in two ways: first, let Medicare negotiate prices and stop advertisements (again) on TV for prescription drugs which would reduce the people going to the doctor and putting pressure on them to prescribe something they don’t need…yet we all pay for!

Second, is immigration…the GOP ‘path to citizenship’ is a really bad joke. First, those living here (who have been paying social security by the way), must pay back taxes, and then…and only then…can they go to the back of the line and apply for citizenship? In other words: no way, Jose! It ain’t gonna happen…which suits them just fine.

This is a party bent on self-destruction and for what? They took a moderate, Mitt Romney who had created a state health program and made him run as an unelectable conservative. You have to wonder at the mentality of the ‘leaders’ of the party…especially when respected members of the party are mocked…like McCain, even Graham, McConnell and others…have they gone  mad???

Not telling you what to think or believe…TB has never, and never will, do that! But you had better decide what is best for the future of this country and you had better do it fast.

…it’s later than you think…thanks for that Charles Dickens (and so much more).

TB

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