Today’s Quote from the Friars Club Encyclopedia of Jokes: “My superiority complex turned out to be an inferiority complex. I said, “great, that makes me the least of my problems.” – Sara B. Sirius…oops I wasn’t going to menition ‘Syria’s’
Bloomberg Quote of the Day: “A man’s homeland is wherever he prospers.” – Arostphranes…or is it? TB
Bloomberg Top Stories:
*Stocks Rise for Seventh Day on China Recovery as Bonds Fall; Oil, Yen Drop
*Bank of America Cuts Jobs as Mortgage Slump Ensnares JPMorgan, Wells Fargo
*Banks Seen at Risk Five Years After Lehman as Wall Street Beats Back Rules – just another reason to avoid the big bank/broker stocks!!! But they have rallied? Yee haw!
*Apple CEO Cook to Unveil Cheaper IPhone Seeking to Jump Start Asian Growth
*Verizon Jams Telecom Bonds With $50 Billion Debt Sale Plan for Mobile Unit
*Goldman Sachs, Visa, Nike to Join Dow Average as H-P, BofA, Alcoa Pulled – see how meaningless indices have become? Take out the losers…and BofA always most active!
*Porsche $845,000 Spyder Hybrid Beats Prius as Performance Goes Green – now get this straight…you can afford a near $1M car…but not the gas for it???
*Dollar-S&P 500 Correlation Turning Positive Shows Worst Over – but wait, FOMC, Debt Ceiling…oh yeah…it’s over all right!
*Shipping Rates Rising to 2010 High on Record Ore Cargoes to China – hmmm
*Taxpayer $14 Billion Paid to U.S. Crop Insurers Some Call Money Laundering
*France to Submit Syria Proposal to UN as Interfax Says Assad Accepts Plan
*Peres Skeptical Syria Would Give Up Chemical Stocks Under Russian Proposal –DUH!
Ah, another up day yesterday…how special! Friday was too…of sorts, following an incredibly bad payrolls report (revisions mostly resulting in a lack of job creation) while the participation rate trickled down to the lowest in decades! Makes you want to go out and buy stocks doesn’t it…any stock. Note this morning the bad news on banks, especially BofA…gosh, and financials have done so well…ah, but no worries…they have succeeded into turning Dodd-Frank into something good only for lighting a fire, not for protecting the U.S. taxpayer…they even eradicated the provision that required them to retain a 20% interest in any subprime loans that they sold off…ain’t that a kick??? Sooo, will report it but not with any interest (no pun intended):
* Dow 30 +0.9% vs -0.1% vs flat vs +0.7% vs +0.2%; Dow Transports +1.4% vs -0.2% vs +0.6% vs +1.2% vs +0.3%; Russell 2000 +1.6% vs flat vs +0.3% vs +1.1% vs +0.5%; Dow Utilities +0.5% vs +0.6% vs -0.3% vs -0.2% vs -1%!; S&P 500 +1% vs flat vs +0.1% vs +0.8% vs +0.4%; Nasdaq Composite +1.3% flat vs +0.3% vs +1% vs +0.4%; NDQ 100 +1.2% vs flat +0.2% vs +1% vs +0.6%.
*NYSE Volume is leveling out at 3B shares vs 2.1B vs a well below average 2.9B vs 3.3B vs 3.7B (2.52B is 4th weakest of 2013…1.96B is the low). REAL NYSE Volume HAD been above700M for 3 days but has been closer to 600M for three days now – including payrolls Friday! 638M shares vs 672M vs 630M vs 728M vs 787M vs 768M (482M on 7/3 in a shortened trading session is the low). The 12-month average is 719M shares. The range since 6/28’s 1.75B share day, excluding the four sessions above 800M, is 482M-798M shares. The average since 6/28 is just 666M shares, ranging from 482M to 906M. There have been just SEVEN 1B+ share sessions! There have been 31 800M+ shares in 2013: 12 up, 17 down, and two mixed.
*New 52 week highs have ranged from 33-864. They have been steadily climbing again to 309 vs 227 vs 158 vs 136. New lows dove to 49 vs 87 vs 60 vs 99 – 579-27 is the recent range.
- Advance/Declines were very positiv: +4x vs n/a vs -1.1x vs +2.5x vs +1.2x; (recent range -17.5x to +4.4x) on NYSE and +3.1x vs n/a vs +1.5x vs +1.9x vs +1.9x (recent -3.5x to +3.8x). Breadth was even stronger: +6.4x! vs n/a vs +1.8x vs +3.5x vs +2.1x (recent -18.6x!!! to +6.9x!!!) on NYSE and +6.5x!!! vs n/a vs +3x vs +3.2x vs +2.1x (recent now -12.8x to +6.5x)
- NYSE Financials rose by 1.6% vs +0.2% vs +0.4% vs +0.9% vs +1.1%. BofA back to most active +0.8% vs +0.1% vs +0.4% vs +0.5% vs +0.9%, closing at $14.47 +.12. It has struggled since hitting $15.03 a month ago – highest since Jan. 14 and major res. Brokers +1.5% vs n/a vs +0.7% vs +1.6%! vs +1.3%!; KBW Banks +0.7% +0.7% vs flat vs +0.7% vs +0.5%; Nasdaq Banks +0.7% vs n/a vs +0.7% vs +0.3% vs +0.7%.
- Volatility (S&P VIX) declined slightly and has been below 16 for four days at 15.63 – .29. A week ago Friday it closed at 17.01 but a week prior it was at 13.98. The recent range is now 11.83-17.81. It peaked at 22.79 on 12/28/12. It is above the 40 day (14.12), the 50 day (14.33) and the 50 day (14.58)…ytd the range is 11.05 (3/14) to 21.92 (6/24)!
Global stocks STRONG on China growth: UK +0.9% vs n/a vs +0.1% vs +0.6% vs -0.4%; France +1.6% vs n/a vs +0.1% vs vs +0.6% vs -0.8%; Germany +1.9%! vs n/a vs +0.1% vs +0.3% vs -0.5%; Japan +1.5% vs n/a vs -1.5% vs +0.1% vs +0.5%; Hang Seng +1% vs n/a vs +0.1% vs +1.2% vs -0.3%; Korea +1% vs n/a vs +0.2% vs +1% flat; India +3.8%!!! vs +1.5% vs +1.5% vs +2.2%!!! vs +1.8%!!!…well above the 200 day m/a! U.S. equity futures strong: DOW +83; SPX +10.10; NDQ +20.75!!
Bonds made modest gains on Friday after the rout and added to it slightly yesterday but are weak again overnight: 10 yr Treasury 2.95% -3/8 (recent range now 2.99% to 1.63%!!!), and the 30 yr range 2.67% to 3.88%, now 3.88% -7/16. The long TIP is now 1.60%. The (record?) low of 0.36% was set on 4/5. Recent high yield: 1.63%! Libor update: 0.255% 3 mos, 0.387% 6 mos. Both remain near the Jan. 2010 record lows (0.245% and 0.382% respectively). Foreign bond yields higher ex-Spain and Greece: Germany 2.03% +7; UK 3.03% +8; France 2.63% +7, Italy 4.53% +1; Spain 4.50% -3; Portugal 6.92% +2; Greece 10.05% -19!!! Look at some of its recent big moves: 10.03% +11; 9.75% +24!; 9.64% -18; 9.81% -10; 10.02% +19; 9.95% +17; 9.86% -13; 10.02% -16; 10.27% -1; 10.33% -25!; 10.85% +28!; 10.54% +40!!!; 10.85% -37!!!. Recent range: 8.04% to 12.57%. Japan 0.74% -1.
Gold closed little changed but very weak as it has been diving since last Wednesday, even ignoring a positive key reversal (higher high, lower low, close above the prior day’s high), closing at $1386.70 +0.20. 8/14’s session low was $1271.80 – lowest since 7/17! 6/27’s intraday low was $1179.40 – lowest since at least 2011 and critical support. $1300 is psychological support, but it is still above both the 40 day ($1344) and the 50 day ($1325). The 200 day is at $1502. Overnight it is sharply weaker at $1364.70 -$22.00!!! Crude closed sharply lower at $109.52 -$1.01 – a day after setting a rally high and close of $110.70 and $110.53 respectively – on another inside session? It remains above the 40/50 day m/a’s (106.62/105.75), both rising. The 200 day ($96.29) is distant support. 4/18’s low of $85.61 was lowest since 12/11! Major Res is the high the spike to $112.24 on 8/28. That move was immediately rejected! The range is $85.61-$112.24 since March 1, 2012. Overnight it is being hammered at $106.92 -$2.60!!! and is BELOW the 40 day m/a!!!
Some random thoughts:
Drove back from Duluth yesterday where TB attended his ship’s reunion (USS Ingersoll DD-652). Syria remains at the fore and this is the scariest situation – TB believes – since WWII. Why? Ultimatums…just as the allies threatened Hitler then succumbed and each time he became bolder. When a line has been crossed – not once but THREE times…and you take no offsetting action it not only defies the laws of physics but empowers your adversary. If we attack it will be hard to keep it limited…has very little support from NATO, etc., and what would it accomplish? Hell, we don’t even know if the insurgents are the good guys (or will remain the good guys after they win).
Once again we are stuck between a rock and a hard place as we attempt to invoke the same flawed policies that led to Viet Nam. You cannot preach democracy and then say ‘wait a minute’ that isn’t the kind of democracy WE wanted.
May you live in interesting times is a gross understatement…the future is now present!
Have a good week!