9/11/13…remembering a second ‘day of infamy’

Bloomberg Quote of the Day: “Show me a hero and I will write you a tragedy.” – F. Scott Fitzgerald…how tragic a commentary! TB

Bloomberg Top Stories:

*Verizon Pays a Premium to Top Apple’s in Record $45 Billion Bond Offering

*Jobless Rate in U.K. Unexpectedly Drops to 7.7% in Step Toward BOE Target

*Stocks in Europe Advance as Pound Rallies on Jobs Report; Oil Erases Gains

*Apple’s IPhone Models Reflect Shift Under Cook to Emulator From Pioneer

*Lehman Recovery Seen as Justifying $2 Billion Bankruptcy Tab Five Years On

*Norway Pledges to Limit Oil Spending as Inflation Shock Rocks Krone Market

*BRICS’ $100 Billion Emergency Fund Recalls Useless Asian IMF Alternative

*NIH Seeking Boomers Helps Counter Trend of Longest U.S. Unemployment

*Fraud Stealing $100 Million in Claims Shows Flaws in U.S. Crop Insurance

*Obama Delaying Decision on Syria Military Strike Avoids Fight in Congress

*Spitzer Fails in Comeback Bid as Stringer Wins Primary for NYC Comptroller

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 +0.9% vs -0.1% vs flat vs +0.7%; Dow Transports +1.9% vs +1.4% vs -0.2% vs +0.6% vs +1.2%; Russell 2000 +0.9% vs +1.6% vs flat vs +0.3% vs +1.1%; Dow Utilities +0.8% vs +0.5% vs +0.6% vs -0.3% vs -0.2% vs -1%!; S&P 500 +0.7% vs +1% vs flat vs +0.1% vs +0.8%; Nasdaq Composite +0.6% vs +1.3% flat vs +0.3% vs +1%; NDQ 100 +0.5% vs +1.2% vs flat +0.2% vs +1%.

*NYSE Volume surged to an above average 3.46B shares vs 3B vs 2.1B vs 2.9B vs 3.3B vs 3.7B (2.52B is 4th weakest of 20131.96B is the low). REAL NYSE Volume rose above700M again to 773M shares vs 638M 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 429 vs 309 vs 227 vs 158 vs 136. New lows rose to 65 vs 49 vs 87 vs 60 vs 99 – 579-27 is the recent range.  

  1. Advance/Declines were positive agaiu: +1.8x vs +4x vs n/a vs -1.1x vs +2.5x; (recent range -17.5x to +4.4x) on NYSE and +2x vs +3.1x vs n/a vs +1.5x vs +1.9x (recent -3.5x to +3.8x). Breadth was similar: +2.5x vs +6.4x! vs n/a vs +1.8x vs +3.5x (recent -18.6x!!! to +6.9x!!!) on NYSE and +2x vs +6.5x!!! vs n/a vs +3x vs +3.2x (recent now -12.8x to +6.5x)  
  2. NYSE Financials rose by 1.1% vs +1.6% vs +0.2% vs +0.4% vs +0.9% vs +1.1%. BofA most active +1.1% vs +0.8% vs +0.1% vs +0.4% vs +0.5%, closing at $14.64 +.16. It has struggled since hitting $15.03 a month ago – highest since Jan. 14 and major res. Brokers +1.5% vs +1.5% vs n/a vs +0.7% vs +1.6%; KBW Banks +1% vs +0.7% +0.7% vs flat vs +0.7%; Nasdaq Banks +0.7% vs +0.7% vs n/a vs +0.7% vs +0.3%.  
  3. Volatility (S&P VIX) plunged breaking 15 to 14.53 – 1.10! 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 mixed: UK -0.1% vs +0.9% vs n/a vs +0.1% vs +0.6%; France -0.1% vs +1.6% vs n/a vs +0.1% vs  vs +0.6%; Germany +0.5% vs +1.9% vs n/a vs +0.1% vs +0.3%; Japan flat vs +1.5% vs n/a vs -1.5% vs +0.1%; Hang Seng -0.2% vs +1% vs n/a vs +0.1% vs +1.2%; Korea +0.5% vs +1% vs n/a vs +0.2% vs +1%; India flat vs +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 little changed in a very narrow trading range: DOW +4; SPX -2.10; NDQ -15.75!!

Bonds lost ground again yesterday after attempting to rally, but are up slightly overnight: 10 yr Treasury 2.94% +1/4 (recent range now 2.99% to 1.63%!!!), and the 30 yr range 2.67% to 3.90%, now 3.87% +3/8. The long TIP is now 1.57% +1/2. The (record?) low of 0.36% was set on 4/5. Recent high yield: 1.63%! Libor update: 0.254% 3 mos, 0.386% 6 mos. Both remain near the Jan. 2010 record lows (0.245% and 0.382% respectively). Foreign bond yields lower ex-Portugal and Greece: Germany 2.05% -3; UK 3.00% -1; France 2.58% -4, Italy 4.51% -2; Spain 4.47% -3; Portugal 7.02% +4; Greece 10.03% +3 Look at some of its recent big moves: 10.05% -19; 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 0.72% -1.

Gold was hammered again closing at $1364.00 -22.70!!! Intraday low $1357.60! 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 ($1346) and the 50 day ($1328). The 200 day is at $1500. Overnight it is slightly weaker at $1362.50 -$1.50. Crude also closed sharply lower at $107.39 -$2.13 – two days after setting a rally high and close of $110.70 and $110.53 respectively – session low $106.39! It remains above the 40/50 day m/a’s (106.66/105.97), both rising. The 200 day ($96.39) 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 little changed at $107.53 $.14.

Some random thoughts:

FDR declared the unprovoked and unlawful Japanese attack on Pearl Harbor a ‘day of infamy.’ Worse yet, was the hijacking of three planes and killing of thousands of innocent people by a group of terrorists twelve years ago today.

The terrorists died in the crashes, we got Bin Laden after more than a decade of searching for him which resulted in our invasion of Afghanistan (just to get him, yet we are still there), and Iraq on trumped up charges of WMD. In so doing, we managed to upset the balance of power in the Middle East – Saddam was using his ‘bluff’ of chemical warfare to keep their archenemies, the Iranians, at bay and now we are paying for that and worse, the Iraqi people have become divided again and live in terror today. Ah, but we won.

A year ago Egypt overthrew our buddy Mubarak, replacing him democratically with a Muslim, one of whose first acts was to throw out the Constitution…we stayed out of it (as we had to do since he was elected democratically), and now are forced to ‘gingerly’ support the military coup in hope of a quick new election.

Syria is a growing problem, and, like Iraq stands to further upset the balance of power in the Middle East…and we have no idea of the consequences – for Israel, Jordan, or ourselves, if we intervene or remain out of the fray. If the insurgents win, we have no idea what will happen…will it be another Egypt?…or possibly worse???

This is the world we live in where our Congress is so divided it cannot do the peoples business and bonds and other income producing securities are being trashed while the stock market strives for new highs. Does that make sense? You decide.

Have a great day!

TB

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