Today’s Quote from the Friars Club Encyclopedia of Jokes: “There are several ways to apportion the family income, all of them unsatisfactory.” – Robert Benchley
Bloomberg Quote of the Day: “What is yours is mine, and all mine is yours.” – Tiotus Maccius Plautus…or as we now say: what’s yours is mine and what’s mine is mine! TB
Bloomberg Top Stories:
*Yellen Backing Price Goal Shows Anti-Inflation Stance Belying Dove Image – proper!
*U.S. Stock Futures Fall After Fed’s Bullard Says October Tapering Possible – yawn!
*India Unexpectedly Raises Key Rate to Curb Inflation Running Above 9% – !!!
*JPMorgan’s Admission of Wrongdoing Marks Victory in SEC’s Policy Pledge –of sorts!
*Canada August Inflation Slows Near Target Floor as Mortgage Costs Decline
*Yen Bulls Multiply in Rebuke to Abe Facing Decision on Raising Japan Taxes
*Telecom Italia Said to Consider Selling Towers Valued Up to $1.35 Billion…as is AT&T…sale and leaseback…smart move!
*Ellison’s $100 Million America’s Cup Best Money Can Buy Sunk by Kiwi Sailors – !!!
*Republican Split Over Obama Health Care Law Muddles Spending Bill Strategy –good!
*Senate Budget Chief Murry Sees Republicans Yielding on Debt-Limit Measure – wise!
*Merkel Seeks German Mandate to Top Thatcher as Perils of Third Term Loom
*Obama Set to Issue First Carbon-Pollution Limits on New Power Plants Today – a step!
Yesterday, TB said that the timing of the Fed meeting and today’s options expiration couldn’t have been any more significant and that was proven out yesterday…maybe. Stocks gave back about one-third of the gains making anyone who chased it Wednesday look utterly stupid…and deservedly so! The only bright spot was Dow Transports which gained 0.3% adding to the 1.5% gain Wednesday. The two Nasdaq indices had minor gains of 0.2% following 1%+ gains Wednesday…mostly due to Apple! But the 100 gained just 6.3 points with 1.1:1 declining. Let’s look at the leaders and their prior four days changes: APPL +6.4 vs +7.9 vs +4.2 vs -12.3 vs -6.5 – do you see a trend here???; MSFT +2.2 vs +3 vs +1 vs -1.4 vs +2; TSLA +1.2; FB +1.2 vs n/a vs +4 vs -2.8; GOOG -1.2 vs +4.2…get the picture? Trendless in Seattle! Volume held up, but Advance/Declines were unimpressive, and new 52 week highs stable, while new lows stumbled. Most significant…or confusing was volatility which dropped sharply to a low 13.16, despite the weakness…makes for an interesting quadruple witching today!!!
Dow 30 -0.3% vs +1% vs +0.2% vs +0.8% vs +0.5%; Dow Transports +0.3% vs +1.5% vs +0.1% vs +1.1% vs +0.5%; Russell 2000 -0.2% vs +1% vs +1% vs +0.2% vs +0.5%; Dow Utilities -0.3% vs +3%!!! vs +0.5% vs +0.1% vs +0.9%; S&P 500 -0.2% vs +1.2% vs +0.4% vs +0.6% vs +0.3%; Nasdaq Composite +0.2% vs +1% vs +0.8% vs -0.1% vs +0.2%; NDQ 100 +0.2% vs +1.3% vs +0.7% vs -0.3% vs +0.1%.
*NYSE Volume fell slightly to an average 3.72B shares vs 3.96B vs 2.75B vs 3.06B vs 2.7B (2.52B is 4th weakest of 2013…1.96B is the low). REAL NYSE Volume also slipped to a still above average 738M shares vs 820M vs 577M vs 627M vs 567M vs 642M (482M on 7/3 in a shortened trading session is the 2013 low). The 12-month average is 718M 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 660M shares, ranging from 482M to 906M. There have been just SEVEN 1B+ share sessions! There have been 32 800M+ shares in 2013: 13 up, 17 down, and two mixed.
*New 52 week highs have ranged from 33-864. They were steady at 590 vs 587 vs 310 vs 449 vs 191. New lows fell to a low 36 vs 56 vs 59 vs 45 vs 87.
- Advance/Declines were negative: -1.4x vs +6x!!! vs +2x vs +2.1x vs +1.6x; (recent range NOW -17.5x to +6x) on NYSE and -1.2x vs +2.8x vs +2.1x vs +1.2x vs +1.5x (recent -3.5x to +3.8x). Breadth was mixed: -1.7x vs +7.2x!!! vs +2.7x vs +2x vs +1.7x (recent NOW -18.6x!!! to +7.2x!!!) on NYSE and +1.3x vs +3x vs 3.5x vs +1.1x vs +1.4x (recent is -12.8x to +6.5x)
- NYSE Financials fell by 0.6% vs +1.7%! vs +0.3% vs +1% vs +0.2%. BofA 2nd most active to Rite-Aid -0.7% vs +1.3% vs +0.1% vs +0.4% vs +0.2%, closing at $14.61 -.11. It has struggled since hitting $15.03 on 8/1 – highest since Jan. 14 and major res. Brokers -0.5% vs -0.9%! vs +0.9% vs +0.9% vs +0.4%; KBW Banks +0.2% vs +0.2% vs +1% vs +0.2% vs +0.2%; Nasdaq Banks -1.4%!!! vs -0.3% vs +0.2% vs +0.2%.
- Volatility (S&P VIX) DECLINED despite stocks being weaker…options expiry!!! to close at 13.16 -.43 with a range of 13.02-13.39!!! 14 remains key, and now 12??? Two weeks ago 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 now below the 40 day (14.12), the 50 day (14.33) and the 50 day (14.24)…ytd the range is 11.05 (3/14) to 21.92 (6/24)!
European stocks weak, Asia weak, Hong Kong closed: UK -0.2% vs +1.4%!!! vs +0.1% vs -0.4% vs +0.8%; France -0.2% vs +0.9% vs +0.5% vs -0.2% vs +0.9%; Germany -0.2% vs +1% vs +0.4% vs -0.2% vs +1.2%!; Japan -0.2% vs +1.8% vs +1.4% vs -0.7% vs closed vs +0.1%; Hang Seng closed vs +1.7% vs -0.3% vs +1.5%! vs -0.2% vs +0.1%; Korea still closed vs -0.4% vs +1% vs -0.5%; India -1.2%! vs +3.4%!!! vs +0.8% vs +0.3% vs +0.1%. U.S. equity futures lower, ex-NDQ, but still in a very narrow trading range – due to options expiry TODAY!!! DOW -15; SPX -1.70; NDQ +3.25.
Bonds still can’t catch a break…it appears most of Wednesday’s rally was short-covering following the Fed statement as they gave back about half of the gain yesterday Bond options also expire today!!! Overnight however they FLAT across the board. 10 yr Treasury closed 2.75% vs 2.69% vs 2.86%, now 2.75% +1/16 (recent range now 2.99% to 1.63%!!!), and the 30 yr range 2.67% to 3.90%, closed 3.80% vs 3.75% vs 3.82%, now 3.80 +1/16. The long TIP closed 1.46% vs 1.42% vs 1.51%, now 1.47% -1/32. The (record?) low of 0.36% was set on 4/5. Recent high yield: 1.63%! Libor update: 0.250% 3 mos, 0.373 6 mos. Another new record low on 6 mos. 3.73% while 3 mo. is knocking at the Jan. 2010 record lows (0.245% and 0.382% respectively). Foreign bond yields higher ex-Greece! Germany 1.96% +4; UK 2.94% +4; France 2.47% +5; Italy 4.60% +1; Spain 4.32% +2; Portugal 7.05% -1; Greece 9.57%!!! -26!!! vs 9.79% -25 vs 10.13 Other recent BIG moves: 9.64% -18; 9.81% -10; 10.02% +19; 9.95% +17; 9.86% -13; 10.02% -16; vs 10.27%; 10.33% -25!; 10.85% +28!; 10.54% +40!!!; 10.85% -37!!!. Recent range: 8.04% to 12.57%. Japan 0.69% +2.
Gold was strong yesterday and took the Fed-induced rally back to $1375.40 before closing at $1369.30 +$61.70 (some of this due to the low settle price used on Weds due to magnitude of the rally) but bounced from Tuesday’s weak $1291, first time below $1300 since 8/9! Overnight it plunged to as lows as $1346.20 before bouncing and is now $1355.60 -$13.70…WOW!!! Last Monday’s high was $1336 – above the 50 day. Last Friday’s low $1304.60!!! 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 again psychological support, while the 40 day ($1350) and the 50 day ($1339) are MAJOR SUPPORT. The 200 day is at $1485.
Crude also rallied sharply on the Fed breaking a three day losing streak Wednesday with a session high of $108.49 from $104.94, lowest since 9/3 and lowest close since 8/22! It closed WEAK however yesterday at $106.39 -$1.68 after hitting a high of $108.99 early in the session. Just nine days ago it set a rally high and close of $110.70 and $110.53 respectively. It is WAS back above the 40/50 day m/a’s ($106.72-.68), and crossed! The 200 day ($97.07) 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 tanking and is now $105.80 -.59 with a session low of $105.44!!!
Some random thoughts:
Are Americans smarter than Brazilians??? Apparently not! The Brazilians who love soccer thanks to their idol Pele, are up in arms over the money being spent on the 2016 Olympics while most of the country is in poverty. In an interview aired six months ago which TB only ran across yesterday, Bill Moyers interviewed investigative reporter Jay Kaplan who said the amazing thing is that we are doing the same here. Moyers/Kaplan
One other thing that ired them was the $60 million salary paid to a soccer star! So? Well, he joined them in their complaint that the government is letting people starve while spending hundreds of millions on the Olympics (who is the winner in a city selection process for the Olympics?…anyone who ISN’T selected…don’t point to the L.A. Olympics because that was the beginning of commercialism and pro athletes competing).
What Kaplan can’t understand is how the shrinking middle class in America continues to bow to the wealthiest even as their own wealth weakens and more slip into poverty. Why aren’t we upset? Why are so many middle-class Americans drawn to the Tea Party which was funded by the Koch brothers – greedy men whose idea of good government is no government? It defies logic. It is understandable that the wealthy don’t want to pay for schools, libraries, parks, etc. Why? Because they don’t use them and if they did they would pay for them! They don’t go to libraries, the build them…but unlike Carnegie, for their own pleasure not for educating the nation.
Can you blame them? An uneducated nation is just fine with them because then, they, the chosen ones, can run the country as they please and now they have corrupted our Congress by buying elections and driving the cost of getting elected so high that only those they support can win. Is this what the founding fathers wanted? Not likely. Lawrence Lessig has written books on how to stop this but it is unlikely for two reasons.
First, there is apathy as people struggle to survive let alone stay at the same level. Even those with good jobs settle for salaries that don’t keep pace with inflation while CEO’s and senior executives enrich themselves.
Second, the media has become popularity crazed. What attracts the viewers attention. Moyers points out the day that it was reported that carbon dioxide hit the trigger point of 400 parts per million. It didn’t even get a full day’s exposure. Not only FOX but CNN interrupted Obama’s speech on the subject to get views of others who killed the significance. By Sunday, not one talk show even mentioned it…only the comedians, which ties into the studies that show that is where young people get their news…maybe that’s a good thing?
We can overcome this…but we have to have the will and despite TB’s conversations with friends and this blog, no one give a damn. No one is willing to exert any effort for change. Even though the futures of our children and grandchildren are at stake. Are we proving the statement that the baby-boomers ‘aren’t egocentric…they just think the world revolves around them’? Sadly, that appears to be the case.
TB rests on that and is mortified by our lack of concern for this great country or its future. Ah, but the money is all important. Right, Jamie?
Enjoy your weekend,