NOTE: Back home from Peru…to a still insane country…and its government! TB
Today’s Quote from the Friars Club Encyclopedia of Jokes: “A man who carries a cat by the tail learns something he can learn in no other way.” – Mark Twain – right Sen. Cruz? Or did you learn anything?…GOP? Hello!!!
TB’s Quote of the Day: “To amass military power without regard to our economic capacity would be to defend ourselves against one kind of disaster by inviting another.” – Dwight D. Eisenhower, SOTU speech, 1959 – military spending is our biggest problem! To quote another wise president, Thomas Jefferson responding to the Barbary pirates in order to protect American shipping from pirates (XYZ affair) “millions for defense, but not one cent for tribute” – note it was not BILLIONS…and he didn’t mean taking it from other purposes!
Bloomberg Quote of the Day: “Leave the sun. Take the canola.” – Francis Ford Coppola
Bloomberg Top Stories:
*Sales of Existing U.S. Homes Decline as Prices, Rates Discourage Buyers
*Yen Weakens on Japan Export Data as Oil Falls; S&P 500 Is Little Changed
*SAC Defections Acclerate With Forcina Departure as Cohen Nears Settlement
*KKR to Goldman Joined in Fight Over Scraps as Record LBO Bankruptcy Looms
*McDonald’s Quarterly Revenue Trails Analyst’s Estimates as U.S. Gains Slow
*Tea Party Interrupting Fed Taper Plan Awakens Bond Market’s Animal Spirits
*Cyprus Tops Germany as Europe Bailout Provider at 2.3% of GDP Versus 2.1% – !!!
*Private-Equity Firms Raising Record Loans in U.S. for European Companies
*Obamacare Rushing to End Delauys as Talk Grows of Extending More Deadlines-groan
*France Summons U.S> Ambassador After NSA Evesdropping Report in Le Monde
*Female Suicide Bomber Blamed for Russian Bus Blast That Killed Five People
*Train-Crash Avoidance Systems Derailed by U.S> Tribes’ Claim Over Antennae
This week’s economic calendar is full of important indicators. The highlight of the week will be the September Employment Situation report (Tuesday). We will also get September Existing Home Sales (Monday), Richmond Fed Manufacturing Survey (Tuesday), September Import & Export Prices (Wednesday), September New Home Sales and August JOLTs Job Openings (Thursday), September Durable Goods Orders and October Consumer Sentiment Final (Friday). Courtesy of Economic Adivsory Service
Friday’s Market Summary
Total NYSE Volume was 3.64B shares…solid but not great BUT REAL NYSE Volume surged to 892M shares, highest since 9/28’s 2.06B share day on quarterend with that big Dow member change. All indices were up, led by the two Nasdaq indices, +1.3% and +1.6% respectively, along with Dow Transports +1.2% and the Russell 2000 small cap +1.1%, while NYSE Financials rose just 0.4%, Dow Utitlites +0.3% and the Dow up just 0.2% (?).
The Nasdaq 100 surged by 53 points or 1.6% for honors BUT…there’s always a but these days…Google, with 30 points and five others (AMZN +7.4; APPL +3.5; FB +3.2; VIDU +3; Gild +1.2. No member lost even 1 index point!
Advance/Declines and Breadth were both positive. New 52 week highs erupted to 890!!! while new lows plunged to 40. VIX plunged again to12.34 before closing at 13.04 -.44, a 3.3% drop. Since hitting 21.34 on 10/9 – close to the 12/28 high of 22.72 and 6/24 high of 21.91 – over the Congressional debacle, it has fallen by 39%!!! Now very bullish but options expiry on Friday!!! Bear trap???
Bonds closed modestly higher following the gap up on Thursday following the agreement on the ‘debt ceiling’ but are being hit again overnight erasing all of Friday’s gains and more. Crude closed up slightly but broke par overnight falling to $99.45 but is now 100.16 -.65. Gold closed lower but safely above $1300 again…at least for now! The question is why is it above $1300 again…distrust of U.S. government??? You betcha!
Dow 30 +0.2%; Dow Transports +1.2%; Russell 2000 +1.1%; Dow Utilities +0.3%; S&P 500 +0.7%; Nasdaq Composite +1.3%; NDQ 100 +1.6%.
*NYSE Volume was a solid 3.64B shares. The record high (?) is 4.82B shares on Q3 end of quarter while 2.52B is 4th weakest of 2013…1.96B is the low). REAL NYSE Volume rose sharply to a strong 892M shares!!! (2.06B shares also on Sept. expiry was 3rd highest ever (6/30/06 3.38B; 7/12/02 2.29B while 482M on 7/3 in a shortened trading session is the 2013 low). The 12-month average is 719M shares. The average since 6/28’s 1.75B share day, is just 685M shares, ranging from 482M to 2.025B shares on 9/20. There have been just EIGHT 1B+ share sessions! There have now been 34 800M+ shares in 2013: 14 up, 18 down, and two mixed.
*New 52 week highs have ranged from 33-864. They rose sharply to 890!!! New lows remain weak at 40.
- Advance/Declines were positive: +2.6x (recent range -17.5x to +6x) on NYSE and +2.1x (recent -4x!!! to +3.8x). Breadth was similar: +1.6x (recent -18.6x!!! to +7.2x!!!) on NYSE and +2x (recent -12.8x to +6.5x).
- NYSE Financials rose by a modest +0.4%. BofA FOURTH most active DOWN -0.3%, closing at $14.63 -.03! It has struggled since hitting $15.03 on 8/1 – highest since Jan. 14 and major res. Brokers +1%; KBW Banks +0.4%; Nasdaq Banks +0.7%.
- Volatility (S&P VIX) plunged for a second day on the debt ceiling agreement falling to 13.04 -0.4%. The recent range is now 11.83-21.01!!! It peaked at 22.79 on 12/28/12. It is now well BELOW the 40 day (15.59), the 50 day (15.31) and the 200 day (14.40)…ytd the range is 11.05 (3/14) to 21.92 (6/24)!
Bonds closed higher but are weak overnight: 10 yr Treasury 2.61% -1/4 (recent range 2.99% to 1.63%!!!), and the 30 yr range 2.67% to 3.90%, 3.67% -9/16. The long TIP is 1.38% -5/8. The (record?) low of 0.36% was set on 4/5. Recent high yield: 1.63%! Libor update: 0.239% 3 mos, 0.358% 6 mos. Both setting new record lows!!! Banks cautious and loaded with cash!!! Foreign bonds little changed. Germany 1.84% +1; UK 2.73% +2; France 2.35% +1; Italy 4.26% +1; Spain 4.26% +1; Portugal 6.15% -1; Greece 8.18% -1. Recent range: 8.04%-12.57%. Japan 0.61%.
Gold closed lower at $1314.60 -$8.40 but at least is above $1300 again after putting in a low of $1251 on 10/15 – lowest since 7/10. Recent high was $1375.40 on 9/19. 6/27’s intraday low was $1179.40 – lowest since at least 2011 and critical support. $1300 remains psychological support, while the 40 day ($1338) and the 50 day ($1342) are MAJOR RESISTANCE. The 200 day is at $1444.
Crude closed slightly higher but still very weak with not sign of strength subce 9/18’s surge to $108.49 – since then it is off 7.9%!!! – closing at $100.81 +.14. 9/19’s session high was $108.99! Recent rally high and close is $110.70 and $110.53 respectively. It is way below the 40/50 day m/a’s ($105.00-105.24), major resistance and crossed! The 200 day ($98.58) is major support!!! 4/18’s low of $85.61 was lowest since 12/11! The recent range is $85.61-$112.24 since March 1, 2012. OVERNIGHT is is WEAK again at $100.07 -.74 AND with a session low of $99.45 – nearly to the 200 day m/a!!!
Some random thoughts:
The bullshit is dead…long live the bullshit…or as Yogi Berra would say, ‘it ain’t over till it’s over’ – a wise man indeed and it ain’t over by any means. Congress is broken, our government is broken…and what a disgrace it is. Sure it’s the Tea Party but so much more. Congress continues to treat itself differently than those it makes the laws for. Last night on 60 Minutes there was a segment on ‘legislative PAC’s’ – essentially slush funds for Congress…nepotism and boondoggles thrive here…and no one cares. One Rep…a GOP by the way…tried to push through a law banning hiring of relatives…he has been on this case for two years and cannot even find a co-sponsor, let alone get it to the floor!
No this is the new ruling class and they are enriching themselves ‘at the public trough’ while not even holding themselves to the same standards as they push on we, the people.
Isn’t it interesting that Jamie Dimon and Lloyd Blankfein both complained to Congress about the debt ceiling mess. Both of these ‘leaders’ with questionable motives. Blankfein unbelievably avoided prosecution following his Congressional hearing on manipulating prices on new issues and favoring one client over another…along with his firm benefitting, natch…Dimon forced to step down as CEO of the operating subsidiary…aka JPMorgan bank…and now reportedly the company…er…shareholders will pay that $11 BILLION fine of which $4 BILLION goes to FNMA/FHLMC. The crooks, both public and private reign supreme…advice to youth: if you want to get rich…go to Wall Street, not be a doctor/engineer etc. This is SICK…the new billionaire class…at least the Robber Baron’s of the late 19th century put their own money at risk…stop this train I want off!!!
Peru was wonderful and we had several discussions about their government and their concern for ours. They see us as a joke…at least they know theirs is a joke. Friends travelling in Europe hear the same thing. We have allowed this to be done to us by our own elected government…if you can call it that as they insure their own survival by gerrymandering their districts to ensure re-election…then why do they need all those campaign funds…so they can raise more money for….themselves!!!!
Oligopoly in economics is a few companies controlling a market…think cigarettes…by creating barriers to entry that keep anyone else from having enough market share to survive. Isn’t that what our esteemed Congress does? You bet it does…and the Tea Party is making it even worse…but they are inadvertently subjecting themselves and both parties to daylight…isn’t that special??? The test will be if we are all ‘mad as hell’ and can stay that way until the mid-term elections…a dubious task.
Good to be back in the USofA…even if it isn’t the country I used to be proud of…you???