9/22/13…where is the growth? Ask Congress!!!

Today’s Quote from the Friars Club Encyclopedia of Jokes: “If I look confused, it’s because I am thinking. “ – Samuel Goldwyn

Bloomberg Quote of the Day: “Everybody talks about the weather, but nobody does anything about it.” – Mark Twain
Bloomberg Top Stories:

*U.S. Payrolls Rise Less Than Forecast as Jobless Rate Hits a Five-Year Low – simply due to rounding while participation rate remains at two decades low

*S&P 500 Futures Gain With Treasuries as Dollar Falls, European Stocks Rise

*ECB Said Planning to Impose an 8% Capital Buffer on Region’s Biggest Banks

*Wall Street Profit Seen Falling 37% as DiNapoli Cites Legal Costs, Budget – !!!

*JPMorgan Guilty Plea Sought by Holder Signals Tougher Stance Against Banks – finally…previously it has been fines WITHOUT admitting guilt – Nail ‘em!!!

*Draghi Vindicated as Bond Sales Seen Declining to Crisis Low

*Blackstone Unit Profits in Can’t-Lose Codere Debt Trade

*How Wall Street Fed Puerto Rico’s $70 Billion Debt Binge as Economy Shrank

*Obamacare Website Testing Said to Be Incomplete in Rush to Start Program

*Obama Seeks to Reassure Hollande After Report of U.S. Spying Inside France

*Somalia Refugees Fear South African Violence More Than Civil War at Home

*Christie’s Gay Marriage Move Combines Political Reward With Risk for 2016

U.S. Non-Farm Payrolls in September rose by just 148k vs consensus 180k. Revisions to July/August added a combined 9k jobs (July -15k; August +24k). No standouts but all increases were in services…but Leisure/Hospitality FELL by 13k! Leaders were Prof. Bus. Svcs +32k (20k in Temps!); Transportation +23k; Retail +21k. For the 2nd straight month government added jobs: 22k vs 32k vs -11k. Ave Hours worked 34.5, unched; Ave Hourly Earnings +0.1% – where is the GROWTH???

The Unemployment Rate declined by 0.1% to 7.2% – only due to rounding; participation rate unchanged at a two decades low of 63.2% however!!! Adding in discouraged workers, 7.5% vs 7.9%; plus marginally attached 8.4% vs 8.7%, PLUS part-time for economic reasons 13.1% vs 13.6%. Cuts in full-time replaced by part-timers and ‘blamed’ on Obamacare most likely cause.

Market Reaction 9:15am EDT: Bonds rallying with 10 yr at 2.54% +1/2; 30 yr 3.63% +11/16; 30 yr TIP 1.34% +9/16. Stocks also rallying with Dow Futures +51; S&P +5.60; NDQ +12.25 – all in tight ranges however. Dollar weaker; Gold rallying!!! Crude continuing its decline. Oh, happy day!!!

The unemployment rate dropped in September as household employment grew faster than the increase in labor force. Over the past year, the unemployment rate has decreased by 0.6 percentage point, the result of 1,329k more people finding jobs as 503k more people entered the labor force. There are now 11.3 million people officially unemployed. In addition, there are another 6,163k people who say they want a job but are not currently looking for one.  Finally, another 7,860k people are working part-time because of slack economic conditions. On a trend basis the labor market is definitely improving but the gains are still modest.  A major source of error in Federal Reserve unemployment rate forecasts, the labor force participation rate remains stubbornly low. Courtesy of Economic Advisory Service

Monday’s Market Summary

Total NYSE Volume was 3.05B shares vs 3.64B. REAL NYSE Volume plunged but to an average 678M shares vs 892M shares – highest since 9/28’s 2.06B share day on quarterend with that big Dow member change. Indices were mixed with no big changes. Dow Transports best at +0.4% while NYSE Financials were the goat -0.6% vs +0.4%..

The Nasdaq 100 rose just 7.3 points or 0.2% a day after that 53 point gain of 1.6%. Four members gained more than 1 point; five lost more than a point days…Google, with 30 points and five others (AMZN +7.4; APPL +10 vs +3.5; PCLN +1.8; INTC +1.2; NFLIX +1.1; GOOG -2 vs +30!!!; GILD -1.7 vs +1.2; TSLA/BIDU -1.2; AMZN -1 vs +7.4.

Advance/Declines and Breadth were both slightly negative. New 52 week highs decline from a huge 890 to a still strong 746 while new lows fell to 33 from 40 – weak! VIX rose slightly a day after plunging to12.34, closing at 13.16 +.12. 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 lower. Gold closed up slightly and is very strong overnight! Crue is now 100.16 -.65. Crude closed sharply lower after trading to $99.01 – lowest since July 2nd !

Dow 30 -0.1% vs +0.2%; Dow Transports +0.4% vs +1.2%; Russell 2000 -0.2% vs +1.1%; Dow Utilities -0.1% vs +0.3%; S&P 500 flat vs +0.7%; Nasdaq Composite +0.2% vs +1.3%; NDQ 100 +0.2% vs +1.6%.

*NYSE Volume declined to a  below average 3.05B shares vs a solid 3.64B shares. The record high (?) is 4.82B shares on Q3 end of quarter while 2.52B is 4th weakest of 20131.96B is the low). REAL NYSE Volume plunged to a slightly below average 678M shares from 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 been 34 800M+ shares in 2013: 14 up, 18 down, and two mixed.

*New 52 week highs have ranged from 33-864. They declined to a still strong 746 from a super-strong 890!!! New lows remain weak falling to 33 vs 40.  

  1. Advance/Declines were slightly negative: -1.1x vs +2.6x (recent range -17.5x to +6x) on NYSE and -1.1x vs +2.1x (recent -4x!!! to +3.8x). Breadth was mixed: -1.4x +1.6x (recent -18.6x!!! to +7.2x!!!) on NYSE and PLUS 1.1x vs +2x (recent -12.8x to +6.5x).  
  2. NYSE Financials declined by 0.6% vs +0.4%. BofA 2nd most active DOWN  0.9% vs -0.3%, closing at $14.52 -.11! It has struggled since hitting $15.03 on 8/1 – highest since Jan. 14 and major res. Brokers -0.5% vs +1%; KBW Banks -0.1% vs +0.4%; Nasdaq Banks flat vd +0.7%.
  3. Volatility (S&P VIX) rose slightly after plunged for two days on the debt ceiling agreement rising to falling to 13.16 +0.12. 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 slightly weaker but are strong overnight with Pimco’s Gross saying no Fed taper soon: 10 yr Treasury 2.54% +9/16 (recent range 2.99% to 1.63%!!!), and the 30 yr range 2.67% to 3.90%, 3.63% +3/4. The long TIP is 1.33% +5/8. The (record?) low of 0.36% was set on 4/5. Recent high yield: 1.63%! Libor update: 0.238% 3 mos, 0.358% 6 mos.  Both at new record lows!!! Banks cautious and loaded with cash!!! Foreign bonds stronger ex-Greece/Portugal. Germany 1.81% -4; UK 2.65% -8!; France 2.31% -4; Italy 4.13% -5; Spain 4.19% -8!; Portugal 6.09% +2; Greece 8.27% +8. Recent range: 8.04%-12.57%. Japan 0.61%.

Gold closed slightly higher at $1315.80 +$1.20, safely above $1300 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 WEAK with an intraday low of $99.01 – lowest since July 2nd ! It has shown no sign of strength since 9/18’s surge to $108.49 – since then it is off 7.9%!!! – closing at $9.22 -$1.59. 9/19’s session high was $108.99! Recent rally high and close are $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 ($98.57) 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 slightly lower at $99.00 -.22 AND with a session low of $98.65!!! – nearly to the 200 day m/a!!!

Some random thoughts:

Back later with commentary.

TB

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