10/30/13…who cares about confidence…OR jobs???

Today’s Quote from the Friars Club Encyclopedia of Jokes: “Benjamin Franklin said, “Fish and visitors smell in three days,” but old friends from college usually smell already.?- P. J. O’Rourke

Bloomberg Quote of the Day: “Beauty is a mystery. You can neither eat it nor make flannel out of it.” – D. H. Lawrence   

Bloomberg Top Stories:

*PriceWaterhouseCoopers Will Merge With Booz to Expand Consulting Services – hey, isn’t that what Arthur Anderson did…before Enron brought them down? Just asking!

*Consumer Prices in U.S. Rise in Line With Estimates on gain in Fuel Costs – fuel yes, but gasoline prices plunging??? No worries!

*Stocks Rise Along With Government Bonds as Copper Advances Before Fed Statement

*Barclays Mulls Faster Pace of Asset Reductions as Currency Probe Disclosed

*ECB Says Banks Set to Ease Standards on Lending for First Time Since 2009 – hello?

*Companies in U.S. Add Fewer Workers Than Expected Amid Impasse, ADP says

*ICBC Profit Misses Estimates on Bad Loans While Bank of China, AgBank Gain

*Fiat Cuts 2013 Profit Target as Third-Quarter earnings Miss – what about Abarth?

*Teva CEO Jeremy Levin to Step Down After Reported Feud With Chairman Fros

*Dell’s Mitzvah Rescued $25 Billion LBO as JPMorgan’s Lee Warned of Perils

*Sebelius Apologizes to Americans for Defects in Health-Care Law’s Website – awww

*Obamacare’s Deadline Extension Opposed by Insurers Concerned Over Profits – !!!

*Indiana Losing Fight for Less Government Shows Politicians Guard Their Own –Duh!

*’No-Spy Treaty’ Sought by Germany as Merkel Sends Delegates to White House – yawn

Tuesday’s Market Summary:

 Nice rally in stocks, no? Hey, record highs, but get this…on TEPID data and worse a huge 10 point drop in Consumer Confidence…centered in EXPECTATIONS six months out! Newbies: this is the one that is important to the stock market – normally!!! It shouldn’t be too surprising either given the loss of (lack?) confidence in Congress and the President…but hey, why not rally stocks on it…normally the Dow would have lost 100 points on this news but we are in the ‘new normal.’ – which is anything BUT normal. The old expression ‘cruisin’ for a bruisin’ comes to mind. Note that the weak of late Dow was the best performer up 0.7% followed by the also boring S&P 500 +0.6%. The rest were up a boring 0.2-0.4%. Weakest however was NYSE Financials up just 0.1% – hmm.

 Total NYSE Volume again but not to a level that would normally support a rally to record highs on the Dow and S&P! It was a slightly below average 3.33B shares vs 3.19B vs 3.11B vs 3.63B. REAL NYSE Volume however dropped  to a below average 683M shares vs 732M vs 670M vs 716M vs 709M vs 753M – a far cry from the prior Friday’s 892M shares – highest since 9/28’s 2.06B share day on quarterend.

The Nasdaq 100 rose 0.3% vs flat vs +0.5%. Six members gained more than 1 point while three lost more than a point: GOOG +5.2; AMZN +1.9 vs -2.1 vs +12.7!!! vs +2.1 vs -2.3 vs +2.5 vs -1 vs +7.4; EBAY +1.6; CSCO +1.4; BIDU +1.3; GILD +1.2 vs -1.4; BIDU -1.3; MSFT -1 vs +14.9!!!; INTC +2; AAPL +2.6 vs -4.7 vs +5.7 vs +3.8 vs -1.2 vs +10 vs +3.5; FB -1.4 vs -7.8;  CMCSA -1. WTF???

Advance/Declines and Breadth were moderately positive. New 52 week highs surgeed to 460 vs 380 vs 500, while new lows barely budged to 29 vs 31 vs 34 vs 29 vs 35 vs 36 vs 33 vs 40 – weak! VIX rose slightly again, closing at 13.41 +.75. This on a record setting day??? Since hitting 21.34 on 10/9 – close to the 12/28 high of 22.72 and 6/24 high of 21.91.

Bonds closed little changed and are slightly higher overnight…amazing given the drop in Consumer Confidence! Gold declined dipping below in the 50 day m/a before coming back to close at #1345.50 -$6.70 – slight lower high and lower low from a new recent high of $1361.80 (higher high, higher low) – highest print since 9/30, with the 50/40 day remaining as major support. Crude declined on an inside day, closing at $98.20 -.48 – back below the 200 day.

Dow 30 +0.7% vs flat vs +0.4% vs 0.6% vs -0.3%; Dow Transports +0.2% vs +0.4% vs -0.2% vs +0.9% vs +0.6%; Russell 2000 +0.4% vs flat vs -0.1% vs +0.7% vs -0.4%; Dow Utilities +0.2% vs -0.3% vs +1%!!! vs -0.1% vs +0.3% vs +1.4%!!!; S&P 500 +0.6% vs +0.1% vs +0.4% vs +0.3% vs -0.4%; Nasdaq Composite +0.3% vs -0.1% vs +0.4% vs +0.6% vs -0.6%; NDQ 100 +0.3% vs flat vs +0.5% vs +0.5% vs -0.7%.

*NYSE Volume rose to a still below average 3.33B shares vs 3.19B vs 3.11B vs 3.63B vs 3.64B. 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 however declined to a  below average 683M shares vs 732M vs 670M vs 716M vs709M. (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 723M shares. The average since 6/28’s 1.75B share day, is just 694M 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 rose to 460 vs 380 vs 500 vs 476 vs 298. Rent high is a super-strong 890!!! New lows stable at a weak 29 vs 31 vs 34 vs 29 vs 35 vs 36 vs 33 vs 40.  

  1. Advance/Declines were moderately positive: +1.6x vs -1.2x vs +1.4x vs +1.4x vs -1.2x (recent range -17.5x to +6x) on NYSE and +1.5x vs -1.1x vs -1.1x vs +1.6x vs-1.4x (recent -4x!!! to +3.8x). Breadth was similar: +1.8x vs -1.2x vs +1.5x vs +1.4x vs -1.9x (recent -18.6x!!! to +7.2x!!!) on NYSE and +1.4x vs -1.3x vs -1.2x vs +1.2x vs -3.4x (recent -12.8x to +6.5x).  
  2. NYSE Financials rose just 0.1% vs +0.2% vs +0.2% vs vs +0.4% vs -1%! BofA 2nd most active again -0.6% vs -0.2% vs +0.6% vs -0.3% vs -2.1%!!!, closing at $14.15 -.08. It has struggled since hitting $15.03 on 8/1 – highest since Jan. 14 and major res. Brokers +0.4% vs -0.4% vs +0.4% vs +0.6% vs -0.6%; KBW Banks +0.1% vs +0.2% vs +0.3% vs flat vs -0.7%; Nasdaq Banks -0.2% vs +0.5% vs +0.1% vs +0.4% vs +0.1%.
  3. Volatility (S&P VIX) rose despite the rally to 13.41 +.75. 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 (15.28), the 50 day (15.31) and the 200 day (14.39)…ytd the range is 11.05 (3/14) to 21.92 (6/24)!

 

Global stocks higher, Asia strong: UK +0.2% vs +0.6% vs -0.1% vs +0.1% vs +0.5%; France ++0.1% vs +0.6% vs -0.7% vs flat vs +0.1%; Germany flat vs +0.3% vs -0.2% vs +0.2% vs +0.5%; Japan +1.2% vs -0.5% vs +2.2% vs -2.8%!!! vs +0.4% vs -2%!; Hang Seng +2%!!! vs +0.2% vs +0.5% vs -0.6% vs -0.7% vs -1.4%; Korea +0.4% vs +0.2% vs +0.7% vs -0.6% vs +0.5% vs -1%; India +0.5% vs +1.7%!!! vs -0.6% vs -0.2% vs -0.2%. U.S. equities opening higher: DOW +17; SPX +3; NDQ +11.

Bonds closed slightly better. Slightly higher overnight: 10 yr Treasury 2.49% +1/8 (recent range 2.99% to 1.63%!!!), and the 30 yr range 2.67% to 3.90%, 3.61% +3/64. The long TIP is 1.30% +1/8. The (record?) low of 0.36% was set on 4/5. Recent high yield: 1.63%! Libor update: 0.242% 3 mos, 0.355% 6 mos. Both just a tad above  record lows!!! Banks cautious and loaded with cash!!! Foreign bonds mixed – Greece strong: Germany 1.70% -4; UK 2.56% -4; France 2.20% -2; Italy 4.18% +5; Spain 4.05% +1; Portugal 6.15% +4; Greece 8.20% -10! Recent range: 8.04%-12.57%. Japan 0.58% -3.

Gold closed slightly weaker higher after putting in a slightly lower high and lower low (breaking the 50 day), a day after the high since 9/30 of $1361.80 with the 50/40 day m/a’s major support, closing at $1345.50 -$6.70 This 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, major support at the 50 day ($1341) and the 40 day ($1327). Major resistance at $1375, the 9/19 high. The 200 day is at $1432. Overnight it is higher at $1357.60 +$12.10.

Crude closed lower on an inside session and remains weak. Thursday’s low of $95.95 – was lowest since 6/27!  It has shown no sign of strength since 9/18’s surge to $108.49 – closing yesterday at $98.20 -.48, below the 200 day. 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 ($103.55-103.97), crossed, plunging, and major resistance! The 200 day ($98.72) is still major resistance. 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 lower at $97.26 -.94…another lower low.

Some random thoughts:

Running late today but would like to ask how…and in what kind of hell…do stocks rally on a sharp drop in Consumer Confidence – especially expectations??? This amid tepid data releases…perhaps looking for another bailout from the Fed in the form of a continuation of the QE’s at least for now?

ADP Payrolls came out slightly below expectations but not by any means strong. Friday’s expectation is for another modest increase in jobs…ignore the unemployment rate!

This could turn into a very ugly quarter…have a great day!

TB

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