Today’s Quote from the Friars Club Encyclopedia of Jokes: “I wouldn’t mind paying taxes, if I knew they were going to a friendly country.” – Dick Gregory
Bloomberg Quote of the Day: “They are proud in humility; proud in that they are not proud.” – Robert Burton
Bloomberg Top Stories:
*Brent Crude Futures Traders Claim Poof BFOE Boys Manipulated Oil Markets – Now it is clear why crude has plunged to $93…another faux rally as they did in 2009!!!
*Stocks Advance on Earnings as Oil Leads Rally in Commodities??? Huh? Rally???
*Lloyds Starts Internal Investigation Into Potential Currency Manipulation – EGAD!!!
*Facebook Misadventure Means Scrutiny on Exchanges as Twitter Prepares IPO
*Italian Bond Orders Exceed $27 Billion in Sale Aimed at Smaller Investors
*Time Warner Beats Profit Estimates on Fee Gains From Programs, Advertising
*Puerto Rico Will get Advice on Fiscal Management Without Aid, Miller Says – ya sure!
*E-Cigarettes Wafting Into American Workplace 25 Years After Smoking Banned – ugh!
*McAuliffe Prevails in Virginia as Christie Is Re-Elected, De Blasio Wins
*Virginia Choice Combined With Alabama House Result Show Tea Party Decline –good!
Tuesday’s Market Summary:
Ahem, volume came up and stocks for the most part declined (only the two Nasdaq indices +0.1%), led by Dow Utilities -0.8% and Dow Transports -0.5%, then the Russell 2000 -0.4% and NYSE Financials fell by 0.7%. Get it? Volume rises to near average and stocks decline, ipso facto. Volume rose to 3.48B shares vs 3.17B shares, while REAL NYSE Volume rose to a slightly above average 742M shares from a weak 658M shares, lowest since 10/14. Think about it!
The Nasdaq 100 was up just 0.1% vs 0.2% BUT with 1.8:1 declining! FIVE members gained more than 1 point while THREE lost more than a point: MSFT +5.2 vs +1.2; vs +1.2; FB +3 vs -2.5; CSCO +2.3; REGN +1.8; SBUX +1.1; AMGN -1.5; GOOG/INTC -1. Apple not a factor although it was off 0.9 vs +5.4 vs -1.9 vs -2.1 vs +6.4 vs +2.6 vs -4.7 vs +5.7 vs +3.8 vs -1.2 vs +10 vs +3.5. Advance/Declines were both negative? New 52 week highs dipped slightly to 262 vs 268 vs194 vs 252 vs 394, while new lows came back to 83 vs 59 vs 84 vs 79 from a weak 46 vs 29. VIX rose following two days of declines closing at 13.26 +.23. Monday was the first close below 13 since 8/13!!! Options expiration on the 15th – a setup? Hmmm.
Bonds were hammered even as stocks declined! Gold dropped slightly closing at $1308.10 -$6.60 on a near parallel session. Crude was trashed again closing at $93.37 -$1.25 and only after putting in another session low of $93.07, lowest since June 24th!!!
Dow 30 -0.1% vs +0.2% vs +0.5% vs –0.5% vs -0.4%; Dow Transports -0.5% vs +1.2%! vs +1%! vs –0.5% vs -0.6%; Russell 2000 -0.4% vs +1.2%! vs -0.4% vs –0.5% vs -1.2%!; Dow Utilities -0.8% vs +0.2% vs +1%!!! vs -0.6% vs -0.6%; S&P 500 -0.3% vs +0.4% vs +0.3% vs -0.4% vs -0.5%; Nasdaq Composite +0.1% vs +0.4% vs +0.1% vs -0.3% vs -0.6%; NDQ 100 +0.1% vs +0.2% vs +0.1% vs -0.2% vs -0.2%.
*NYSE Volume rose to a near average 3.48B shares vs 3.17B vs 3.67B vs 3.83B vs 3.53B. 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 also rose to a slightly above average 742M shares vs 658M, lowest since 10/14 vs 810M vs 892M vs 687M (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 722M shares. The average since 6/28’s 1.75B share day, is just 698M shares, ranging from 482M to 2.025B shares on 9/20. There have been just EIGHT 1B+ share sessions! There have now been 35 800M+ shares in 2013: 15 up, 18 down, and two mixed.
*New 52 week highs have ranged from 33-864. They came dipped to 262 vs 268 vs 194 vs 252 vs 394. Recent high is a super-strong 890!!! New lows also came back to 83 vs 59 vs 84 vs 79 vs 46.
- Advance/Declines were negative: -2.1x vs +2x vs -1.2x vs -1.5x vs -2.4x vs +1.6x (recent range -17.5x to +6x) on NYSE and -1.4x vs +1.9x vs +1.4x vs -1.6x vs -2.8x (recent -4x!!! to +3.8x). Breadth was mixed: -2.3x vs +3x vs +1.2x vs -1.8x vs -1.8x (recent -18.6x!!! to +7.2x!!!) on NYSE and 1:1 vs +1.5x vs +1.1x vs -1.1x vs -2.8x (recent -12.8x to +6.5x).
- NYSE Financials were off 0.7% vs flat vs +0.1% vs -0.8% vs -0.5%. BofA 2nd most active down 0.6% vs +0.1% vs +0.4% vs -1.4% vs +0.1%, closing at $13.95 -.09. It has struggled since hitting $15.03 on 8/1 – highest since Jan. 14 and major res. Brokers -0.2% vs +0.5% vs +1% vs -0.9% vs -0.5%; KBW Banks flat vs -0.1% vs +0.2% vs -1.1% vs -0.2%; Nasdaq Banks +0.1% vs +0.2% vs -0.2% vs -1.1% vs -0.2%.
- Volatility (S&P VIX) rose following two days of declines which produced the lowest close since 8/13, closing at 13.26 + .23. Note in August it surged back on the expiry!The recent range is now 11.83-21.01!!! It peaked at 22.79 on 12/28/12. It is still BELOW the 40 day (14.87), the 50 day (15.13) and the 200 day (14.39)…ytd the range is 11.05 (3/14) to 21.92 (6/24)!
Global stocks mostly higher, ex-India: UK +0.1% vs -0.6% vs +0.6% vs +0.1% vs -0.4%; France +0.9% vs -0.9% vs +0.5% vs -0.3% vs +0.4%; Germany +0.4% vs -0.5% vs +0.4% vs -0.1% vs +0.1%; Japan +0.8% vs +0.2% vs closed vs -0.9% vs -1.2% vs +1.2% vs -0.5% vs +2.2% vs -2.8%!!!; Hang Seng flat vs -0.7% vs -0.3% vs +0.2% vs -0.4% vs +2%!!!; Korea flat vs -0.6% vs -0.7% vs +0.5% vs -1.4%!; India -0.4% vs -1.3%! vs closed vs +0.2% vs +0.6%. U.S. stock futures higher: DOW +69; SPX +9; NDQ +14.50.
Bonds closed weak and are only slightly better overnight: 10 yr Treasury 2.65% +5/32 (recent range 2.99% to 1.63%!!!), and the 30 yr range 2.67% to 3.90%, 3.77% +1/32. The long TIP is 1.46% +3/8. The (record?) low of 0.36% was set on 4/5. Recent high yield: 1.63%! Libor update: 0.239% 3 mos, 0.354% 6 mos. Both are barely above new record lows!!! Banks remain cautious and loaded with cash!!! Foreign bonds slightly weaker, problem countries led by Portugal rallying: Germany 1.73% -1; UK 2.73% +1; France 2.21% -1; Italy 4.13% -4; Spain 4.07% -3; Portugal 5.81% -23!!! vs 6.05%!!!; Greece 7.88% -4. Last Friday’s low of 7.71% was another new low! Recent range now: 7.71%-12.57%. Japan 0.60% +1.
Gold closed slightly lower in a near parallel session, closing at $1308.10 -$6.60. The recent low is $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 with major res now at the 40 day ($1321) and the 50 day ($1336). Major resistance at $1375, the 9/19 high. The 200 day is at $1424. Overnight it is little changed at $1315.40 -.60 and remains weak.
Crude closed extremely weak and then only after falling to $93.07, lowest since 6/24, closing at $93.37 -$1.25!!! It has shown no sign of strength since 9/18’s surge to $108.49. 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 ($101.71/103.11), and still major resistance! The 200 day ($98.71) is also 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 slightly higher at $93.96 +.59.
Some random thoughts:
Today’s commentary is from a response to a friends criticism of Obamacare as another thing that would be nice to have but we can’t afford it. Can’t or don’t care that we are lagging the rest of the world in it? It needs fixing…so fix it and stop your obstructionist bickering!
1. Universal health care was originally a GOP idea that was jettisoned when the Clintons wanted it and now with Obama (recall Romney put it in in Mass but couldn’t talk about it in election).
2. We are the only industrialized nation without universal health care.
3. I totally agree with you on national insurance companies which we already heve – BUT to comply with state laws they have to have a sub in each state they do business…expensive and: if you move to another state, do you know they aren’t sharing information on you? You could have had some high claims and be rejected. Why is this so? Because of the Roberts Supreme Courts ‘interpretation’ of it as not being federal but up to the states. That is why some states have as few as two providers!
4. At the time of the framing of the Constitution people seldom moved long distances and besides pensions and healthcare were not even a consideration. Now we have an increasingly mobile (nomadic?), economy – they go where the jobs and money are and should not lose their health benefits.
5. As one of the articles I sent you states, upon passage of Obamacare insurers wrote new policies knowing they would not comply with the law when it went into effect. Why? First, people are more likely to stay with their provider, and more importantly it makes the law look worse further antagonizing the people.
6. The GOP has had lots of time to correct flaws in the bill but continues to hold Congress, Obama, and the people, hostage. In other words, as discussed in the book I mentioned, if Obama likes it they hate it. Why make him look good? Why do they continue to hold up nominations for cabinet members and heads of departments? So he cannot carry on his agenda. Meanwhile, people are suffering economically but they don’t give a damn…all they want is to keep taxes low for the wealthy, who, by the way don’t use public schools, libraries, etc. Food stamps…amazing…$4 a day…but look how many are taking it…why? Because they are living at the poverty level! More than half of food stamps go to children…
7. Why does Medicare have problems? Blame Dubya and the GOP Congress. He pushed for and got Medicare Part D – which was unfunded and has caused costs to soar…and then negotiating prices of prescription drugs was banned by Congress which is why Medicare pays 30% more for drugs than Medicaid! THEN along came with Obama and was suckered by pharma into taking that out of the bill too in exchange for running ads supporting it. The head of the Pharma lobby is guess who? The same GOP senator who wrote the bill for Medicare Part D!!! Makes over $1 million a year…pay for play?
I could go on but urge you to read It’s Even Worse Than It Looks, by Thomas Mann and Norman Orenstein. They present facts and solutions and are two of the top constitutional scholars in the country! I will tell you up front that you might not like it because they come to, and fully support their beliefs, the conclusion that the GOP is far and away more culpable then the Dems…and they do not endorse them either!
How can people want to be in Congress when nothing gets done, despite urgent need…why is the rebuilding from Hurricane Sandy going so much slower than Katrina? Obstructionists!
I am sick of this government and no longer proud to be an American…just thoroughly disgusted!
All the best,