11/7/13…all a’twitter…but not about healthcare!

Today’s Quote from the Friars Club Encyclopedia of Jokes: “Why do I need a gun license? It’s only for use around the house.” – Charles Addams

Bloomberg Quote of the Day: “Necessity has no law.” – Saint Augustine – the poor know that now if only top 1% of Americans did! TB

Bloomberg Top Stories:

***U.S. Economy Grew 2.8% in Third Quarter VS Estimate 2% – take that to the bank

***Inventories in Q3 Climb at Fastest Pace In More Than a Year – involuntary???

***Initial Jobless Claims fell 9,000 Last Week to 336,000 – can u still get insurance?

*ECB Unexpectedly Cuts Rate ti Record Low to Fight Looming Deflation Risk – finally! Someone used the ‘D’ word…note that Libor has been at record lows for a month!

*European Stocks Rise as Euro Weakens After Surprise ECB Benchmarks Rate Cut – now let me get this straight… we are at severe risk of deflation and stocks rise???

*Twitter (TWTR) to Begin Trading in New York After Setting $26 IPO Price – sukkahs! Oh and Goldman-led underwriters to ‘earn’ $59.2 million from the IPO!!!

*Lew Said to Warn U.S. Bank Chiefs of Tough Volcker Rule in Private Meeting – !!!

*Currency Traders Bemoan Slump Squeezing Profit at Deutsche Bank to HSBC–hmm

*Czech Republic to Sell Koruna for First Time in Decade as Inflation Slows

*Goldman Sachs Being Investigated inn Worldwide Currency Probe, Filing Shows!!!

*Credit Agricole CEO Refuses Settlement on Euribor With EU– thinks he’s Dimon?!?

*J.C. Penney’s October Comparable Sales Rose 0.9%, First Time in 2 Years – finally!

*Siemens Plans $5.4 Billion Buyback as Chief Joe Kaeser Bets on Economy

*Israel Central Banker Says 1% Benchmark Rate Is Appropriate for Ecnomy

*Greenspan’s Bequest to Yellen Is Compliant Fed Board Revealed in Records

*Apple Rollout for IPhone 5 Traps Workers Exploited by Global Supply Chain

*Employers in U.S. Face Gay-Discrimination Ban in Bill Set for Senate Vote

*Obamacare’s Website Frustrations Remain as Deadline for Tech-Surge Fix Looms

*Top Earners Seek Strategy to Cut Year-End Bite as Time Runs Short – poor babies!

*Norway’s Christina Democrats Call for Lower Cap on Spending of Oil Wealth   

Wednesday’s Market Summary:

Before we start, TB has never highlighted so many dismal headlines in one day! Corruption thrives…risk of deflation in Europe…”it’s a great life if you don’t weaken”, as TB’s first boss and mentor used to say…just don’t weaken.

Tell TB…in what kind of hell is deflation good for stocks? Just asking! The heavy lifting was done by the Dow +0.8% and the S&P 500 +0.4%, the former with another record high??? Also, when, on a mixed day when Dow Transports, both Nasdaq indices, and the Russell 2000 all decline to some extent, and Dow Utilities have the best performance, +1.3%!!!, does volatility decline? Not just decline, mind you, but back below 13 and not that far away from the  recent low which is near an ‘all-time’ low? Beats the hell out of ole TB…guess he just doesn’t get the new math!

All the above on a slight decline and modest volume to 3.33B shares vs 3.48B vs 3.17B shares, while REAL NYSE Volume declined again to a below average 704M shares vs 742M shares from a weak 658M shares, lowest since 10/14. Think about it!

The Nasdaq 100 was down just 0.1% or 3.5 points vs +0.1% vs 0.2% by 1:1. EIGHT members, however LOST more than 1 point for a total of 17 points!!! SEVEN gained more than a point for a total of 19 points BUT..there’s always a ‘but’, Microsoft alone was ELEVEN of those points…THINK!!! APPL -3.9 vs -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.;GILD -3; TSLA -2.8!!!; FB -1.5 vs +3 vs -2.5; BIDU/VIP/AMGN/AMZN/REGN -1.2; PCLN -1.1; MSFT +11.3!!! vs +5.2 vs +1.2; vs +1.2; EBAY +2.5; COST +1.5; QCOMCSCO +1.1; ESRX/LBTYA +1. Advance/Declines AND breadth were mixed with NYSE stocks both positive and Nasdaq both negative? New 52 week highs dipped for a 2nd day to 228 vs 262 vs 268 vs 194 vs 252 vs 394, while new lows were stable at 85 vs 83. VIX DECLINED closing BELOW 13 at 12.67 -.60??? Only the second close below 13 since 8/13!!! Since March 11th the average has been just 14.49…way below the five year’s 23.32~~~ and the 200 day: 14.40!!! Options expiration on the 15th – a setup? Hmmm.

Bonds closed mixed with only the 30 year off and by just 1/32, with mior gains in 10’s and long TIPS. Gold rose slightly offsetting Tuesday’s loss and closing at $1317.80 +$8.70. Crude recovered, albeit minimally closing at $94.80 +$1.03 vs $93.37 -$1.25, with Tuesday’s session low of $93.07 holding, lowest since June 24th!!!

Dow 30 +0.8% vs -0.1% vs +0.2% vs +0.5% vs –0.5%; Dow Transports -0.7% vs -0.5% vs +1.2%! vs +1%! vs –0.5%; Russell 2000 -0.5% vs -0.4% vs +1.2%! vs -0.4% vs 0.5%; Dow Utilities +1.3%??? vs -0.8% vs +0.2% vs +1%!!! vs -0.6%; S&P 500 +0.4% vs -0.3% vs +0.4% vs +0.3% vs -0.4%; Nasdaq Composite -0.2% vs +0.1% vs +0.4% vs +0.1% vs -0.3%; NDQ 100 -01% vs +0.1% vs +0.2% vs +0.1% vs -0.2%…stable???

*NYSE Volume fell back to a below average 3.33B shares vs 3.48B vs 3.17B vs 3.67B vs 3.83B. 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 declined sharply to a below average 704M shares vs 742M vs 658M, lowest since 10/14 vs 810M vs 892M (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 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 slipped again to 228 vs 262 vs 268 vs 194 vs 252. Recent high is a super-strong 890!!!New lows were stable at 85 vs 83 vs 59 vs 84 vs 79 vs 46.  

  1. Advance/Declines were minor and mixed: +1.1x vs -2.1x vs +2x vs -1.2x vs -1.5x (recent range -17.5x to +6x) on NYSE and -1.1x vs -1.4x vs +1.9x vs +1.4x vs -1.6x (recent -4x!!! to +3.8x). Breadth was nearly identical: +1.2x vs -2.3x vs +3x vs +1.2x vs -1.8x (recent -18.6x!!! to +7.2x!!!) on NYSE and -1.4x vs 1:1 vs +1.5x vs +1.1x vs -1.1x vs -2.8x (recent -12.8x to +6.5x).  
  2. NYSE Financials were up 0.5% vs -0.7% vs flat vs +0.1% vs -0.8%. BofA most active +0.2% vs 0.6% vs +0.1% vs +0.4% vs -1.4%, closing at $13.96 +.03. It has struggled since hitting $15.03 on 8/1 – highest since Jan. 14 and major res. Brokers +1.2%? vs -0.2% vs +0.5% vs +1% vs -0.9%; KBW Banks +0.3% vs flat vs -0.1% vs +0.2% vs -1.1%; Nasdaq Banks +0.5% vs +0.1% vs +0.2% vs -0.2% vs -1.1%.
  3. Volatility (S&P VIX) DECLINED…and on a mixed performance day??? closing at 12.67 -.60lines which produced the lowest close since 8/13, closing at 12.67 – .60, the session low! Note in August it surged back on the expiry! The recent range is 11.83-21.01!!! Only the second close below 13 since 8/13!!! Since March 11th the average has been just 14.49…way below the five year’s 23.32~~~ and the 200 day: 14.40!!! It peaked at 22.79 on 12/28/12…ytd the range is 11.05 (3/14) to 21.92 (6/24)!

 

European stocks higher on ECB, Asia mixed: UK +0.1% vs +0.1% vs -0.6% vs +0.6% vs +0.1%; France +1.2%!!! vs +0.9% vs -0.9% vs +0.5% vs -0.3%; Germany +1.3%!!! vs +0.4% vs -0.5% vs +0.4% vs -0.1%; Japan -0.8% vs +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 -0.7% vs flat vs -0.7% vs -0.3% vs +0.2% vs -0.4% vs +2%!!!; Korea -0.5% vs flat vs -0.6% vs -0.7% vs +0.5% vs -1.4%!; India -0.4% vs -0.4% vs -1.3%! vs closed vs +0.2%. U.S. stock futures strong and near session high with broad range: DOW +68; SPX +6; NDQ +5? Oh, oh, what is happening to the Nasdaq???…and with Twitter IPO (TWTR) today??? Stock market opened higher with Dow up 49 to another record high…now down 21!!! Whew!!!

Bonds closed little changed and mixedand are only slightly better overnight and fading: 10 yr Treasury 2.64% +1/16 (recent range 2.99% to 1.63%!!!), and the30 yr range 2.67% to 3.90%, 3.77% +1/16. The long TIP is 1.45% -1/32. 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 lower across the board led by problem credits: Germany 1.69% -5; UK 2.70% -1; France 2.15% -6!; Italy 4.08% -13!; Spain 4.03% -11!; Portugal 5.75% -9! Greece 7.77% -12!!! Last Friday’s low of 7.71% was another new low! Recent range now: 7.71%-12.57%. Japan 0.58% -2.

Gold closed slightly higher with session high just above the 40 day, closing at $1317.80 +$8.70. 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 ($1320) and the 50 day ($1334). Major resistance at $1375, the 9/19 high. The 200 day is at $1422. Overnight it is weaker at $1302.90 -$14.90 with a low of $1296!!!

Crude rallied but not quite offsetting Tuesday’s loss a day after falling to $93.07, lowest since 6/24, closing at $94.80 +$1.03. 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 ($101.39/102.83), falling again, and still major resistance! The 200 day ($98.70) 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 lower at $94.32 -.48.

Some random thoughts:

Yesterday, in John Mauldin’s Outside the Box, he present a commentary by Jonathan Tepper on what is wrong with Obamacare. TB does not take exception to what he said but feels some points were missed:

  1. The ACA (not the slang Obamacare) is a failure because the GOP, who originally promoted universal health care, denounced it once Obama liked it…just as they did with Clinton. This despite the success of it under Romney in Massachusetts.
  2. Just as with Medicare Part D under George W. Bush, and sponsored by Rep. Billy Tauzin (R-LA), who wrote the bill, specifically banned Medicare from negotiating prescription drug prices, thus causing it to pay 30% more than Medicaid, a major reason why this program which was unfunded, has failed and ballooned Medicare’s woes, Obama caved to the pharma lobby in exchange for his support for the legislation. Tauzin, announcing he had cancer left Congress only to become head of PhRMA, the very group he aided. He left in 2010 earning $11.6 million that year…quid pro quo?
  3. Since the passage of the ACA, the GOP has fought for its destruction, challenging it in the Supreme Court, where the conservatives stripped it of some of its power, and making it doomed to failure by it not being national, which Tepper agrees with. Instead, it promotes the monopoly of the insurance lobby, which is an oligarchy, again as Tepper says and is immune from price fixing.
  4. The GOP first wanted to ‘repeal and replace’ but we know that would never have happened, they just want the repeal. To do otherwise would credit Obama. So for all these years since passage they had the opportunity to fix it but declined to do so, burying it in lies and rhetoric.
  5. Tepper is correct also that we pay more for healthcare than any country in the world and even then while it is good it is not the best. This should tell us something is terribly wrong.
  6. Portability is not only desirable but a necessity as our population increasingly moves to where the jobs are and the money. Many of the states have few insurers and some of the state commissioners have been corrupted. Yet, the GOP has done nothing to solve it due to their insistence on states rights…what about citizen rights?
  7. We hear a lot about how much the ACA will cost yet the losses by hospitals on uninsured patients…in ER rooms, most for minor ills that should be treated in Urgent Care facilities…but little about how that causes them to raise fees in an upward spiral.
  8. As for people losing their health insurance, that is due to insurers offering coverage AFTER passage of the ACA knowing that it would be inadequate and have to be cancelled after. This served to make Obama look bad, increase their revenues and likely keep most of the insureds with higher revenues.

I could go on but the point is we are being extorted on healthcare costs, and people are suffering for it…and it is those who can least afford it. There is a solution(s), but we are blind to them. This is shameful in what used to be a country that cared. The care now is by the top 1% who don’t want to pay for schools, healthcare, libraries, etc. because they don’t use them. This can only produce a less educated, less-informed electorate, while our Congress is incented to do their bidding over the well-being of the majority.

We have been steamrolled by the Koch brothers funded Tea Party, and the Karl Rove email propaganda…the latter having formed a PAC which surely pays him generously.

Let’s stop the blame and fix it…but the obstructionists in Congress don’t want that while we, the people are forced to pay…dearly.

Sincerely,

William J. Darusmont

Have a great day…oh, Twitter priced at $26, hasn’t opened but bid at $42. Want to bet it closes lower than that after trading perhaps to $46? Then the typical downward spiral while the hedge funds enrich themselves at the Goldman trough!

TB

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