Today’s Quote from the Friars Club Encyclopedia of Jokes: “I don’t think it’s fair to call people middle-aged just because they’re not so young anymore.” – Syd Hoff
Bloomberg Quote of the Day: “I saw and loved.” – Edward Gibbon…as did TB as Machu Picchu – which in Inca (Cheqan) means ‘big mountain’…and it is!
Labor market trends are slowing improving with this week’s report bringing the 6-month average of non-farm payroll growth to 174k, little changed compared to its 18 month average of 175k. Labor force participation and the unemployment rate were volatile due to the Shutdown. Smoothing this data and applying 174k monthly growth gets us to an unemployment rate of 6.8% by YE2014. Q3 GDP was stronger than expected on a bounce in inventory accumulation. This week’s economic calendar is fairly light. We will get October Treasury Budget (Wednesday), Q3 Productivity & Costs and September International Trade (Thursday), October Import & Export Prices, November Empire State Manufacturing, October Industrial Production and September Wholesale Trade (Friday). Courtesy of Economic Advisory Service
Bloomberg Top Stories:
*Stocks in U.S. Little Changed After Equities Rally for Fifth Straight Week – see below
*Race to the Bottom Resumes as Central Banks Ignite a New Round of Easing – ???
*Apple Said to Be Developing IPhones With Curved Screens, Enhanced Sensors…bully!
*Obmaa Stocks Among Best Ever After Re-Election as Bull Market Getting Old – VERY!
*Alitalia to Propose 2,000 Job Cuts as Board Weights Rescue Proposals
*Teens Flee Abercrombie for Upstarts as Smartphone Pictures Top Mall Visits
*WTI Crude Oil best Drop to Four-Month Low as Glut Expands
*Online Pawnshops for 1 Percent Turn Conspicuous Consumption Into Currency
*Typhoon Haiyan Makes Landfall in Vietnam Philippines Death Toll Climbs
*Iran Signs Agreement to Give UN Monitors Greater Access to Nuclear Sites
*Samaras Survives No-Confidence Vote as Greece Is Locked in Creditor Talks
*Rolex Daytona Sells $1.1 Million at Christies Geneva Auction
*Fed Really, Really Wants to End Problem of Too Big to Fail by Barry Ritholtz
Friday’s Market Summary:
Ah, t’was an up day…and on solid volume although lower than on Thursday’s decline…still it more or less made it breakeven with the Dow closing up 0.9% on the week. Not so for the Nasdaq 100 and Dow Transports, and Dow Utilities, which all declined by 0.4%, while the Composite, the S&P 500 and the Russell 2000 broke even.
Not so for treasuries as the 30 yr bond lost over 3%, the 10 yr nearly 2%, and the long TIP 3.5%…what must Bernanke (and Yellen) be thinking about the ‘taper’ – damned if you do and damned if you don’t because the economy cannot stand rate rises like that!
Gold lost 2.2% on the week closing at $1284 with a low of $1280 – lowest since 10/17! Crude closed FLAT and remains extremely weak in a boring week that ended with two consecutive ‘inside days’ (lower high and higher low than the prior two days.
Twitter (TWTR) is fulling TB’s expectations: priced at $26, opened at $44 and within a half hour hit its high of $50.09, then closed at $$44.90, then followed suit on Friday wih a high of just $46.94, low of $40.68 and closed at $41.65. TB is not psychic…just rational: if everyone had the ability to purchase the shares on Thursday, and didn’t and it is now lower but still way above the pricing…why buy it? Another Facebook, Fortress, BlackRock swoon? Time will tell…always does!
NYSE Volume slipped to a still high 3.82B shares from 4.14B vs 3.33B vs 3.48B vs 3.17B, as did REAL NYSE Volume to a strong 820M from a very strong 910M shares, matching 10/31, and not seen since 9/20’s third highest all-time 2.06B shares – vs 704M vs 742M vs 658M shares, lowest since 10/14.
The Nasdaq 100 rose 1.4%, but not offsetting Thursday’s gain…up only up 45 vs -64…the wonders of math! Winners outpaced losers by 9:1 vs –13:1!!! At least a dozen members gained more than a point with the top seven adding 17.5 points and not a single loser of even a point (opposite of Thursday!), A charade? APPL +6.6 vs -6.7 vs -3.9 vs -0.9 vs +5.4.; AMZN +2.8 vs -5.2 vs -1.2; GILD +2.3’ GOOG +2 vs -3.6; MSFT +1.9 vs -4.7 vs +11.3!!! vs +5.2 vs +1.2; vs +1.2; CMCSA +1.5, followed by many.
Advance/Declines AND breadth were positive less than Thursday’s negatives! New 52 week highs rose after declining for three days to 253 vs 206 vs 228 vs 262 vs 268 vs 194, while new lows were about even at 103 vs 109 vs 85 vs 83. VIX declined but did not fully offset Thursday sharp rise but is back below 13 with a high of 13.80, ending at 12.90 vs 13.91 -1.01 vs +1.24!!! This is only the third 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 THIS FRIDAY! – a setup? Hmmm.
Bonds were trashed following a rally Thursday and with double the force! Worried about the Fed starting to taper again…are we nuts??? 10’s 2.75% -1-1/4!!!, 30’s 3.85 -2-1/2!!!, long TIP 1.53% -2-3/4!! Gold closed weakest since 10/17 at $1284.60 off almost $24 following a NEGATIVE key reversal…caution! Crude barely budged on a 2nd straight ‘inside’ session closing at $94.60 +.40, following Tuesday’s session low of $93.07 holding, lowest since June 24th!!!
Dow 30 +1.1% vs -1% vs +0.8% vs -0.1% vs +0.2%; Dow Transports +1.1% vs -1.4% vs -0.7% vs -0.5% vs +1.2%! vs +1%!; Russell 2000 +1.9% vs -1.8% vs -0.5% vs -0.4% vs +1.2%!; Dow Utilities -0.2% vs -0.9% vs +1.3% vs -0.8% vs +0.2% vs +1%!!!; S&P 500+1.3% vs -1.3% vs +0.4% vs -0.3% vs +0.4%; Nasdaq Composite +1.6% vs -1.9% vs -0.2% vs +0.1% vs +0.4% vs +0.1%; NDQ 100 +1.4% vs -1.9% vs -0.1% vs +0.1% vs +0.2%…hmmm.
*NYSE Volume slipped but to a still high 3.82B shares vs 4.14B vs 3.33B vs 3.48B vs 3.17B. 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 slipped to a still strong 910M shares vs 704M 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 now 702M shares, ranging from 482M to 2.025B shares on 9/20. There have been just EIGHT 1B+ share sessions! There have now been 37 800M+ shares in 2013: 16 up, 19 down, and two mixed.
*New 52 week highs have ranged from 33-864. They rose to 253 vs 206 vs 228 vs 262 vs 268 vs 194. Recent high is a super-strong 890!!!New lows were about even at 103 vs 109 vs 85 vs 83 vs 59.
- Advance/Declines were positive but compare to Thursday: +1.3x vs -3.5x vs +1.1x vs -2.1x vs +2x (recent range -17.5x to +6x) on NYSE and +3x vs -3.4x vs -1.1x vs -1.4x vs +1.9x (recent -4x!!! to +3.8x). Breadth not so much: +2.7 vs -6.4x!!! vs +1.2x vs -2.3x vs +3x (recent -18.6x!!! to +7.2x!!!) on NYSE and +3.8x vs -4.7x!!! vs -1.4x vs 1:1 vs +1.5x (recent -12.8x to +6.5x).
- NYSE Financials fell by 1.3% vs +0.5% vs -0.7% vs flat vs +0.1% vs -0.8%. BofA 2nd most active to TWTR -1.2%! vs +0.2% vs –0.6% vs +0.1% vs +0.4% vs -1.4%, closing at $13.80 -.16! It has struggled since hitting $15.03 on 8/1 – highest since Jan. 14 and major res. Brokers -1.9% vs +1.2%? vs -0.2% vs +0.5% vs +1%; KBW Banks -1.1% vs +0.3% vs flat vs -0.1% vs +0.2% vs -1.1%; Nasdaq Banks -0.9% vs +0.5% vs +0.1% vs +0.2% vs -0.2% vs -1.1%.
- Volatility (S&P VIX) SURGED hitting 14.14 before closing at 13.91 +1.24, following just 2 days below 13! Since 8/13! Note in August it surged back on the expiry! The recent range is 11.83-21.01!!! 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)!
Global stocks rallying, ex-India/Korea. U.S futures barely changed in a tight session: UK +0.3% vs -0.7% vs +0.1% vs +0.1% vs -0.6%; France +0.5% vs -1.5%!!! vs +1.2%!!! vs +0.9% vs -0.9%; Germany +0.2% vs -0.8% vs +1.3%!!! vs +0.4% vs -0.5%; Japan +1.3% vs -1% vs -0.8% vs +0.8% vs +0.2%; Hang Seng +1.4% vs -0.6% vs -0.7% vs flat vs -0.7%; Korea -0.4% vs -1% vs -0.5% vs flat vs -0.6%; India -0.9% vs -0.8% vs -0.4% vs -0.4% vs -1.3%!
Bonds were…well destroyed! Long end lost 2-1/2 points and TIPS were even worse. Thankfully closed while we regroup: 10 yr Treasury 2.75% -1-1/4 (recent range 2.99% to 1.63%!!!), and the30 yr range 2.67% to 3.90%, 3.85% -2-1/2!!! The long TIP closed 1.53% -2-3/4 – nearly5 points in two days!!! The (record?) low of 0.36% was set on 4/5. Recent high yield: 1.63%! Libor update: 0.239% 3 mos,0.355% 6 mos. Both steady but barely above new record lows!!! Banks remain cautious and loaded with cash!!! Foreign bond yields lower, ex-U.K. – Portugal and Greece STRONG: Germany 1.75% -1; UK 2.81% +4; France 2.21% -1; Italy 4.11% -2; Spain 4.11% -2; Portugal 5.76% -13! Greece 7.91% -10!!! Recent range now: 7.71%-12.57%. Japan 0.58% +1.
Gold closed WEAK at the lowest level since 10/1 and well below $1300 following a NEGATIVE key reversal (higher high, lower low, close below prior days low), closing at $1284.60 -$23.90…-$33 in two days. 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 ($1319) and the 50 day ($1329). Major resistance at $1375, the 9/19 high. The 200 day is at $1419. Overnight it is slightly weaker at $1283.50 -$1.10 with another new low of $1278.10!!!
Crude was boring with in a 2nd straight ‘inside’ session three days after falling to $93.07, lowest since 6/24, closing at $94.60 +.40. 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 ($100.68/102.22), and plunging, and still major resistance! The 200 day ($98.69) 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 little changed at $94.45 -.16.
Some random thoughts:
Today is Veteran’s Day…not even a full holiday as businesses…and our manipulated stock market are open as usual. The headline comes from the exact time that World War I…the war to end all wars…ended. Are we the only nation that honors our fallen by fighting? How about a poll of those who lost their lives on the direction this country has taken and how they would feel about losing their lives…for this? If only…
The ‘email brigade’ is at it again. I urge all of you to factcheck. Virtually all emails of this nature originate from special interest group that distorts facts to promote their agenda. This is the second similar email I have received in two days. The first, full of expletives, blasted former Sen. Alan Simpson for comments he made.
As for the point about how much you ‘might have earned’, consider these points:
1. S.S. was never a guarantee of what you would earn on your ‘tax’ – if so, the early retires would never have been protected.
2. The average life expectancy was much shorter then and it is increasing.
3. What would you have if Pres. G.W. Bush had succeeded in his plan to let YOU invest part of ‘your’ funds in the stock market? Who wanted this? Wall Street. What happened to your IRA in 2008? But the point is, it never was ‘your’ money!
4. Congress ‘appropriated’ the trust funds over the years, replacing them with IOU’s which pay S.S. the rate on 3 mo. Treasury bills which for the last five years have been effectively zero!
Thankfully, one responder provided a link. Note it refutes the email, but you decide, but base it on facts, not on a vague reference to ‘Google it’!
By the way, in the defense of Social Security recall it was a Democratic program. IRA’s and later 401(k)’s by extension, were GOP programs which effectively took defined benefit plans, without informing taxpayers that they would not have enough to retire..Instead, we were promised ‘trickle down’ – which has produced the biggest wealth gap since the early 1900’s while working class earnings have been stagnant for more than two decades.
I could go on but stop and think before you decide which party you like. Frankly, I loathe what both have done, but don’t confuse an entitlement with earned income. You did not buy an annuity.
Here are two links that point out the state of our economy and the shrinking middle class:
Lastly, congratulations to Gov. Chris Christie…to those of you who believe I am a radical, this is one republican I could vote for as president. Hopefully the party will have the sense to change its ways and nominate him, but that is probably asking too much, a travesty in a two-party system which leaves informed voters with only one choice if they believe in true American values.
Think of Vets today…not yourself…and that includes Vets who were lucky and made it!