TB’s Quote of the Day: “The trouble, of course, is that old bugaboo, accountability. Shareholders don’t provide that. Governments do. In a democracy, you have checks and balances. You have voters (note shareholders don’t vote or along company lines). Planning doesn’t have to be centralized to be effective and fair. Secretiveness combined with contempt for old-fashioned constraints on corporations’ increasingly centralized power effectively derails discussion of how the for-profit conglomerates are going to look after the needs of the people and the planet.” – Bonnie Blodgett, from an op-ed in the Minnesota Star Tribune on what genetically modified crops are doing to the world. http://www.startribune.com/opinion/commentaries/233077931.html
Today’s Quote From the Friar’s Club Encyclopedia of Jokes: “I was stopped for going fifty-three in a thirty-five-mile-per-hour zone, but I got off. I told them I had dyslexia.” – Spanky (Steve McFarlis)
Bloomberg Quote of the Day: “The difference between the impossible and the possible lies in a man’s determination.” – Tommy Lasorda – go Dodgers!
The FOMC Minutes indicated they view rate guidance and QE as “closely linked”, potentially confirming the notion that they would like to slowly transition from QE to guidance. The trend in jobless claims is still declining modestly. Regional manufacturing surveys were mixed, though, and suggest a slight decline is possible for ISM. The data picture remains mixed, potentially making payrolls on December 6th an even bigger event than usual for monetary policy. Thix week’s economic calendar is fairly light. We will get November Dallas Fed Manufacturing (Monday), September Case-Shiller, November Consumer Confidence, and November Richmond Fed Survey (Tuesday), October Durable Goods Orders, November ISM Chicago Survey, and November Consumer Sentiment Final (Wednesday). Courtesy of Economic Advisory Service
Bloomberg Top Stories:
*Wal-Mart Stores Names Doug McMillon Chief Executive to Succeed Mike Duke – not a company TB would be proud to be CEO of…unless he could raise workers wages!
*Stocks Climb to the Highest Level Since 2008 While Gold Weakens With Yen
*ECB’s Hansson Says Negative Deposit Rate Possible as Options Not Exhausted – we need to listen to Yellen on cutting rate on excess reserves from 0.25% to ZERO
*Gary Gensler’s Last Standon Swaps Has Wall Street Running for Its Lawyers – you mean Gensler is able to stand on his hind legs? What a wimp not prosecuting any CEO!
*BlackBerry Executives Depart as NEW CEO Chen Installs His Management Team
*RBS Hires Lawyers to Prove Conduct After Government Report Found Abuses – NO!?!
*Europe’s Twin Woes Seen Festering in Draghi Fight From Jobs to Inflation
*London Luxury-Home Construction Accelerates Even as Price Increases Slow – LOL!
*Hungry Americans Are Less Productive as Budget Cuts Contribute to Anxiety – DUH!
*Urban Revival Eludes Baltimore as Camden Yards Promises Succumb to Reality – L
*Thanksgiving Travel Seen More Challenging as Storms Move to U.S. Northeast
*Nuclear Deal Bolsters Iran President Rouhani in Struggle With Hardliners
*Ukraine Opposition Seeks to Keep Pressure on Yanukovych to Reverse EU Snub
*Government as Problem-Solver Is Sseen Undermined by Obamacare Websdtie Flaws – wait…weren’t the healthcare programs farmed out to the insurers??? YES THEY WERE!
Friday’s Market Summary:
Another record eked out for the Dow…and a record high close at 16064.77, just below the new record high of 16068.78…not much higher and especially following Thursday’s first close above 16k. Records are made to be broken and fools are born to believe they mean anything to an investor. Ah, but this was on even lower volume than Thursday’s 3.25B shares: 3.05B – almost a 2 billion handle. Real NYSE Volume also lower at a very weak 607M shares vs 665M, well below the 12-month m/a. Since November 11, there have been exactly ZERO 700M+ sessions…winter doldrums??? Or just plain apathy?
The rally has to be viewed in perspective: total NYSE Volume has ranged from a very low 2.53B shares on Nov. 11, to 3.35B shares on Nov. 13, and the average since has been just 3.1B shares…a far cry below the 3.6B or so average just before including a huge 4.14B share day on November 7th – a HUGE down day…remember: you want rallies on BIG volume and declines on low…just the opposite of what we have seen this month! Think about it! (On Friday, left out the 3.1 billion average figure). Real Volume over that period has run just 651M shares, compare to the 12-month average of 720M shares! WEAK!!! Of course, part of the reason for this is that the bears have been wrung out of the market. Complacency…but the big guns are at the ready…just give them a chance!
Yesterday’s leader, both Nasdaq indices, +0.6% followed by the Russell 2000, small cap, +0.5% – along with the S&P 500, while the Dow turned in the weakest performance – in spite of its record volume, up just 0.3% – Dow Utilities were off 0.1%.
Advance/Declines and Breadth were finally positive for a second day but less so. New 52 week highs sharply higher at 477 vs 348 vs 170 vs 171 vs 514 vs 430 vs 444 vs 331 vs 226, while new lows slumped to 88 vs 123 vs 118 vs 93 vs 56 vs 66 vs 102 vs 93 vs 64 (Vets Day – never short a thin market). VIX DECLINED AGAIN to 12.26 -.40.
Bonds regained less than half of Wednesday’s loss…but at least better, small comfort. Gold took another horrendous hit losing $14.40 ($40 in two days!) to close at $1243.60, low print was $1235.80, lowest print since July 8th. Crude on the other hand rallied by $2.11 to close at $95.44, highest since 11/1, with a high print of $95.63??? Manipulated?
The Nasdaq 100 rose by 19 points or 0.6% vs +1.1% with 3.2:1 vs 6.6:1 advancing. Eight members gained more than a point while two lost more than a point: BIIB +7 vs +1..3; CMCSA +3.9 vs +1.1; GILD +3.6; QCOM +1.9; CELF +1.7 vs +1.1; REGN+1.5; AMZN +1.4 vs +2.6 vs -1; MSFT +2.4 vs +2.5 vs -3.4 vs -5 vs -1.1 vs -1 vs +6;. INTC -6 vs +2.9; APPL -1 vs +4.9 va -3.6 vs -0.3 vs -5.2;
If you care, bonds rallied but remain weak. Gold slightly lower and traded in a very narrow range as was Crude which had a very narrow inside session: nothing to see here.
Dow 30 +0.3% vs +0.7% vs -0.4% vs -0.1% vs +0.1%; Dow Transports +0.4% vs +1.1% vs -0.3% vs -1% vs -0.3%; Russell 2000 +0.5% vs +1.8%! vs –0.1% vs -0.3% vs -0.8%; Dow Utilities -0.1% vs +0.1% vs -1.4% vs -0.8% vs flat; S&P 500 +0.5% vs +0.8% vs –0.4% vs -0.2% vs -0.4%; Nasdaq Composite +0.6% vs +1.2% vs –0.3% vs -0.4% vs -0.9%; NDQ 100 +0.6% vs +1.1% vs –0.3% vs -0.3% vs -1%!
*NYSE Volume was sharply lower at a very weak 3.05B shares vs 3.25B vs 3.1B vs 3.2B vs 3.24B vs 3.15B vs 3.13B vs 3.35B. 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 sharply lower at a WEAK 607M shares vs 665M vs 622M vs 646M vs 655M (2.06B shares on the Sept. expiry was 3rd highest ever: 6/30/06 3.38B; 7/12/02 2.29B while 482M on 7/3 on a shortened trading session is the 2013 low). Since 1/11 the high has been 796M shares on 11/15, the only day with a ‘7’ handle! The 12-month average is 722M shares. The average since 6/28’s 1.75B share day is just 697M shares, ranging from 482M to 2.025B shares on 9/20. There have been just EIGHT 1B+ share sessions! There have 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 477 vs 348 vs 170 vs 171 vs 514 vs 430. Recent high is a super-strong 890!!! New lows were sharply lower at 88 vs 123 vs 118 vs 93 vs 56.
- Advance/Declines were positive but less so: +1.6x vs +2.9x vs -2x vs -2.1x vs -1.6x (recent range -17.5x to +6x) on NYSE and +1.6x vs +3.3x vs -1.2x vs -1.7x vs -1.7x (recent -4x!!! to +3.8x). Breadth was similar: +1.9x vs +2.7x vs -1.8x vs -2.2x vs -1.9x (recent -18.6x!!! to +7.2x!!!) on NYSE and +1.4x vs +5.2x vs -1.3x vs -1.6x vs -3x (recent -12.8x to +6.5x).
- NYSE Financials rose 0.4% vs +1.1% vs -0.4% vs -0.2% vs +0.6%. BofA most active +0.3% vs +3%! vs -0.4% vs +1.9%, and closing at $ 15.64 +.05, with a new 12-month high of $15.78 – after gapping up on the open, It closed at low end of range but still highest since 6/16/10??? Had not been above $15 since 8/10. C also made the list rising 1.3%! Brokers +0.5% vs +2.2%! vs +0.3% vs +0.3% vs -0.1%; KBW Banks +2.3% vs +1.5% vs -0.1% vs +0.1% vs -0.1%; Nasdaq Banks +0.8% vs +1.7% vs +0.1% vs -0.2% vs flat. Barron’s was al ‘ga-ga’ about financials…apparently not realizing the earnings are largely a result of recaptured reserves for loan offices.
- Volatility (S&P VIX) remained below 13 for a 2nd day, closing at 12.26 -.40 with a low of 12.24. The recent range is 11.83-21.01!!! Since March 11th the average has been just 14.44…way below the five year average of 23.32~~~ and the 40/50/200 day: 14.51/14.40/14.36!!! It peaked at 22.79 on 12/28/12…ytd the range is 11.05 (3/14) to 21.92 (6/24)!
Global stocks higher, led by India and Japan with only Hang Seng slightly lower: UK +0.3% vs -0.2% vs flat vs -0.2% vs –0.5%; France +0.5% vs +0.2% vs –0.3% vs -0.3% vs -0.9%; Germany +0.9% vs flat vs -0.2% vs -0.1% vs -0.2%; Japan +1.5% vs +0.1% vs +1.9%!!! vs -0.3% vs -0.3%; Hang Seng -0.5% vs +0.5% vs -0.5% vs +0.2% vs +2.7%!!!; Korea +0.5% vs +0.6% vs -1.2%! vs -0.7% vs +1%; India +1.9% vs -0.1% vs -2%!!! vs -1.2% vs +0.2% vs +2.2%!!!; U.S. stocks opening higher: DOW +22; SPX +9; NDQ +13. – then down, then back up…where she stops, nobody knows, right?
Bonds came back from the abyss…rallying for a second session but remain…WEAK! However the ‘breakdown’ on the 30 year turned out to be a ‘false break’ – at least for now. FLAT overnight: 10 yr Treasury 2.75% (recent range 1.63% to 2.99%), and the 30 yr range 2.67% to 3.92% (breakdown!), 3.83%. The long TIP is 1.49%. The (record?) low of 0.36% was set on 4/5. Recent high yield: 1.63%! Libor update: 0.236% 3 mos, 0.345% 6 mos. (both with new record lows!). Foreign bond yields mostly lower: Germany 1.73% -2; UK 2.7% -2; France 2.19% -2; Italy 4.14% +1; Spain 4.14% +4!; Portugal 5.90% +1; Greece 8.58% +2. Recently: 7.71% – 12.57%. Japan 0.63% +2
Gold had a slight ‘higher high’ but closed a tad lower for a total loss of $44 for the week with Thursday’s $1235.80 the lowest since July 8th. It closed at $1243.60 -.70. A week ago the high was $1293.80! 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 resistance with major res at the 40 day ($1305) and the 50 day ($1309), both still dropping. Major resistance at $1375, the 9/19 high. The 200 day is a distant $1399. Overnight it is lower at $1236.80 -$7.80 with a low of $1226.40 – lowest since July 8th!
Crude closed little changed in a very narrow inside session at $94.82 -.11. Last Tuesday’s session low was $92.43, lowest since 6/4. 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 ($98.02/99.35), both still dropping rapidly and major resistance! The 200 day ($98.55) is converging with the 40/50 day!!! Thus very 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 it is lower at $94.07 -.77….best to avoid commodities – a plague?
Some random thoughts:
…on Friday, Senate Majority Leader Harry Reid, dropped the so-called ‘nuclear option’, which was just plain common sense to allow the Senate to ‘do the people’s business.’ The misstatements by both sides are an abuse. What a way to honor the deaths of two great men. They should be ashamed. But shamed the were not…shocked, shocked, they say!
How dare he do this? Misuse of power and authority? Well if the GOP – and to a lesser extent the Dems, told the truth you would see that TB’s comment was the correct one (along with the old saw: “absolute power corrupts – absolutely”). Some history:
First, there is no legal term ‘filibuster’ it grew out of a comment by a senator back in the mid-1800’s. It has come to be considered a constitutional guarantee…which it is not!
The world comes from the Spanish for ‘pirate or privateer’ and originally came from the Dutch. In today’s world, nothing better than describes what the Senate is doing better than that…except perhaps, legalized extortion!
That said, it has a use: for a minority which has little or no chance of stopping what they see as bad or even dangerous legislation from preventing the enactment of a law. But it has been ‘pirated’ to stopping anything that the minority…and we are talking about a very small minority wants. In fact, in today’s usage it is usually a handful and if they can get past the filibuster, laws, appointments, etc. have almost consistently passed by 90 or more votes. In other words, the ‘few’ have circumvented the voters who by a 53% margin elected Obama…ah, but this terribly upset the curmudgeon, Mitch McConnell, who, if you recall, mid-way into Obama’s first term said, “my first priority is to make Obama a one-term president.” Telling, right? You bet it is because he was angered by failing and is doing everything in his power to stop Obama from doing what he was elected to do.
This leads us to the plaintive cry of the GOP: the role of the Senate is ‘advise and and consent.” That it is while the House enacts bills by simple majorities. But this is different, more like ‘despise and dissent’.
TB doesn’t ask you to believe him, but if you want to learn how insidious this is, read, “It’s Even Worse Than It Looks”, by Thomas Mann and Norman Orenstein, two recognized constitutional scholars. Here’s why:
- By blocking appointments to cabinet positions, including a ‘cabinet secretary’ that was stalled for over six months, the president is unable to act – even on laws that Congress has passed, such as the consumer protection agency. Note his first pick for this was Elizabeth Warren (blackballed by Jamie Dimon’s might and has now come back to haunt the GOP as she is now one of them!), and then former Ohio attorney general, Richard Cordray, who finally was approved. Note that the GOP said they weren’t opposed to Cordray, but would not approve him or anyone because they felt it had too much power…given to it by Dodd-Frank, but violently opposed by the big banks who created the crisis. Talk about un-American
- the Senate has precious little time and this is not only tying their hands but circumventing the minority’s power to get anything accomplished…but that is there objective, right?
True, the Dems used this in the first Bush administration to block judges they deemed to conservative in fear that they would push the law more to the right. The GOP is doing that now, but differently. The Dems did not filibuster nominees for cabinet positions!
But then there was an accord that unless there were serious character reasons neither side would prevent a nominee from having an up or down vote…it worked until the GOP became the minority. It was worked out by the two party leaders, one of whom was Mitch McConnell who has damned Harry Reid for doing the same as he wanted. In fact, both he and Sen. McCain wanted to end the use of the filibuster…until it served their purposes.
This is what appalls and disgusts. It is as if the GOP read the statements of the Dems and the Dems those of the GOP and even when those are played back for them on the talk shows they deny it.
Then there is the diversion of Sen. Orin Hatch and House Speaker Boehner that the Dems are merely creating a diversion to ‘Obamacare’ (note they never refer to it as ACA). Horse pucky! Sure the Dems would like the constant news to go away, but this is not how they would do it. This is total frustration caused by a breach of promise by those who created it. Meanwhile, the American people suffer.
Now onto the misuse of statistics. Figures lie and liars figure. Both sides have misrepresented statistics to strengthen their case but the only one who has brought up the term cloture is McConnell. He loves to use cloture and filibuster as interchangeable which they are not!
Cloture is a power given to the Majority Leader whenever it appears that a filibuster will occur. It effectively tables the topic. The purpose is to save valuable time for pressing legislation. What the GOP has done is to merely whisper a filibuster and Reid (who is not a great leader but to say he cannot control the Senate is to say the same about Speaker Boehner – to TB both are ineffective…neutered by the minority). McConnell must go. He is a cantankerous old man trying to remain in office…the same goes for Hatch who only has to see what his party did to fellow conservative, Bob Bennett by ‘primarying’ him out of office. Thus they all live in fear and that brings us to the problem:
The parties…both of them…have far too much control over the elected representatives of the people. The GOP – and to a lesser extent – the Dems, have total control due to our closed primary system in most states. That needs to change or as the authors said: it’s even worse than it looks.
Make up your own mind but if you want change you had better do it fast. For republicans, unless they can obfuscate through their message on the ACA, they are doomed. Before you call TB a bleeding heart liberal, note that he was a registered republican – a fiscal conservative (now outlawed by the party…you have to be ideologically conservative on all issues).
So if you believe that reducing government to ‘fit in a bathtub’ is the answer, that is your prerogative, but you had better be prepared for the consequences. The GOP is doing its best to make it nearly ‘all ex-clusive’ as it pulls in money from a few greedy billionaires while garnishing the waning support of the middle class which was historically its base.
Lastly, all you Jamie Dimon/JPM/C/BofA/WFC – not to mention the two faux banks, GS/MS – enablers and the mortgage companies, take a look at this and let’s put penalties (sic) in perspective…shall we?
Do you want this kind of country for your children? If so, TB pities you…and them.
Have a great week and don’t be a ‘turkey’!