12/3/13…cyber this!

Today’s Joke of the Day from the Friar’s Club Encyclopedia of Jokes “The Supreme Court ruled against having a Nativity scene in Washington, D.C. This wasn’t for religious reasons. They couldn’t find three wise men and a virgin.” Ka-ching! Jay Leno

Bloomberg Quote of the Day: “Only those who dare to fail greatly can ever achieve greatly.” – RFK…sadly, it increases your chances of an assassination by malcontents.

Bloomberg Top Stories:

*Stocks in Europe Drop with S&P futures; Pound Rallies on Construction Data

*Cyber Monday Sales Soar to One-Day Record as Amazon to EBay Win Shoppers

*Yuan Presses Euro to Become World’s Second-Most Used Trade-Finance Currency

*Brazil Economy Shrinks More Than Forecast on Rising Interest Rates, Prices

*Mortgage Bond Losses Deepen in First  Down Year Since ’94 Amid Dual Threats !!!

*SAC’s Cohen Didn’t Know About Source of Dirty Tips, Analyst Tells Jurors – uh huh

*JPMorgan Joins Goldman Sachs in Winning Fed Approval for 2013 Capital Plan

*Commerzbank Offices Raided in Probe Over Tax Evasion Use of Life Insurance

*Microsoft Joins BofA Boosting U.S. Bond Sales in Euros to Most Since 2008

*Montreal Maine Railway Trustee Expects to Sign Buyer This Week – woo woo!

*Don Juan Forgotten as Spain Seeks Online Dating Assist From Russia’s Badoo

*Rich Kazakhs Revive Polygamy as Young Women Seek Options to Escape Poverty – TB has always had the utmost respect for any man who can live with more than one woman!

*Ukrainian Opposition Fails to Outs Azarov Government in No-Confidence Vote

*Asian Teenagers Top World in Tests for Math as U.S. Plasces 26th in Study – now if only they could master English and personal interactions

*Europe Poised for December Cold Snap as Gas Reserves Sink to Five-Year Low

*Biden Stresses Opposition to China Air-Defense Zone During Visit to Japan – DUH!

Monday’s Market Summary:

TB rightness on the markets continues as everything from growth stocks to small cap to REITS, and of course mortgages sank yesterday…except of course Transportation…which the less sign of economic strength there is manages to gain…can you ‘splain it to me, Lucy? Once again, the Dow shot up out of the chute but this time immediately nosedived, tried once again – but well-short of the record this time – then dove…and dove…until only the trades at the close lifted (sic) it off the session low but still made a five day low and nearly undershot 16k!

What about…volume? Still weak but also nearly DOUBLE the 12-month low established on Friday! Real NYSE Volume also surged from a 12-month low to a near average 657M shares from a pathetic 1.59B shares – a quadrupling and remember not what you want to see on a down session!

Friday’s goat, Dow Transports were the only winner, +0.3% vs being the loser, while the worst performer was the Russell 2000 small cap -1.2%!!!, then the aforementioned Dow -0.5%, closely followed by Dow Utilities, the Nasdaq Composite, and NYSE Financials, all -0.4%. The S&P 500 gave up 0.3% and the NDQ 100 0.2% – for a sort of honors!,

Note that daily highs on the Dow have been above 16k every day since 11/15! The number of up days since is 10 with now FOUR losing sessions, 11/19-20-29, and 12/2!

Can we hold on until 12/31, and if so, why???

Advance/Declines and Breadth were both negative after just two weakly positive sessions. New 52 week highs were nearly halved from a solid 560 to just 331 – lowest in 7 sessions, while new lows tripled to 108! vs 35 vs 64 vs 111 vs 111. VIX not only closed higher but soundly took out 14 closing at 14.23 +.53 – near the session high of 14.31, while the low was still 13.78. Remember TB’s warning about ‘13’!

Bonds tanked again in a ‘take no prisoners’ session, but still ‘safely’ below the high yields of August/November, the 3.92-3.93% levels!!! Gold not onl declined by $28 but traded at the lowest since 7/5, easily replacing last Monday’s $1226 with $1217.10. $1187.90 on 6/28 is the lowest since July 2010! Crude closed higher at $93.82 +$1.10, coming off a new low of $91.77 – lowest since June 3rd, and remains WEAK! The record high of $114.83, courtesy of JPM/MS/GS’s manipulation (not necessarily in that order was on 5/2/11), the low since on 10/4/11 was $74.95: $93.60 is the midpoint!!!

The Nasdaq 100 lost all of 7 points vs +17 vs +25 vs +18 vs +5.5 vs +19 by -2:1 vs 1:1 vs +7:3 vs +1.8:1 vs -1.8:1 vs +3.2:1 vs +6.6:1. Three members lost more than a point – all the usual suspects –  while only MSFT gained more than a point: APPL -3.9 vs +8.2!!! vs +9.9!!! vs +7.8!!! vs +3.2; CMCSA -1.4; GOOG -1.2; MSFT +2.4 vs +3.9 vs -2.2.

Dow 30 -.0.5% vs -0.1% vs +0.2% vs flat vs +0.1%; Dow Transports +0.3% vs -0.3% vs +0.6% vs -0.1% vs +0.3%; Russell 2000 -1.2%!!! vs +0.1% vs +0.6% vs +0.9% vs flat; Dow Utilities -0.4% vs flat vs -0.4% vs -0.9%! vs +0.1%; S&P 500 -0.3% vsw 0.1% vs +0.3% vs flat vs -0.1%; Nasdaq Composite -0.4% vs +0.4% vs +0.7% vs +0.6% vs +0.1%; NDQ 100 -0.2% vs +0.5% vs +0.7% vs +0.5% vs +0.2%.

*NYSE Volume nearly doubled to a still weak 3.08B shares from 1.59B – 12-month low vs 2.6B vs 3.27B vs 2.98B vs 3.05B. Since 11/11 the average has been just 3.0B shares – that is weak!!! The record high (?) is 4.82B shares on Q3 end of quarter while 11/29’s 1.59B is weakest of 2013, replacing 1.96B as the low). REAL NYSE Volume rose to a still below average 667M shares vs 474M (new 12-month low vs 482M (lowest since 7/3, a half day!) from a STRONG 828M vs 626M vs 607M (2.06B shares on the Sept. expiry was 3rd highest ever: 6/30/06 3.38B; 7/12/02 2.29B while Friday’s 474M is the new 12-month low). Since 11/11 the high has been 828M shares on 11/26 followed by 796M shares on 11/15, thus only two days with a ‘7’ or higher handle! The 12-month average is 720M 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. This year there have been just NINE 1B+ share sessions! There have been 38 800M+ shares in 2013: 16 up, 19 down, and now three mixed.

*New 52 week highs have ranged from 33-864. They fell to 332 vs 560 vs 602 vs 456 vs 540 vs 477. Recent high is a super-strong 890!!! New lows tripled to 108 vs 35 vs 64 vs 111 vs 111 vs 88.

  1. Advance/Declines were negative after two slightly positive sessions: -2.5x vs +1.2x vs +1.7 vs +1.3x vs -1.2x (recent range -17.5x to +6x) on NYSE and -2.5x vs +1.6x vs  +2.4x vs +1.8x vs +1.1x (recent -4x!!! to +3.8x). Breadth was similar: -2x vs +1.1x vs +1.7x vs 1:1 vs -1.2x (recent -18.6x!!! to +7.2x!!!) on NYSE and -1.4x vs +1.5x vs +2.6x vs +1.4x vs -1.2x (recent -12.8x to +6.5x).  
  2. NYSE Financials fell 0.4% vs -0.1% vs +0.4% vs flat vs -0.1%. BofA most active -0.6% vs -0.1% vs -0.3% vs +0.4% vs +1.1%, closing at $15.73 -.09, while last Monday’s new 12-month high was $15.98, highest since 6/1/10.. Brokers -0.1% vs flat vs +0.4% vs +0.1% vs +0.4%; KBW Banks -0.2% vs -0.1% vs +0.3% vs -0.3% vs +0.4%; Nasdaq Banks -1.2%!!! vs flat vs +0.7% vs 0.5% vs +0.8%.
  3. Volatility (S&P VIX) surged for a 2nd day breaking above 14, to 14.23 +.53, near the session high of 14.31!!! 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: 14.01/14.31/14.37!!! It peaked at 22.79 on 12/28/12…ytd the range is 11.05 (3/14) to 21.92 (6/24)!

Global stocks lower ex-Japan: UK -0.7% vs +0.3% vs -0.4% vs +0.3% vs -0.2%; France -1.8%!!! vs +0.1% vs -0.3% vs +0.5% vs +0.2%; Germany -1.3%!!! vs +0.1% vs flat vs +0.9% vs flat; Japan +0.6% vs flat vs -0.4% vs0.4% vs -0.7%; Hang Seng -0.5% vs +0.7% vs +0.4% vs +0.5% vs flat; Korea -1.1%!!! vs -0.7% vs flat vs +0.3% vs +0.3%; India -0.2% vs +0.5% vs +1.4%! vs flat vs -0.9%; U.S. stock futures lower: DOW -69; SPX -5.40; NDQ -5.

Bonds were hit hard again yesterday, especially mortgages but are slightly better overnight: 10 yr Treasury 2.77% +1/4 (recent range 1.63% to 2.99%), and the 30 yr range 2.67% to 3.92%, 3.84% +3/8. The long TIP is 1.54% +3/8. The (record?) low of 0.36% was set on 4/5. Recent high yield: 1.63%! Libor update: 0.241% 3 mos, 0.345% 6 mos. (both just above their new record lows!). Foreign bond yields lower ex-Greece (reverse of Monday?): Germany 1.72% -2; UK 2.81% -3; France 2.34% -3; Italy 4.07% -1; Spain 4.11% -4; Portugal 5.80% -8!; Greece 8.58% +4. Recently: 7.71% – 12.57%. Japan 0.62% +2.

Gold not only closed $28 lower but traded at $1217.10, lowest since 7/15 before closing at $1221.90 -$28.50! 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 ($1295!) and the 50 day ($1300), both still dropping. Major resistance at $1375, the 9/19 high. The 200 day is a distant $1389. Overnight it is little changed at $1222.60  +.17. One forward, two back?

Crude had a positive day two days following a new low of $91.77, lowest since 6/3!!! The record high of $114.83, courtesy of JPM/MS/GS’s manipulation (not necessarily in that order was on 5/2/11), the low since on 10/4/11 was $74.95: $93.60 is the midpoint!!! It closed at $93.82 +$1.10, with a session high of $94.08. 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 ($96.80!/98.06), both still dropping and major resistance! The 200 day ($98.46) is back above 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 slightly higher at $93.99 +.17 – still nothing to see here!

 

Some random thoughts:

How appropriate that 60 Minutes Charlie Rose interviewed Amazon’s amazing Jeff Bezos. It was an interesting interview with a very intelligent entrepreneur, who was not just ‘lucky’. Not only that but on the eve of ‘Cyber Monday’ (which incidentally set records for volume as opposed to the weak Black Friday sales of traditional retailers – note however that the big ones have their own websites!). After discussing the future of his company (shipments made by unmanned robots – sounds right out of Astounding Science Fiction but then so was Scientology, no?  Don’t get TB on that subject!

As usual, Charlie Rose asked thought-provoking questions:

Rose: What about all the companies that you have taken business from?

Bezos: that is what happens as new technologies replace old. (very similar to the theory of capitalism as ‘creative destruction’.

Rose: Aren’t you worried that will happen to Amazon?

Bezos: It will happen…I just hope it is after I am no longer living.

While discussing Amazon’s amazing growth, however, neither Rose or Bezos mentioned the most important issue: if the company’s efficiency is producing record sales and profits how come that growth should be subsidized by the taxpayers in the form of no sales tax on internet sales (except in states where they operate)? That is societal destruction! How so?

TB has discussed his epiphany when visiting Hershey, Pennsylvania. Driving past M&M Ave, Milky Way, etc. he thought: now this is Americana. That ‘illusion was shattered when he left town and less than five miles away was a humongous Wal-Mart! In other words, those people living in an idyllic town, could care less that they were taking jobs away from their neighbors by shopping with some of the greediest people in America (true, not to the degree of the insidious Koch brothers). A company  that steals income and jobs from average Americans.

Amazon, on the other hand, does it with the blessing of the federal government, however thanks to the Supreme Court’s refusal to hear a case against collecting online sales tax by New York, it may go away even if our bribed Congress fails to act! Why didn’t Bezos come out against this subsidy?

Why is TB in favor of collecting sales tax on cyber sales? Because of the damage it does to local businesses, local government, and most importantly to job creation. In an economy that has whittled down the good-paying manufacturing jobs, replacing them with service jobs which are increasingly being outsourced to foreign countries, the cost to cities and counties is formidable. One more strike against ‘capitalism’ which is anything but ‘free-market’ regardless of what Mr. Greenspan says.

Lastly, kudos to American Express for promoting Small Business Saturday again this year. The first year cardholders who registered received a $25 credit – per card, even if held by husband and wife if the numbers were different. Last year, they had it but didn’t hear about it so didn’t register. This year – and you had to watch for it – they did it again with a $10 per card credit (thankfully one of TB’s regular stores put out the word as it was not broadly announced as they have a dollar limit on how much they will rebate…obviously!

Have a great day as the Dow tumbles and may have printed a 16k plus print for the last time. A house of cards!

TB

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