12/9/13…shut it down!!! Hopefully not!

Ben Franklin Quote: “Wine is proof that God loves us and wants us happy.” Drink up!

Joke of the Day from the Friar’s Club Encyclopedia of Jokes: “If her lips are on fire and she trembles in your arms, forget her. She’s got malaria.” – Jackie Kannon

Bloomberg Quote of the Day: “Minds are like parachutes. They only function when they are open.” – James Dewar…mine isn’t golden…more like lead!

Trend job creation rate is 193k in the last three months modestly above the 180k per month in the last six months. Jobless claims continue to improve. The unemployment rate dropped in November by the largest amount in 3 years. We currently project that unemployment will decline to 6.5% by end of 2014. Inflation remains subdued.  Consumer sentiment improved sharply in December and reached its pre-shutdown levels. Personal income declined slightly in October. “Core” retail sales increased in October and were led by gains at grocery, clothing and accessory stores. Home re-sales have averaged 5.23 million over the past 6 months, suggesting that the housing market is continuing to improve. New home sales improved sharply in October but the 6-month average was little changed. 6-month averages of ISM Mfg. and Non Mfg. survey have been increasing steadily over the past few months. Trade deficit narrowed in October. This  week’s economic calendar is fairly light. The highlight of the week will be the November Retail Sales (Thursday) and November PPI (Friday). We will also get October JOLTs Job Openings and October Wholesale Trade (Monday), November Treasury Budget (Wednesday), November Import & Export Prices and October Business Inventories (Thursday). Courtesy of Economics Advisory Service

Bloomberg Top Stories:

*Germany’s Industrial Production Unexpectedly Declines for a 2nd Month – DAX up???

*Emerging-Market Stocks Rise on Economic Optimism (sic) as Natural Gas Advances

*Swiss Authorities Urge Private Banks to Abide by U.S. Disclosure Deadline – !!!

*Sysco to Buy US Foods for $3.5 Billion Adding Specialty Meats to Desserts

*Fiat Said to Plan $12 Billion Investment for Made-in-Italy Luxury Vehicles

*Abe Gets Toyota-Hitachi Help in Japan Push for Wage Gains Exceeding Prices –Hello!

*American Airlines’ Value Seen Buoyed as CEO Parker Dodges Merger Pitfalls

*Banks Poised to Reduce Rate-Swap Trading as Rules Seen Cutting Revenue 45% – so why did banks/brokers rally on Friday? By this way this is the right thing to do!!!

*Adobe to Oracle Chasing Elusive Profit in $67.3 Billion Cloud Market

*Doctor Helps Grandma Die to Avoid Fate of 260,000 Japanese on Feeding Tubes – Hey, Grassley…what was it you said about the government killing grandma? Idiot!

*Budget Deal in U.S. Would Reduce automatic Cuts to Break Cycle Failure – ‘would’ is the operative verb here!

*Mandela Memorial a Tough Trip as Obama Limits Delegation from U.S.

*Back-End Errors at Obamacare Website Jeopardize Enrollment for Customers – groan…  

Friday’s Market Summary:

Never bet how the market will perform on a payrolls Friday. TB had posited that we may have seen the last 16k print on the Dow for the year…well it wasn’t as Friday’s high was 16,022, AND the close was 16,020. While the data was good…particularly manufacturing and construction hiring, the participation rate remains at a 35-year low! Also, the data was mixed indicated a growing…slightly…and fragile economy. What happens when the Fed really does stop tapering? Hmmm…won’t be pretty, right?

The best performer Friday was the Dow +1.3% (along with NYSE Financials)…but get ready…Dow Utilities took 2nd at +1.2%!!!, followed closely by the S&P 500 at +1.1% while Nasdaq and Russell 2000 were all up about 0.8%, while the ‘hot’ Dow Transports were weakest at 0.6%! A very strange brew!

Can’t wait for Friday the 13th – can you? Hey, this is no time to be superstitious, right? At least the final options expiry of 2013 is the following Friday!

NYSE Volume dropped to well below average as we have come to expect on any ‘up’ session to 3.13B shares vs 3.32B vs 3.6B vs 3.44B vs 3.08B and the 12-month low of 1.59B shares on 10/29! Meanwhile, Real NYSE Volume, also coming off a 12-month low of just 474M shares on 10/29 dropped to a well below average 671M shares vs 700M vs 756M vs 770M vs 657M.

Advance/Declines and Breadth were both positive for the first time in five sessions. New 52 week highs doubled to 326 vs 145 vs 153 vs 151 vs 331, while new lows dropped to a still high 149 vs 190 vs 126 vs 132 vs 108. VIX PLUNGED to 13.79 -1.29!!! Follow!

Bonds had minor gains but remain close to the highs of August and November: 3.92-3.93%! Gold closed slightly lower on an outside day but put in a new low of $1210.10! Remember Wednesday was a positive key reversal after printing $1210.80, lowest since $1187.90 on 6/28, the lowest since July 2010! Crude closed slightly higher four days after setting a new low of $91.77 – lowest since June 3rd! $97.65 +.27.The session high was $98.07, highest since 10/30! The record high of $114.83, courtesy of JPM/MS/GS’s manipulation (not necessarily in that order was on 5/2/11), while the low since on 10/4/11 was $74.95: $93.60 is the midpoint!!!

The Nasdaq 100 GAINED 26.5 points vs -5 vs -3.7 vs -2 vs -7 (would have been -16 if APPL hadn’t saved the day). Apple however did not participate in the joy, losing 6.4 index points and the only member to lose anywhere near one point while NINE added a point:  GOOG +3.1; MSFT +2.7 vs -7 vs +4.7 vs +2.4 vs +3.9 vs -2.2; INTC +2 vs +2.3; CSCO +1.9 vs -1.6; BIIB+1.3; GILD +1.1 vs +1’ MDLZ +1.1; AMZN +1    APPL -6.4!!! vs +2.4 vs -1.1 vs +12.3!?! vs -3.9 vs +8.2!!! vs +9.9!!! vs +7.8!!! vs +3.2

Dow 30 +1.3%! vs -0.4% vs -0.2% vs -0.6% vs -0.5%; Dow Transports +0.6% vs flat vs -0.4% vs -1% vs +0.3%; Russell 2000 +0.8% vs +0.1% vs -0.2% vs -0.5% vs -1.2%!!!; Dow Utilities +1.1%!?! vs -0.9% vs +0.2% vs +0.6% vs -0.4%; S&P 500 +1.1% vs -0.4% vs -0.1% vs -0.3% vs -0.3%; Nasdaq Composite +0.7% vs -0.1% vs flat vs -0.2% vs -0.4%; NDQ 100 +0.8% vs -0.2% vs +0.1% vs –0.1% vs -0.2%.

*NYSE Volume, as we have come to expect with a rally, dropped sharply to a well below average 3.13B shares vs 3.32B vs 3.6B vs 3.44B vs 3.08B vs 1.59B (12-month low). 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 also dropped to a well below average 674M shares vs 700M vs 756M vs 770M vs 667M vs 474M (new 12-month low) vs 482M (2.06B shares on the Sept. expiry was 3rd highest ever: 6/30/06 3.38B; 7/12/02 2.29B while monthends 474M is the new 12-month low). The average for the week was a relatively strong 713M shares. Since 11/11 the high has been 828M shares on 11/26 followed by 796M shares on 11/15, and five days with a ‘7’ or higher handle! The 12-month average is 721M shares. The average since 6/28’s 1.75B share day is just 695M 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, three mixed.

*New 52 week highs have ranged from 33-864. They doubled to 326? vs 145 vs 153 vs 151 vs 332 vs 560. Recent high is a super-strong 890!!! New lows slipped to 149 vs 190 vs 126 vs 132 vs 108 vs 35.  

  1. Advance/Declines were positive for the first time in five sessions: +2.6x vs -1.9 vs -1.6x vs -1.6x vs -2.5x vs +1.2x vs +1.7 vs +1.3x (recent range -17.5x to +6x) on NYSE and +2.1x vs -1.2x vs -1.4x vs -1.6x vs -2.5x vs +1.6x vs  +2.4x vs +1.8x (recent -4x!!! to +3.8x). Breadth was similar: +2.4x vs -2x vs -1.1x vs -2x vs -2x vs +1.1x vs +1.7x vs 1:1 (recent -18.6x!!! to +7.2x!!!) on NYSE and +1.8x vs -1.5x vs +1.1x vs -1.6x vs -1.4x vs +1.5x vs +2.6x vs +1.4x (recent -12.8x to +6.5x).  
  2. NYSE Financials rose 1.3%!?! vs +0.8% vs -0.1% vs -0.9% vs -0.4%. BofA most active up 0.8% vs -1.3% vs +0.6% vs -1.2%, closing at $15.56 +.13, 11/25’s 12-month high was $15.98, highest since 6/1/10. Brokers +1.6%!?! vs -0.6% vs flat vs -1%!; KBW Banks +1.4% vs -1%! vs +0.4% vs -1.1%! vs -0.2%; Nasdaq Banks +1.7%! vs +0.1% vs -0.1% vs -0.9% vs -1.2%!!!
  3.  
  4. Volatility (S&P VIX) dropped sharply after rising for FIVE straight session to 13.79 -1.29??? from the highest close since 10/15, while last Wednesdays session high was 15.71!!! and the session low was 14.22!! Two days prior it closed the gap down from 10/16-17!!! It is now just above the 40 day but below the 50/200 day m/a’s: 13.57/14.35/14.38!!! 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 It peaked at 22.79 on 12/28/12…ytd the range is 11.05 (3/14) to 21.92 (6/24)!

Global stocks flat to higher: UK – vs +0.5% vs +0.1% vs -0.5% vs -0.7%; France – vs +0.3% vs -0.1% vs -0.9% vs -1.8%!!!; Germany +0.4% vs +0.7% vs +0.1% vs -1% vs -1.3%!!!; Japan +2.3%! vs -0.8% vs +1.5%! vs -2.2%! vs +0.6%; Hang Seng +0.3% vs +0.1% vs -0.1% vs -0.8% vs -0.5%; Korea +1%! vs -0.2% vs -0.1% vs -1.1% vs -1.1%; India +1.6%! vs +0.2% vs +1.2%!!! vs -0.7% vs -0.2%. U.S. stock futures little changed in a very narrow range session: DOW +4; SPX +3.40; NDQ +11.25.

Bonds closed slightly higher after being pounded Wednesday and for the fourth time since last August when the ‘tapering talk’ began at  3.89% on the 30 yr while the 10 yr closed at 2.80% for the first time since hitting 3% on 9/5! The long end is slightly higher overnight: 10 yr Treasury 2.84% +1/8 (recent range 1.63% to 2.99%), and the 30 yr 3.88% +3/16 (recent range 2.67% to 3.92%). The long TIP is 1.60% +1/4. The (record?) low of 0.36% was set on 4/5. NOTE recent high yield: 1.63%! Libor update: 0.243% 3 mos, 0.342% 6 mos. (new low for 6 mo while 3 mo is just avoe the 0.236% record low!). Foreign bond mostly lower: Germany 1.83% +1; UK 2.91% +1; France 2.43% -1; Italy 4.15% -2; Spain 4.13% -4; Portugal 5.97% +3; Greece 8.69% -1. Recently: 7.71% – 12.57%. Japan 0.65% -1.

Gold closed slightly lower on a narrowly outside session after Thursday’s bizarre session falling $23 on an inside day which nearly obliterated Wednesday’s big gain. It closed at $1229.00 -$2.90. Friday’s low was $1210.10, lowest since 6/28. Recent high is $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 ($1287!) and the 50 day ($1293!), falling again. Major resistance at $1375, the 9/19 high. The 200 day is a $1382. Overnight it is slightly higher at $1232.00 +$3.

Crude had a 5th straight positive day six 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 $97.65 +.25 with a session high of $98.07, highest since 10/29! First time it has shown any 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 back above the 40/50 day m/a’s ($96.29!/97.57!), both major resistance/support! The 200 day ($98.51). 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 about even at $97.60 -.05.

 

Some random thoughts:

Not going to say much today…don’t want to jinx the budget talks (sic), after all nobody wants to shut down the government, right? Wrong! Let’s see if these bimbos (male and female variety) can do the right thing and work together for America. TB knows that is one ideological statement but without hope…

Have a great week!

TB 

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