1/2/13…TB Part 1417…summary of market returns

Quote of the Day from the Friars Club Encyclopedia of Jokes: “Among the things that money can’t buy is what it used to.” – Max Kauffmann…ka-ching!

TB Bloomberg Quote of the Day: “It is by acts and not by ideas that people live.” – Anatole France…y’see…live…as in bombings, muggings, murder, mayhem…

TB Bloomberg Top Stories:

*First-Time Jobless Claims in U.S. Decrease to the Lowest Level in a Month – it’s year end…capische???

*S&P 500 Index Retreats From a Record While Italian Bonds , Metals Advance – yawn

*Bonus-Boosting Rally In U.S. Banks Seen Fading After Best Year Since 1997 – told you

*U.S. Consumers in 2013 Most Upbeat Since Pre-Recession in Bloomberg Index –stocks!

*Buffett Seen Missing 5-Year Goal for First Time as Berkshire Lags S&P 500 – and it will continue to do so…because it rallied as stocks continued to fall in 2008! Suckers!

*SAC’s Cohen Seen as Focus for Biggest Insider-Trading Scheme – see they prosecute this because it is easier to prove while letting CEO’s that caused crisis go scot-free!

*U.K. Manufacturing Expansion Unexpectedly Cools as Export Demand Weakens – !!! – just realeased: U.S. Mfg Index FELL to 57.0 from 57.3 – wrong direction!

*JPMorgan Halts Latvia Dollar Clearing Amid Probe of transfers, Group Says

*Cheaper Hanoi Pork Shows Record Harvests (?) Ease World Food Cost – PR by ADM, Cargill or others by omitting how the poor in developing nations are worse off from it.

*World’s Richest Worth $3.7 Trillion Surge as Gates Beats Gambling Abelson – as Boesky said: it isn’t the money…its that you have to have more than anyone else!

*Palestinian Tycoon Pours Fortune Won Abroad Into Search for Peace at Home – this guy will probably be loathed by conservatives here just as they do George Soros!

*U.S. Northeast Storm Threatens Blizzard Conditions, Disruptions to Travel

*Kerry Seeks Peace Blueprint to Sustain Troubled Israeli-Palestinian Talks

*Car Bomb Explodes in Hezbollah Stronghold in South Beirut, Al Manar Says

*Putin Calls for Increased Security Across Country After Vogograd Bombings – you couldn’t bribe TB to go there AND we should have boycotted them…all propaganda!   Tuesday’s Market Summary: 2013 looked as if it would go out with a whimper, but instead it was with a ‘pop’ – not a ‘bang’ mind you as the Dow struck another new record high, 16588.25, a ‘Heinz 57’ points higher – it’s 7th in eight sessions, and a record high close of 16576.66 – 97 points above Monday’s ‘new’ record close. If you were watching and missed it, don’t feel bad as, after gapping up on the open and creeping higher it plateaued for 3-1/2 hours, quickly gave back most of the gains and then…and then…in the final half hour jumped 55 points, almost vertically, to the session high and then had a modest taper into the close. As for volume, real NYSE Volume (can’t get total volume on a minute by minute basis but it would have been similar and proportionately higher at the close), also it would have been the lowest of the week but rocketed higher by 90 million shares in the final 20 minutes, 50 million at the close as indexers restored their mix (note that similar moves occurred beginning a week ago Friday on options expiry (also 90 million). Too bad they couldn’t have closed early like on Christmas Eve, but needed to stay open for the IRS. Should auld rallies be forgot…and never brought to mind? NYSE Volume rose slightly again to a still weak 2.3B shares vs 2.27B vs 2.04B vs 1.97B vs 1.3B – a 12-month low of Christmas Eve’s shortened session. REAL NYSE Volume was up again but remains very weak. Since 12/20’s expiry the average has been just 460M shares with a high of just 611M shares slightly to a still weak 462M shares vs 424M vs 421M – second lowest in last 12-months following Tuesday’s 12-month low of just 272M – compare and contrast to the 12 month average of 720M shares! TB took his own advice and relaxed with a friend, occasionally glancing at the screen with a nice Bloody Mary – Lefty O’Douls, of San Francisco fame is the best ever! All indices rose from 0.3% (Dow Utilities and the Russell 2000) to 0.7% (Dow Transports), while Apple aided the S&P 500 and the two Nasdaq indices – hit had been dicey since hitting a record high on options expiry of $570.09, and closed the year at $561.02 after losing ground every day since hitting the high…as Apple goes… Breadth and Advance/Declines were positive on both NYSE and Nasdaq.

The VIX, HOWEVER, rose pretty dramatically, and should be a precursor of January as it gained .46 to close at 14.02! This following Monday’s 1.09 surge!!! Note the range: 13.38-14.35 – and this on a day the market rallied…show me your ‘put’ offering levels will you? …while I write ‘calls’ for you! That’s what it is saying and bodes poorly for January, no?

The Nasdaq 100 gained 22 points (5 from Apple and 12 from the next 8 members), vs +4 vs -11 vs +12 vs +3.4 vs +38 vs +32.5 vs -11 vs +40. Breadth was 3:1 postive, mostly puny gains. NINE members gained more than an index point, while just ONE lost, not even one point but a nothing 0.9: APPL +5.3! vs -2.6 vs -3 vs -2 vs +3.4 vs -3.4 vs -2 vs +2.5 vs -4.9; GOOG +2.8 vs -2.2; AMZN +2.2 vs -1.9 vs -3 vs +2.1; FB +1.6 vs -2.9 vs -3.8; MSFT/QCOM/BIDU/CSCO +1; AMGN -0.9…next was -0.25!

Dow 30 +0.4% vs +0.2% vs – vs +0.8% vs +0.4%; Dow Transports +0.7% vs — vs -0.2% vs +0.3% vs +0.4%; Russell 2000 +0.3% vs – vs -0.1% vs +0.1% vs +0.4%; Dow Utilities +0.3% vs +0.3% vs +0.2% vs -0.4% vs +0.4%; S&P 500 +0.4% vs – vs – vs +0.5% vs +0.3%; Nasdaq Composite +0.5% vs -0.1% vs -0.3% vs +0.3% vs +0.1%; NDQ 100 +0.6% vs -0.1% vs -0.3% vs +0.3% vs +0.1%.

*NYSE Volume rose slightly again to 2.3B shares vs 2.27B vs 2.04B, but from the 2nd lowest of the last 12 months: 1.97B; vs the 12-month low of 1.3B. The record high (?) is the 4.97B shares of 12/20/13 and Q3 end of quarter while 11/29’s 1.59B is weakest of 2013). REAL NYSE Volume also up slightly and remains well below average at 568M shares vs 462M vs 424M vs 421M, from the new 12-month low of 272M. The average since 12/20 is just 460M shares with a high of 611! The 12 month is only 720M shares. Last year there were just TEN 1B+ share sessions! There were 39 800M+ shares in 2013: 18 up, 19 down, three mixed.

*New 52 week highs have ranged from 33-864. They surged to 560 vs 346 vs 445 vs 659 vs 608. Recent high is a super-strong 890!!! New lows little changed again at 78 vs 72 vs 76 vs  60 vs 44 vs 68 vs 81 vs 127 vs 131. Recent high is 353; low is 35!  

  1. Advance/Declines were positive: +1.9x vs -1.1x vs +1.1x vs +1.2x vs +2x (recent range -17.5x to +6x) on NYSE and +1.4x vs -1.1x vs -1.1x vs +1.1x vs +1.6x (recent -4x!!! to +3.8x). Breadth was similar: +2.8x vs -1.1x vs +1.6x vs +2x vs +3.1x (recent -18.6x!!! to +7.2x!!!) on NYSE and +2.1x vs -1.1x vs -1.4x vs +1.2x vs +3x (recent -12.8x to +6.5x).  
  2. NYSE Financials rose 0.4% vs +0.1% vs +0.1% vs +0.3% vs +0.2%. BofA most active: +0.2% vs -0.8% vs +0.1% vs -0.3% vs +0.1%, closing at $15.57 +.03. 11/25’s 12-month high was $15.98, highest since 6/1/10. Brokers +1.2%! vs -0.2% vs -0.4% vs +0.5% vs -0.3%; KBW Banks +0.4% vs –0.2% vs -0.1% vs – vs +0.2%; Nasdaq Banks +0.1% vs -0.4% vs -0.2% vs -0.1% vs +0.1%.
  3. Volatility (S&P VIX) surged for a second day is above the 40/50 day and almost to the 200 day! Caution! The range was 13.38-14.35!!! Last Thursday’s 11.69 was lowest since 3/15/13!!! High for prior week was 16.67! It is back above the 40/50 day m/a’s: 13.59/13.54, while the 200 day is nearby at 14.41!!! The recent range is 11.83-21.01!!! It peaked at 22.79 on 12/28/12…ytd the range is 11.05 (3/14) to 21.92 (6/24)!

Bonds began the session slightly positive then plunged in two waves an hour ahead of their early close (2pm EST): 30 yr closed at 3.97 -1-1/8 – dangerously close to 4%, while the 10 yr closed at 3.03% -1/2! Long TIP closed 1.62% -7/8. Overnight they are up 1/8 or less, while the short-end is flat: 10yr 3.03% +1/64 (new range 1.63% to 3.03%), and the30 yr 3.96% +1/8 (recent range 2.67% to 3.97%). The long TIP is 1.61% +1/4. The (record?) low of 0.36% was set on 4/5. Therecent high yield: 1.64%! Libor update: 0.243% 3 mos,0.346% 6 mos. (both right on the record lows!). Foreign bond yields mixed with problem countries better: Germany 1.95% +2; UK 3.05% +3; France 2.56% +1; Italy 3.98% -6; Spain 4.00% -11!; Portugal 5.78% -11; Greece 8.04% -8 vs -2 vs -4 vs +15!!! vs -16 vs -11 vs -3 vs -11! Recently: 7.71% – 12.57%. Japan …0.73% –. Yen again at multi-year low…105.28…weakest since 10/1/08!!! Currently at that new low!

Gold came out of its ennui and dropped to $1181.40 – taking out the $1186 of last Thursday which goes back to 12/31/02 – but THIS IS A MULTI-DECADE LOW!!! It did come back to close at $1202.30 -$1.50 – at least it is above $1200. Recent high is $1375.40 back on 9/19. $1200 is sup/res, and $1300, psychological resistance with major res at the 40 day ($1248!) and the 50 day ($1266!) and falling! The 200 day is $1352. Overnight it is rallying and is now $12.16.90 +$14.50 with a high of $1228…dawning of a new bull market???

Crude also lost ground following two very narrow range sessions, closing at $98.42- .87 or -$1.90 in two sessions – with a session low of $98.15! This two days after the highest close and first above $100 since 10/21!. Last Wednesday’s low was $96.26, lowest since 12/3. On 11/27 it printed a new low of $91.77, lowest since 6/3!!! The record high of $114.83 was on 5/2/11, the low since on 10/4/11 is $74.95: $93.60 is the midpoint!!! Recent rally high and close are $110.70 and $110.53 respectively. It remains above the 40 day m/a ($96.00) and the 50 day (96.27), both major support! The 200 day is $99.01 – and now 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 being hit again at $97.76 -.66 with a session low of $97.54, lowest since 12/19! …well below the 200 day!

Overnight markets:

European equity markets weaker, Asia mixed, Korea slammed along with India…Japan still closed: UK -0.1% vs +0.3% vs -0.4% vs closed vs +0.2%; France -0.8% vs +0.5% vs -0.1% vs closed vs +0.1%; Germany -0.4% vs closed vs -0.4% vs closed vs +0.9%; Japan still closed vs +0.7% vs – vs +1% vs +0.1%; Hang Seng +0.1% vs +0.3% vs – vs +0.3% vs closed; Korea-2.2%!!! vs closed vs +0.5% vs +0.2%; India -1.2%! vs +0.1% vs -0.2% vs +0.6% vs +0.2%. U.S. stock futures getting hit to open the new year: DOW -31 (range 55); SPX -2.90 (6); NDQ -10 (8) –  trouble ahead??? U.S. stocks opening sharply lower…happy new year…suckers!

Some random thoughts:

TB has been working on the returns for 2013…the usual caveat remain: past performance is not an indicator of future performance…and volatility reigns supreme…right?

INDEX

December

4th Qtr.

12 Mos.

5 Yrs.

Dow Industrials

3.1%

10.2%

29.5%

16.7%

Dow Transports

2.3%

12.8%

41.3%

17.9%

Dow Utilities

0.7%

+2.7%

12.7%

10.4%

S&P 500

2.4%

10.5%

32.3%

17.9%

Nasdaq Composite

2.9%

11.1%

40.1%

22.9%

Nasdaq 100

3.0%

12.0%

36.9%

25.6%

Russell 2000

6.4%

8.7%

38.8%

20.0%

NYSE Financials

0.8%

7.1%

27.3%

13.5%

Gold ETF – GLD

-3.8%

-9.4%

-28.3%

6.1%

Sht Tsy ETF – SHY

-0.2%

0.0%

0.2%

0.9%

30 yr Tsy Bond

-2.0%

-2.5%

-7.8%

-1.1%

TIP ETF – TIP

-1.5%

-2.2%

-8.5%

+5.0%

All indices dividends re-invested in the index. Note that while the five year returns look good, that was coming off the crisis. The rally began in March 2009, when the equity indices bottomed, and then have surged unabated.

If you look at the past 5-3/4 years however the returns are diminished for equities: Dow +8.3% annualized; Dow Transports +9.7%; Dow Utilities +4.7%; S&P 500 +8.3%; Nasdaq Composite +12.4%; NDQ 100 +14.1%; Russell 2000 +11.1%; NYSE Financials +4.1%. Why is this important? Because the five-year gains will look even better on March 31, since stocks plunged from 12/31/08 to 3//6/09…the bottom for all indices!

If you look at the return on the S&P 500 from 3/6/09, currently it stands at 23.6%!!! – annualized, with re-invested dividends!!! From 2/27/09 to 3/9/09 it fell by 7% and from 12/31/08 an incredible 23.9%!!! – that in just over 2 months!!! Figures lie and liars figure…caveat emptor…hedge fund and other money managers will have a ball exploiting this!!!

Hope you find this a useful exercise…TB most certainly did!

Let’s get through today and tomorrow and have fun on the weekend…even if it is below zero in Minnesota today! TB

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