1/16/14…earnings don’t kill investors, revenues kill investors!

Quote of the Day from the Friars Club Encyclopedia of Jokes: “The trouble with the average family is it has too  much month left at the end of the money.” – Bill Vaughan…so true…so true!

Bloomberg Quote of the Day: “You always pass failure on the way to success  – Mickey Rooney – those were my favorite classes…pass/fail…if only you could take them in your major!

Bloomberg Top Stories:

*Consumer Prices Rose 0.3% in December; Core +0.1%

*Goldman Earnings Decline Less Than Estimated as Stock Underwriting Gains – net income down 19%, BUT net revenue down 4.9%!!! That folks is called cost-cutting…fewer jobs, lower bonuses! Beat est’s!

*Goldman Sachs Reduces Pay Ratio to Its Second-Lowest Level as Public Firm – don’t you get it?

*Citigroup Profit Misses Estimates as Bond-Trading Slump Slows Turnaround – aw…poor things!

*Dollar Strengthens to Four-Month High; Bonds Gain as Gold Falls, Gas Rises – not a good thing!

*Pound Seen Ending 6-Month Jump as Carney Secures Recovery: Market Reversal – our turn now!

*Best Buy Holiday Sales Fall as Prices Fail to Draw Shoppers; Shares Slump – sorry, predictable!

*Emerging Markets Dodge Fed Tapering as Bond Sales Surge to $1.5 Billion – just like junk, too rich!

*BlackRock’s Profit Increases 22% as Assets Increase on Stock-Market Rally – and the indicdes rose???

*HP Executives Will Be Asked Soon for Data on $9 Billion autonomy Writedown – where does it end?

*Canada Frustrates Foreign Investors WithIts ‘Calvinball’ Wireless Policy – like Billyball?

*Yahoo’s Mayer Is Said to Have Fired Operating Chief Castro After 14 Months – sorry, your fault!

*Inflation Failure Embraced as Colombian Bonds Avoid Selloff – who would buy them…not TB!

*Tennis Quant Doubles Money Using Algorithms Without Knowing Who’s Playing – like the High Freaks!

*Egyptian Constitution Wins More Than 90% Backing, unofficial Results Show – Why? Muslims boycotted!

*Fort Lee Development Worth $1 Billion to Be Examined in Lawmakers’ Bridge Probe – plot thickens!!!

*Federal Contracts Slump to Reagan-Era Pace Amid Congress Spending Battles – some stimulus GOP!

*Russia Sees Syrian Peace Conference Extending to Several Rounds in Geneva – so they can sell more?

*Hospital Bills for Baby Deliveries Swing by Thousands in a ‘Random’ Way – price-fixing?

Wednesday’s Market Summary:

Ok, Ok, TB hears your chortling but while the Dow didn’t put in a new record high (for a week it has encountered resistance at 16,500), the S&P did! So take that TB. Ah, but a funny thing happened on the way to that record…an apple for your thoughts…ok and Microsoft. Since S&P won’t tell us the weightings…remember this is a cap weighted index…AAPL and MSFT combined for more than HALF the gain on the NDQ 100…16 of 29 index points! So think how much they added to the S&P? More on this later…perhaps you will see why TB provides you with FIVE days of returns instead of focusing day to day.

The S&P (+0.5%), underperformed even the slow-going Dow yesterday (+0.7%), while the two Nasdaq indices each rose 0.8%, and the Russell 2000 +0.7%, so they were last following Dow Transports +0.6%. Wonder what S&P would have looked like with out its two stellar performers? Have to ask S&P!

Never stand in front of a moving train…but also, and even more importantly, don’t try to jump on one that is moving fast! Especially when it could negatively impact your entire year…disagree? You decide!

NYSE Volume continues to yo-yo and is back to 3.75B shares (now the highest since 12/20) vs 3.33B 3.57B vs 3.33B vs 3.56B vs 3.63B shares – highest since December 20th! Real NYSE Volume also reverted but not so much 718M shares vs 650M vs 734M – highest since 12/20 vs 669M vs 697M vs 759M –  highest and first time above 700M since 12/20!  

See commentary for more on AAPL and MSFT…and indices:

Advance/Declines and Breadth were both strong for a second straight session. The VIX, however, was unchanged at 12.28???, this a day after it  plunged 7.5% to 12.28 -1.00 with a range of 11.96-12.90…low end Weds. was 11.91, lowest since 12/26! A warning flag? – you decide…

The Nasdaq 100 gained just 29 points more than half coming from AAPL and MSFT, vs +68 points!!! vs -52 points!!! vs +12.5 vs -15 vs +10 vs +31 vs -12 vs -25 vs -28. Breadth was modestly positive +7:3 vs +9:1 vs -7:1!  Just SIX members gained more than one index point!!! While one lost a point! The outright winners were APPL +8.8!!! vs +8.5!!! vs +1.3 vs -2.8 vs -5.6!!! vs +2.7 vs -3 vs +4.4 vs -9.7!!!;  MSFT +7.3!!! vs +5.9! vs -7.8!!! vs +3.8 vs -1.7 vs -4.8!!! CSCO+1.8; QCOM +1.7; NTAP/EBAY +1; REGN -1 vs +2.7. Note that most of the others have not been ‘leaders’ of late.

Dow 30 +0.7% vs +0.7% vs -1.1%! vs +0.1% vs -0.1%; Dow Transports +0.6% vs +1.3% vs -1.4% vs +1.2% vs +1%; Russell 2000 +0.7% vs +1.3% vs -1.4% vs +0.5% vs +0.1%; Dow Utilities -0.1% vs +0.1% vs -0.9% vs +1.3%!?! vs +0.7%; S&P 500 +0.5% vs +1.1% vs -1.3% vs +0.2% vs –; Nasdaq Composite +0.8% vs +1.7%!!! vs -1.5%! vs +0.4% vs -0.2%; NDQ 100 +0.8% vs +1.9%!!! vs -1.5%! vs +0.4% vs -0.4%.

*NYSE Volume reverted again to 3.75B shares vs 3.33B shares vs 3.57B vs 3.33B vs 3.56M vs 3.63B vs 3.48B vs 3.23B vs 2.76B. 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 rose and was over 700M for only the third time since 12/20 at 718M shares vs 650M vs 734M shares!!! vs 669M vs 697M vs 759M!!! The 12-month low is 272M on 12/24. The average since 12/20 is up to a still weak 595M shares with a high of 759M! The 12 month is 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 spiked to 515 vs 281 vs 351 vs 411 vs 435 vs 355 vs 316 vs 271 vs 217 vs 201! Recent high is a super-strong 890!!! New lows were stable at a weak 37 vs 36 vs 50 vs 30 vs 44 vs 30 vs 20 vs 30 vs 23 vs 43 vs 78 vs 72 vs 76 vs  60 vs 44 vs 68 vs 81 vs 127 vs 131. Recent high is 353; low 20!!!  

Advance/Declines were positive: +1.9x vs +2.4x vs -2.5x vs +2.5x vs +1.1x (recent range -17.5x to +6x) on NYSE and +1.9x vs +3x! vs -2.6x vs +1.4x vs -1.1x (recent -4x!!! to +3.8x). Breadth was similar: +2.3x vs +3.8x! vs -4.3x!!! vs +2x vs -1.03x (recent -18.6x!!! to +7.2x!!!) on NYSE and +2.6x vs +4.1x!!! vs -3.1x! vs +1.4x (recent -12.8x to +6.5x).  

NYSE Financials +1% led by KBW Banks, vs +0.7% vs -1%! vs +0.1% vs +0.1%; BofA most active – per usual and +2.3%!!! vs +2%! vs -2%! vs -0.4% vs +1.5%!?!, gapped up on open and closed at $17.15 +.38 – session high $17.42 – highest since 5/10/10!!! Brokers +1% vs +1.1% vs -1.2%! vs -0.1% vs ; KBW Banks +1.4%!!! vs +0.5% vs -1.3%!!! vs -0.4% vs +0.7%; Nasdaq Banks +0.5% vs +0.5% vs -0.9% vs -0.2% vs +0.4%.

Volatility (S&P VIX) fell again to 11.81, lowest since 1/3/14 but couldn’t hold and had to settle for even at 12.28 but still near its lowest close and low since 8/5/13! From 13.31 with a high of 13.65 to 12.29 -.99 with a low of 11.96! It remains well below the 40/50 day (13.61/13.53) while the 200 day is 14.40. 12/26’s (TB’s birthday) 11.69 was lowest since 3/15/13!!! Recent high on 1/2 was 16.67! 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 lost for a second day following two days of nice rallies which were a result of Fridays WEAK payrolls which took them to lowest yields since 11/26/13, 10‘s 2.83% and the 30 yr 3.77%. Rallying overnight: 30 yr 3.79 +5/8 – high 3.97% on 12/31; the 10 yr 2.86% +5/16, recent high 3.03%! Long TIP 1.42 +5/8. The (record?) low of 0.36% was set on 4/5. The recent high yield: 1.64%! Libor update: 0.236% 3 mos,0.335%!!! 6 mos. BOTH at NEW record lows 0.236%!!! and 0.335% respectively!). Foreign bond yields lower, ex-Japan and Greece: Germany 1.78% -4; UK 2.82% -4 – recent high 3.03%!; France 2.45% -3; Italy 3.85% -1; Spain 3.73% -2; Portugal 5.25% -2; Greece 7.63% +3. Recent range 7.51%-12.57%. Japan : 0.67% +2. Yen slightly better at 104.28, recent range 103.59-105.44 last week, low since 10/1/08!!!

Gold slipped yesterday, two days after printing a high of $1258.00, highest since 12/11/13 and closed at $1238.70 -$7.10. Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!!  Recent high is $1375.40 back on 9/19. Psych levels: $1200 sup; $1300 res, with major sup at the 40 day ($1237!) and res now at the 50 day ($1253!). The 200 day is $1341. Overnight it is higher at $1242.10 +$3.80.

Crude closed strong – finally, at $94.17 +$1.84 with a high of $94.64, highest since 1/3/14. Last Thursday it fell to the lowest print since 5/2/13: $91.24! Note 12/27 was first time above $100 since 10/21! 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 is still below the three key m/a’s which are all major res: 50 day m/a ($95.74!!!), 40 day (95.86!), crossed!!! and the 200 day ($99.01!!!) – stopped falling and jumped yesterday – all 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 weaker at $93.79 -.40 with a high of $94.64 – now a double top and thus resistance!

Overnight markets:

Global equity markets little changed and mixed: UK +0.1% vs +0.7% vs +0.1% vs +0.2% vs +0.9%; France -0.1% vs +0.7% vs -0.2% vs +0.1% vs +0.8%; Germany -0.1% vs +1.4%!!! vs -0.3% vs +0.1% vs +0.8%; Japan -0.4% vs +2.5%! vs -3.1%!!! vs closed vs +0.2% vs -1.5%; Hang Seng +0.4% vs +0.5% vs -0.4% vs +0.2% vs +0.3% vs -0.9%; Korea +0.2% vs +0.4% vs -0.2% vs +0.5% vs -0.4%; India -0.1% vs +1.2%! vs -0.5% vs +1.8%!!! vs +0.2%. U.S. stock indices opening weker: DOW -61; SPX -3; NDQ -2; Dow Transports -50!

Some random thoughts:

…right Mr. LaPierre???

Do you recall that financial stocks peaked in 2007 way ahead of the stock market? …and what sector is going like a ‘house a’fire’ now? If you said ‘financials’ pick yourself a kewpie doll – if you know what that is! BofA soared 2.3% on earnings which is looking through the rear-view mirror and the insiders…well, they laugh all the way to the bank. The only source of sustainable earnings growth is REVENEUES!!! Write that down, it might save you a heap of money! This morning, Citi missed and Goldman beat the estimates and here is how they did it:

“Goldman Sachs’ fourth-quarter net income dropped 19% as the investment bank’s revenue from fixed income, currencies and commodities trading slumped, although results comfortably topped Street views.

Goldman posted net income of $2.33 billion, compared with year-earlier net income of $2.89 billion. Per-share earnings were $4.60, while net revenue fell 4.9% to $8.78 billion. Analysts polled by Thomson Reuters expected per-share earnings of $4.22 on revenue of $7.71 billion?”

TB won’t insult your intelligence by ‘splainin’ it to you…if you thought this was a good thing, there is no point…or hope: the only source of sustainable earnings growth is REVENEUES!!! Write that down, it might save you a heap of money! Sorry to be repetitive. Everyone should have a plaque bearing that message.

Back to Apple and Microsoft. Look at their returns:

AAPL: yesterday +2%; 12-months +12%…since peaking on 9/18/12? -14% annualized!

MSFT: yesterday +2.7%!; 12-months +40%!!!; since recent high on 8/7/12 +11% annualized

So where would the S&P have been yesterday without their stars? Dunno, but the equal-weighted S&P using the ETF: RSP was up 0.4%…oh and it’s 12-month return is 30.6%!!! vs the cap-weighted S&P +16.8% (all assume reinvesting dividends in the index). Meanwhile, the Nasdaq 100 would have been up less than 0.4%…again, you decide. For the 12-months NDQ is up 16.3%.  Figures lie, liars figure, go figure!

Also AAPL’s volatitity continues to amuse and amaze as it has obviously become a fave of the high frequency traders, closing up +2%! vs +2%! vs +0.5% vs -0.7% vs -1.2% vs +0.6% – it is it’s own market! Imagine how a ‘flash’ trader can manipulate even an index with just a few stocks? Think about it. TB prefers the odds in Vegas!.

Oh yeah, TB’s a perma-bear…forgot…well until we have a Congress that can act and do the people’s business, and stop enriching themselves, and a party that’s let a small minority run it and a few billionaires who pump money into those PAC’s  he will remain that way…no, not short the market…just leery.

Until the Supreme Court acts like adults and understands what free speech is…it is not pumping millions into negative advertising without disclosing who you are and as for corporations, as retired Justice Sandra Day  O’Connor put it: where in the Constitution does it say a corporation is a ‘person’? Dunno.

This has allowed people like the Koch brothers, and the newly rich Karl Rove to pump money into state…and even local campaigns…oops, not into…just pay for negative advertising and believe me, we will pay for it…dearly. Can you spell ‘duopoly’? No, not the game (Monopoly), which is even more fun! As TB said the other day…it’s good to be king!…especially if no one knows who you are…much safer that way.

Sorry folks, TB is disgusted with people who have no consideration for those less fortunate. Oh, and how they love to say “I did it myself” – not quite it was this great country that gave you the ability to make that money…especially entrepreneurs! What about the Russians, you say? What about them…if you have thugs to do your business you can do it anywhere…like New York, New York…the Mafia has done it for decades…and what gave them their start? We, the people…ok, them, the people who voted for Prohibition, ignoring the fact that it was the biggest source of revenue to the federal government…much bigger than the income tax at the time…as one reader wrote to TB after his ‘king’ piece…makes you be careful what your wish for…or hope your wishes don’t become reality, right?

Is this a great country or what??? Have a great day…we are over the hump…now if the debt ceiling is passed…give us a budget…please and stop bickering about abortion when the issue is unemployment!

TB

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