Quote of the Day from the Friars Club Encyclopedia of Jokes: “I have noticed that nothing I never said did me any harm.” – Silent ‘Cal’ Coolidge and…
“Women like silent men. They think they are listening.” – Marcel Achard
Bloomberg Quote of the Day: “I am not my body. My body is nothing without me.” – Tom Stoppard
Bloomberg Top Stories:
*Bernanke Seen Unique Rescuing U.S. With Policies No Fed Chairman Embraced – see below for Alan Blinder’s take
*Fiat’s Profit Forecast Trails Estimates After Fourth Quarter Disappointed
*Turkey Increases Interest Rates to Shore Up Lira as Basci Defies Erdogan – ergo:
*Stocks Rise as Turkish Lira Strengthens on Rate Increase; Treasuries Fall – ??? and?
Then: U.S Futures Slump With Lira; Yen Gains as Emerging-Currency Rally Fizzles!!!
*Ruble Drops to Record Low Against Currency Basked Before Fed Rate Decision
*Dow Chemical Triples Share Buybacks as Profit Exceeds Analysts’ Estimates hmmm
*EMC Plans Job cuts After First-Quarter Forecast Misses Analysts’ Estimates
*Argentina Black Market Heats Up as Buyers Shun Government’s Dollar Offers
*Turkey Bribery Scandal Puts Jailed Millionaire at Center of Tail of Gold
*Income-Inequality Message Frames Obama’s Campaign for U.S. Senate Control
*Winter Storm Causes Gridlock in Atlanta as Cars Wrecked Across Deep South – !!!
*Merkel Cautions Against ‘Deceptive Calm’ as Euro-Area Crisis Risk Remains
*California Farms Going Thirsty as Worst Drought Ever Burns $5 Billion Hole
Tuesday’s Market Summary:
It looked better than it was but it was a second straight ‘dead gerbil’ bounce…thought maybe two sessions might at least produce a mini ‘dead cat’ bounce bu that was not to be. The Dow added over 100 points at the high – which was just THREE points above Monday’s high! This after losing 290 points on Friday…and well over 300 at the low! The S&P 500 was even worse with an ‘inside’ session (lower high and higher low than Monday! The Nasdaq Composite also had an inside session but even tighter. Meanwhile the NDQ 100 had a tiny range and almost a ‘lower low’, missing it by less than one point! Dow Transports which have been the worst performer over the past two sessions eked out a ‘minusculely’ higher high that was enough to make it the best performer (+1.1%. ok NYSE Financials were up 1.2%). Note that Transports were the only index that made it back above the 40/50 day m/a’s…19 Transports were up yesterday vs 17 down on Monday and all 20 on Friday. The Russell 2000 was +0.9% but its high and close were ONE point below even that minor benchmark.
Volume declined by 500M shares to an average 3.43B shares. It was worse for REAL NYSE Volume which plunged to 622M shares – lowest since 1/3/14 and 100M below average! Volume rises on selloffs and falls on ‘rallies’ – not an encouraging sign.
New 52 week highs remain weak but stable, while new lows went back to 71 vs 148. Advance/Declines and Breadth were both positive, especially for NYSE stocks. Volatility (VIX) declined for a second day to 15.80, still high but vs 17.42 vs 18.14 from 13.86.
Stay put until Groundhog Day…at least!
NOTE all major indices ‘crashed’ through both the 40 and 50 day m/a’s! Only Dow Transports are now ‘slightly’ above them…very slightly!
Apple and Microsoft continue to disagree: biggest loser on the NDQ 100 was an incredible 31.8 index points by AAPL while MSFT was in the middle of the pack at just +1.8 vs -5.8 index points! The NDQ only lost 3.3 points almost offsetting APPL with 3.5:1 members advancing.
Dow 30 +0.6% vs -0.3% vs -2%!!! vs -1.1!% vs -0.3%; Dow Transports +1.1% vs -0.8% vs -4.1%!!! vs +0.3% vs +1.4%; Russell 2000 +1.2% vs -1.4%! vs -2.4%!!! vs -0.9% vs +0.5%; Dow Utilities +0.5% vs +0.2% vs -1% vs –0.2% vs +0.1%; S&P 500 +0.6% vs -0.5% vs -2.1% vs -0.9% vs +0.1%; Nasdaq Composite +.4% vs -1.1% vs -2.2%! vs -0.6% vs +0.4%; NDQ 100 -0.1% vs -0.9%! vs -2%!!! vs -0.5% vs +0.3%.
*NYSE Volume plunged to an average 3.43B shares vs 3.99B vs 4.64B vs 3.98B vs 3.37B. 2014 low is 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 fell even worse to a well below average 622M shares (lowest since 1/3/14) vs 780M vs 919M vs 771M. It has been above 700M just eight times since 12/20! The 12-month low is 272M on 12/24. The average since 12/20 is 648M shares, still weak, vs 643M. The 12 month is still 721M shares. Last year there were just TEN 1B+ share sessions! There have been 41 800M+ shares since 12/31/12: 18 up, 21 down, three mixed.
*New 52 week highs have ranged from 33-864. They were stable at 75 vs 74 vs 81 vs 211 vs 440 vs 498. 74 is the recent low eclipsing 201! Recent high is a super-strong 890!!! New lows were halved to 71 vs 148 vs 110 vs 62 vs 46 vs 37. Recent high is 353; low 20!!!
Advance/Declineswere positive for first time in four sessions: +3x vs -2.8x vs -6.3x! vs -2x vs +1.8x (recent range -17.5x to +6x) on NYSE and +2x vs -3.4x vs -4.6x vs -2.2x vs +1.4x (recent low -4.6x!!! to +3.8x). Breadth was even better: +5.3x!!! vs -2.5x vs -13x!!! vs -3.2x vs +1.4x (recent -18.6x!!! to +7.2x!!!) on NYSE and +2.2x vs -3.9x vs -4.6x!!! vs -2.3x vs +1.7x (recent -12.8xto +6.5x).
NYSE Financials +1.2% vs -0.9% vs -2.5%! vs -1.4%!!! BofA most active again +2.6% vs -0.9% vs -2.4% vs -1.7% vs +0.8%. Closed $16.73 +.42. The high print was $17.42 on 1/15/14 – highest since 5/10/10!!!Brokers +1.4% vs -2.1% vs -2.4% vs -1.4% vs +0.3%; KBW Banks +0.9% vs -0.7% vs -2.6% vs -1.6% vs +0.4%. Nasdaq Banks +0.1% vs -1.1%! vs -1.5%! vs -1.2%! vs +0.6%/
Volatility (S&P VIX) declined to 15.80 from 17.42 and 18.14 on Friday’s surge. Just over a week ago it was at 11.81. 8/15’s close of 12.28 was 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 is now well above the 40/50 day (13.87/13.65) and the 200 day. 14.43. 12/26’s 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…the range since 12/31/12 is 11.05 (3/14) to 21.92 (6/24)!
Bonds were little changed ad still don’t seem to know what to do now with yields lowest since Oct/Nov. Weaker overnight: 30 yr 3.69% -1/4 – the high was 3.97% on 12/31; the 10 yr 2.76% -1/8, recent high 3.03%! Long TIP 1.39% -1/4. 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 or near NEW record lows 0.234%!!! and 0.332% respectively!). NOTE that the Fed Funds rate has averaged 0.08% since 5/22/13 and is currently 0.06%. Foreign bond yields mixed for a 3rd day: Germany 1.77% +1; UK 2.80% -1 – recent high 3.03%!; France 2.37% +1; Italy 3.83% -2; Spain 3.69% -1; Portugal 5.02%!!! -4; Greece 8.40% +6. Recent range 7.51%-12.57%. Japan: 0.63% +1. Yen slightly stable after rising to 101.77!!! on Monday. It is now 102.70. Recent range 101.77-105.44 last week – weakest since 10/1/08!!!
Gold declined yesterday, a day after an intraday $1280.10, highest since 11/18!!! It closed at $1250.50 -$13.00. 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 major sup/res now at the 40 day ($1234) and the 50 day ($1239). The 200 day is $1322 and major res. Overnight it is higher at $1258.80 +$8.30.
Crude had a good day closing at $97.41 +$1.69…Thursday’s high was $97.84, highest since 1/2/14. 1/14’s low was worst 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 now back above the 40/50 day m/a’s which are major sup/res: 50 day m/a ($95.70), 40 day (96.18), crossed!!! and the 200 day ($99.02!!!) – 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, slightly lower at $97.21 -.20.
European equity markets little changed, Asia doing better: UK +0.2% vs +0.2% vs -1.3%! vs-0.9% vs -0.1%; France -0.1% vs +0.4% vs +0.2% vs -1.5% vs –; Germany +0.2% vs +0.1% vs – vs -1.2% vs -0.2%; Japan +2.7% vs -5.1%!!! vs -2.5% vs -1.9% vs -0.8%; Hang Seng +0.8% vs -0.1% vs -2.1%!!! vs -1.3% vs -1.5%; Korea +1.3%! vs +0.3% vs -1.6%! vs -0.4% vs -1.2%!India -0.2% vs -0.1% vs -2%!!! vs -1.1%! vs +0.2% vs +0.4%; Earlier, U.S. stock futures little changed, then on Emerging Markets currency swoon it changed. Now: DOW -157!!! vs-5;SPX -17.50 vs -1; NDQ -36 vs -5!
Some random thoughts:
First, TB wants to call your attention to an incredible book written by former Fed Governor, Alan Blinder, After the Music Stopped, the most compelling account of the financial crisis from someone inside the circle and with the contacts to fill in the blanks. It isn’t trying to assess blame as much as show what went wrong…very wrong.
There was plenty of guilt to go around…even to those who did their best…and he understands the frustration…haven’t finished it yet but hope he focuses on the fact that without the greed there would have been no crisis…if, that is, the regulators had done their job and the right ones were regulating companies like AIG. Well done, Alan!
Blinded by the SOTU last night? Certainly not ‘blind-sided’ – nothing to see here! Obama is beginning to sound like Chris Christie…the ‘I’s have it! So much for that great song from Chicago, which says: “I can’t do it alone…” Yes, I can!
It was another feel good speech peppered with anecdotes about ordinary Americans doing wonderful things. Obama kept the standing ovation for Ranger Corey Remsburg…had to be a record…and must have been very awkward for him…one who paid the price.
The only other thing of note was John Boehner…the great stone face…he was so partisan he couldn’t bring himself to applaud even the new things the GOP is trying to do with immigration, and the wealth gap. Worse was a grimacing Eric Cantor…he makes TB ill.
Only a blind person cannot seen the problems caused by the wealth gap…if you don’t see it, pity. Don’t let the GOP fool you by talking about the top quintile…as TB said, it isn’t them…or the top 10%…or the top 1%…or even the top 0.1% that are the issue…it is the top 0.001% and those are mostly Wall Streeters! Furthermore, a 60 Minutes story Sunday highlighted an educationial jobs program for underprivileged youth…a great program. One problem: it is primarily sponsored by the financial sector!!! In fact, those were the only ones I heard: JPM, AmEx, etc…why? Because the emphasis was on getting these kids GOOD PAYING jobs…and those were all that they found…think about it! Also, Jamie Dimon was talking soooo sincerely about how he wants to help them…hmmm.
As for the long-awaited GOP rebuttal…it was all about ‘making nice’ to the American people…we will cut your taxes…ok, not as much as the guys at the top but still you will be better. Reminds me of the famous headline when Carter was negotiating with Mexico over oil: El Presidente Carter Queire Exchanger Cachuetes (peanuts) for Petroeo (Oil).
After a series of incredibly dumb or antagonistic rebuttals at least this one was friendly – to the people that is- but rebuttal??? What rebuttal??? We are the new GOP out to help you…forget about how we only cared about the wealthy before.
Representative Cathy Morris Rogers (R-WA) gave it…and beautifully…as a woman and a mom…but what did she rebut? Nothing…absolutely nothing. Don’t mean this wrong but does anyone recall Nixon’s ‘Checkers’ speech?
GOP if you are going to win the hearts and minds of the people you too are going to have to do more than give ‘feel good’ speeches….but at least this is a step in the right direction…baby step…
Have a great day!