2/10/14…those big ‘O’ rings

Quote of the Day from the Friars Club Encyclopedia of Jokes: “Generally speaking, I look upon sports as dangerous and tiring activities performed by people with whom I share nothing except the right to trial by jury.” – Fran Lebowitz –even ice dancing?

Bloomberg Quote of the Day: “The difference between ordinary and extraordinary is that little extra.” –Jimmy Johnson, thanks Jimmy but isn’t giving 110% an oxymoron?

Bloomberg Top Stories:

*Stocks in U.S. Fall After Weekly Advance as Investors (sic) Await Yellen Report

*Icahn Backs Down on Apple $50 Billion share buyback as Company Near Target

*Barclays Earnings Decline Greater –Than-Estimated 26% on Compensation Costs

*McDonald’s January Sales Beat Analysts’ Estimates on International Gains

*Two Goldman Sachs Managing Directors Join Citadel in Hedge Fund Migration – !!!

*Traders Crying Over Emerging-Market Currencies Losses Miss HSBC’s Bargains

*Birinyi Sees S&P 500 Hitting 1,900 by July as Bears Stay Away From 6% Drop – bet?

*Chrysler Pays UAW Trust $5 Billion in Final Payment to Conclude Bankruptcy

*Australia’s 116 Years of Carmaking Will End in 2017 as Toyota Joins Exodus

*Puerto Rico Junk Grades Spur $13 Billion Barclays Index Shift

*Apple Wooed by Arizona Incentives as Obama Seeks U.S. Manufacturing Boost

*Alwaleed’s Kingdom Beats Buffett’s Berkshire on Twitter, Four Seasons Bets

*Swiss Brace for Sour EU Relations After Voters Support Immigration Curbs

*De Blasio’s NYC Budget Boosted by $4 Billion Surplus as Unons Seek Deals

*EU Anti-Immigrant Parties See Momentum in May Ballot in Swiss Limits Vote

*Syrian Factions Will Attempt to Move Beyond Insults as Geneva Talks Resume   

Friday’s Market Summary:

Another day, another rally? Sort of…but it was surprising…especially after the WEAK payrolls for a second straight month…oh yeah we created over 600K household jobs. Got that? Believe that? Have you ever seen the survey? Of course not. In fact TB has never met anyone that is part of that survey. Anyway, here is the question: did you work for at least ONE hour during the past month…even if it wasn’t PAID? Think about that and decide the value of the household survey. True, miraculously, through ‘benchmark revisions’ they come out very close over time…but? Really, a one-hour a month job that pays nothing! Go collect unemployment or welfare! Oh, you already tried that! Oh, and try to explain that to someone who has ‘worked’ hours, putting out resumes that go unanswered or come back as ‘rejection slips’. Now, THAT is a basis for a rally (think: dog bites man)…NOT!

Still it was a rally, and while it didn’t even bring the Dow back to 16k – which is MAJOR RESISTANCE, and is still not even halfway back to 16500 – or anywhere near the 40/50 day moving averages (16101-16129), it is a step in the right direction, okay a ‘baby step’.

But such is the nature of rallies…you never know when they are faux or real…or for that matter ‘over’ – or as Yogi would say, “it’s not over until it’s over”, (or when he was less politically correct: “until the fat lady sings.”). It was what it was…and judging from the mixed overseas markets, today, it will be a tough act to follow.

It was the FOURTH straight ‘up’ day back from below the 200 day m/a (for three days!). That should be enough to make the ‘bears’ nervous…or did they just overcome that with the rally? Dunno, but we are in ‘no-man’s’ land – neither fish nor fowl. Still that 166 point or 1.1% rally by 29:1 was nothing to sneeze at – although heavily strong Advance/Declines (S&P 68:1; Transports 3:1, NDQ 100 10:1; Russell 2000 2.5:1 – note that the narrower the index (or less noteworthy), the smaller the rally)!

Volume was a solid 3.74B shares although the volumes have been lower than on the big swoon. Real NYSE Volume for a THIRD day (coincides with the rally) was in the mid-700’s – again, not of the 800-900M of the selloff but still above the 723M share average.

Advance/Declines and breadth were strong, but again, new 52 week highs while rising to 132 from 92 remain WEAK by any standard, while new lows plunged again to 48 from   an average 72…recent low is 20! Here is the scoreboard (note 3mo and 12 mo updated thru last Friday):

 

Index

February

YTD

3 mos.

12 mos.

Returns

Mo. to date

2/5/14

2/7/14

2/7/2014

Dow 30

+0.6%

-4.7%

+0.2%

+12.9%

Transports

-0.6%

-2.1%

+3.2%

+22.5%

Dow Utilities

-0.5%

+2.7%!!!

+0.3%

+6.2%

S&P 500

+0.8%

-2.8%

+1.5%

+18.4%

NASDAQ Comp

+0.5%

-1.2%

+5.3%

+29.2%

NDQ 100

+1.1%

-0.8%

+5.8%

+28.3%

Russell 2k

-1.3%

-2.6%

+1.9%

+19.1%

NYSE Fin

+1.1%

-3.2%

-0.1%

+12.3%

 KBW Banks

+0.7%

-2.2%

+2.8%

+23.2%

 NDQ Banks

-1.2%

-5.4%

-1.0%

+22.7%

Note that despite the improvement only Dow Utilities are positive, year-to-date. Also, comparing to 2013, serious damage has been done to returns for the majors. It could be a very long year. A defensive play into utilities may not have been a bad way to start 2014.

Detailed analysis:

Dow 30 +1.1$ vs +1.2% vs – vs +0.5% vs -2.1%; Dow Transports +0.8% vs +1.5% vs -0.8% vs +1.2% vs -3.2%!!!Russell 2000 +1.1% vs +0.9% vs -0.8% vs +0.8% vs -3.2%; Dow Utilities +0.7% vs +0.8% vs -0.5% vs -0.5% vs -0.9%; S&P 500 +1.3% vs +1.2% vs +1.2% vs -0.2% vs +0.8% vs -2.3%!Nasdaq Composite +1.7%! vs +1.1% vs -0.5% vs +0.9% vs -2.6%; NDQ 100 +1.8%! vs +1.2% vs -0.4% vs +0.9% vs -2.3%.

*NYSE Volume was steady but still well above average at 3.74B shares vs 3.8B vs 3.97B vs 4.04B vs 4.7B vs 4.04B. The 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 was slightly higher at a still above average 763M shares vs 743M vs 755M vs 837M vs 922M vs 952M (highest since 12/20).  622M was lowest since 1/3/14. It has been above 700M fourteen times (superstitious?) since 12/20! The 12-month low is 272M on 12/24. The average since 12/20 is still just 685M shares. The 12 month is 723M shares. Last year there were just TEN 1B+ share sessions! There have been 45 800M+ shares since 12/31/12: 19 up, 23 down, three mixed.

*New 52 week highs have ranged from 33-864. They were higher at a still weak 132 vs 92 vs 53 (a new recent low!) vs 56 vs 91 vs 135 vs 162. Contrast to 440 and 498 last month. 53 is the recent low, which had been 201 during the rally days! Recent high is a super-strong 890!!! New lows were sharply lower at 48 vs 72 vs 162 vs 120 vs 216 vs 135 vs 70. Recent high is 353; low 20!!!  

Advance/Declineswere solid: +3.4x vs +3x vs -1.4x vs +2.1x vs -5.6x! (recent range -17.5x to +6x) on NYSE and +2.4x vs +1.9x vs -2.2x vs +1.7x vs -6.1x!!!(recent low -6.1x!!! to +3.8x). Breadth was even more so: +4.6x! vs +3.8x! vs -1.4x vs +2.8x vs -16.2x!!!(recent -18.6x!!! to +7.2x!!!) on NYSE and +5.5x!!! vs +3.2x vs -2.2x vs +2.2x vs -9.6x!!! vs -1.5x (recent -12.8xto +6.5x). 

NYSE Financials +1.1% vs +1.4% vs +0.1% vs +1.1% vs -2.5%! BofA most active: +2.3% vs +1.9%? vs +0.5% vs  — vs -2.5x! vs -1.1% vs +1.5%. Closed $16.82 +.13 (reminds me of GE back in the day…solid range made it easy to day trade in big volume with little risk – i.e. perfect for ‘high freaks’! The high print was $17.42 on 1/15/14 – highest since 5/10/10!!!Brokers +1.2% vs +1.4%! vs -0.9%! vs +1.6% vs -3.6%!!! KBW Banks +0.8% vs +1.7% vs -0.1% vs +1.2% vs -2.7% vs -1.3%.Nasdaq Banks +0.2%? vs +0.8% vs -0.4% vs +1.3% vs -3.1%! vs -1.3%. Where is big ‘mo’?

Volatility (S&P VIX) plunged again to a still ‘slightly’ elevated 15.29 -1.94. Contrast to 1/31’s high of 21.48 highest since 6/24/13! Look at the 40/50 day (14.63/14.44 – crossed!) and the 200 day, 14.54. 12/26’s 11.69 was lowest since 3/15/13!!! The recent range is now11.83-21.48!!! 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 closed little changed and mixed after three weak sessions. Still around mid-Oct. levels, when the storm hit. Slightly weaker overnight: 30 yr 3.68% -3/16 – the high was 3.97% on 12/31; the 10 yr 2.69% -1/16, recent high 3.03%! Long TIP 1.40% -3/16. The (record?) low of 0.36% was set on 4/5. The recent high yield: 1.64%! Libor update: 0.234% 3 mos,0.329% 6 mos. – ANOTHER NEW RECORD LOW! BOTH at NEW record lows 0.234%!!! and 0.331% respectively!). NOTE the Fed Funds rate has averaged 0.08% since 5/22/13 and is steady at 0.06%!!! Foreign bond yields slightly higher, ex-Greece: Germany 1.68 +2; UK 2.73% +2 – recent high 3.03%!; France 2.26% +2; Italy 3.69% +1; Spain 3.57% –; Portugal 4.91% +1; Greece 7.48%!!!! -12!!! AND a NEW low taking out7.51%!!! High was 12.57%. Japan: 0.60% -1. Yen little changed at 102.19 but still near 100.79, 2/4/14’s low. Recent range 100.79-105.44-weakest since 10/1/08!!!

Gold closed modestly higher at $1262.90 +$5.70. Last Thursday’s session low was $1237.50, lowest since 1/23! Monday’s intraday high was $1280.10, highest since 11/18!!! 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 the 50 day ($1238). The 200 day is $1316 and major res. Overnight it is slightly higher at $1275.90 +$12.10.

Crude closed STRONG at $99.88 +$2.04, with an intraday high of $100.24 – highest and first time above the $100 day since 12/30/13!!! 1/14’s low was worst since 5/2/13: $91.24! Last time above $100 was 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. Support is at the 40 day m/a (96.47), and the 50 day m/a ($96.31)! SUPPORT now also at the 200 day ($99.38!!!) –  slowly rising! 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 lower at $99.64 -.24 – high $100.46!!!

Overnight equity markets:

Global equity markets mixed, Japan/Hong Kong closed: UK +0.1% vs +0.4% vs -0.9% vs +0.3% vs-0.3%; France +0.3% vs +0.7% vs +1% vs +0.1% vs –; Germany – vs +0.7% vs -0.9% vs -0.2% vs -0.9%; Japan closed vs +2.2%!!! vs -0.2% vs +1.2% vs -4.2%!!! -2%!!; Hang Seng closed vs +1% vs +0.7% vs -0.6% vs -2.9%; Korea – vs +0.8% vs +0.9% vs +0.2% vs -1.7% vs -1.1%; India -0.2% vs +0.3% vs +0.3% vs +0.2% vs – vs -1.5%! U.S. stock futures little changed in a very tight range: DOW -19; SPX -3.70; NDQ -1.50…yawn!

 

 

Some random thoughts:

Going to diverge from planned commentary to discuss the Winter Olympics. In a word: spectacular…the opening ceremony that is! …as it should be despite the quality of life there, but why shouldn’t it have been at a cost of $45 billion (the entire amount). What might that have done for the people? Has Russia now substituted sports PR for military spending under the USSR (remember when the officers refused to work when they weren’t paid)? Also in perspective: $45 billion is…half of Bill Gates net worth! 75% of Warren Buffett’s; slightly more than Larry Ellison; 60% of the combined worth of Charles and David Koch, and 45% of the Walton family (who can’t bring themselves to pay employees a living wage and foist healthcare on the states they operate in). Oh, and TB just ran a check of the Fortune 400 Wealthiest Americans…more than 150 either made their money in financial services (investments, hedge funds,etc), or greatly enhanced their wealth through investments…35%+! Note that the entrepreneurs top the list for the most part (20 in the top 100), and as you go down more financial services names appear. Just wanted to divert your attention from the GOP mantra that uses the top quintile as the standard of ‘wealth’ when even the IRS has a category for the top 0.1% – which should probably be the top 0.01%! That should be enough to give you a ‘fair and balanced’ picture…right Mr. O’Reilly?

Still it was spectacular…those huge gantry cranes which supported the enormous sets that made Rose Parade floats look puny…the 120 projectors required to create the images on the ice…and the girl…wow, the girl! Fearless, they said and fearless she was! A fantasy brought to life!

As usual though, the American media couldn’t stop focusing on security…as if they had any idea what measures or how many security people were actually in the crowd…and of course the ‘glitch’ that caused one of the ‘O’ rings not to open. Begrudgingly, it was called great…with or without it was fantastic…so much so that the Committee should adopt that as the logo!

Even the entrance of the athletes was impressive. For the record, I seldom watch the Opening Ceremonies but thought China’s was also fantastic, but not as good as this.

Now look at Brazil who is spending billions on the World Cup and the Summer Olympics…BOTH in one year, this while the people are protesting (Argentina is having similar over devalutation), guess you might say, “let them eat cake.”  

Tomorrow, back to the economy, but in the meantime, TB is recording the Downhill, Luge, Ski Jumping, and Bobsledding…to be watched like the O.C. screening out the pre-event fluff and wasting the day…or night?

Have a great week!

TB 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: