Quote from a decade ago: “Except where market discipline is undermined by moral hazard, owing, for example, to federal guarantees of private debt, private regulation generally is far better at constraining excessive risk-taking than is government regulation.” – (Sir) Alan Greenspan from 2003…and we made this man Fed Chair???
Quote of the Day from the Friars Club Encyclopedia of Jokes: “A verbal contract isn’t worth the paper it’s printed on.” – Louis B. Mayer…and he should know!
Bloomberg Quote of the Day: “Every human being is the author of his own health or disease.” – Buddha…well…most of the time…you don’t invite cancer!
Bloomberg Top Stories:
*Stocks Decline With Commodites as China’s Growth Slows: Yen strengthens
*Pimco’s Gross Sells Treasuries as Gundlach Says U.S. Yields Will Decline – BUY BONDS…ignore ‘the bond king’ !
*Fed’s Goal to Nurture Inflation Is Proving Elusive as U.S. Rents Stabilize
*Cash Piles Outside U.S. Advance $206 Billion as Apple to IBM Keep Profits
*Bonuses Paid to Wall Street Rose 15% on Average Last Year, DiNapoli Says – !!!
*Euro’s Momentum Reaching Exhaustion Levels at 2-Year High: Market Reversal
*Offices Showing Their Age May Spur More Capital Spending
*Wall Street Plays Dating Game as Christie Stumbles Toward 2016
*Ukraine Warns of Russian Troop Buildup on Borders as Premier to Meet Obama
*Malaysian Plane’s Disappearance Befuddles World That’s Permanently Online
*Crimea Can Be Folded Into Russia Within Two Months, Designated Leader Says
*Medication Use Rising for Adults With Attention Deficit Disorder, NYT Says
Tuesday’s Market Summary:
A short, feeble rally ended in a down day with all indices except NYSE Financials (-1.1%: Brokers -1.4%! KBW Banks -1.1%; Nasdaq Banks -0.6%), off from 0.3% (Dow Transports) to 0.6% (NDQ 100). NYSE Volume barely budged to 3.37B shares from 3.0B shares…lowest of 2014 and beating Jan. 2’s 3.04B shares. The 12-month average is about 3.5B shares! Shares traded ‘on the floor’ also barely rose to 643M from 628M shares. Since 12/20/13 the average has crept up to just 694M shares (23 sessions of more than 700M shares including just five 800M shares and four 900M share days, the highest being 960M on 2/28 – note that almost all of these occurred on an options expiry, or monthend/quarterend and the burst in volume came in the final 15 minutes! In other words: nobody home…and few that care, other than high freak traders!
Advance/Declines AND Breadth were both negative and have been showing weakness for FOUR days now: A/D NYSE -2.1x/-1.3x/+1.3x/+1.3x, Nasdaq -2.7x/-1.2x/+1.1x/-1.1x; Breadth -2.4x/-1.8x/+1.9x/-1.4x, and -3.3x/-1.2x/-1.2x/-1.2x (note Breadth negative all four days on Nasdaq while A/D’s were 3:1 negative).
New 52 Week Highs rose slightly 251 vs 226 vs 382 vs 486 while New Lows rose weakly again to 44 vs 35 vs 20 vs 16 (new low) – still very weak!
Volatility which started last Wednesday at 13.89 has been dead but rose to 14.80 vs 14.21 vs 14.11 vs 14.21, but the big deal was the intraday: 13.84-14.93. It remains slightly elevated and nervous…or at least it makes TB nervous like a temporizing bid in Bridge.
Bonds: closed weaker but have been little changed for four days after rallying from 3/3-3/7 by 19bp’s on 10’s and and 18 on the long bond. The long TIP which had rallied from 1.44% on 2/21 to 1.27% on 3/3 as backed up to 1.38% – the best performer from being the worst as inflation fears have emerged. Overnight, higher on equity market weakness: 10 yr 2.73% +5/16; 30 yr 3.67% +11/16; TIP 1.35% +3/4. Recent ranges: 30 yr high was 3.97% on 12/31; the 10 yr recent high 3.03%! Long TIP recent high was 1.64% The (record?) low of 0.36% was set on 4/5/13. Libor update: 0.234% 3 mos, 0.331% 6 mos. – record lows set recently: 0.329% 6 mos! 3 mos 0.233%!!!). NOTE the Fed Funds rate has averaged 0.08% since 5/22/13 and is steady at 0.07-0.09%!!! Foreign bond yields lower except problem countries led by Greece for a 2nd day: Germany 1.59% -5; UK 2.74% -4 – recent high 3.03%! France 2.17% -4; Italy 3.39% -1; Spain 3.33% +2; Portugal 4.45% +9! Greece 6.96% +10 – and well above last Wednesday’s intraday low of 6.57%. Recent range now 6.57% to 12.57%. Japan: 0.62% –.
Gold closed modestly higher at $1346.70 +$5.20. It has closed above the psychological $1300 every day since 2/12! It has also been above the 200 day since 2/14, which is major support at $1304. 3/3’s high was $1355.00 and 2/27’s high close of $1351.80 were highest since 9/23/13 before the selloff began!!! Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Recent high is $1375.40 back on 9/19. Psych levels: $1200 and $1300 support, with support at the 200 day, $1304! Critical support at the 40 day ($1290) and the 50 day ($1278), both rising. Very strong overnight: $1365.80 +$19.10 with a high of $1369!
Crude closed weak and broke par with at $99.63 print –lowest since 2/11/14 after working higher for two days last week. It closed at $100.03 -$1.09 – below the 200 day ($100.14), and only due to a ‘friendly’ settlement price. It has held ‘par’ since 2/12 – the first time since 12/27/13! 1/14’s low was worst since 5/2/13: $91.24! 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 ($99.34), and the 50 day m/a ($98.33). FIRST SUPPORT at the 200 day ($100.14). The recent range is $85.61-$112.24 since March 1, 2012. It has broken down overnight and is currently $98.81 -$1.22 with a session low of $99.60 bringing the 40 day m/a into play and obliterating the 200 day!
Overnight global equity markets SLAMMED ex-India: UK -1%; France -1.5%! Germany -1.6%! Japan -2.6%!!! Hang Seng -1.7%!! Korea -1.6%!; India +0.1%. U.S. stocks opening weak: Dow -52, low -96! S&P -7; Transports -15; Comp -15 NDQ 100 -10; Russell 2000 -4.4; – Dow Utiities +1.50!
Some random thoughts:
Isn’t it rich?
Are we a pair?
Me here at last on the ground,
You in mid-air,
Where are the clowns?
Isn’t it bliss?
Don’t you approve?
One who keeps tearing around,
One who can’t move,
Where are the clowns?
Send in the clowns.
Just when I’d stopped opening doors,
Finally knowing the one that I wanted was yours.
Making my entrance again with my usual flair
Sure of my lines
No one is there.
Don’t you love farce?
My fault, I fear.
I thought that you’d want what I want
Sorry, my dear!
And where are the clowns
Send in the clowns
Don’t bother, they’re here.
Isn’t it rich?
Isn’t it queer?
Losing my timing this late in my career.
And where are the clowns?
There ought to be clowns
Well, maybe next year.
-by the late Stephen Sondheim as sung by Judy Collins.
In an interview in 1991, Sondheim explained the song this way:
The word “next” is important: “Maybe next year” as opposed to “this year”. “All right, I’ve screwed it up this year. Maybe next year I’ll do something right in my life.” So [it’s] “well, maybe next year” even though it isn’t accented in the music. This is a place where the lyric and the music aren’t as apposite as they might be, because the important word is “next”, and yet the accented word is “year”. That’s my fault, but [something the performer must] overcome.[