This the 1,473rd post will end the commentaries…market data and observations only going forward. TB
Bloomberg Top Stories:
*U.S. Index Futures Rise With Emerging-Market Stocks; Micex, Dollar Decline
*Low Inflation Gives Yellen Room to Retreat From Rate Boost in Six Months – !!!
*Barclays Backs Wrong Billionaire to Miss Out on Fees From Alibaba’s IPO
*BlackBerry to Sell Most of Its Canadian Real Estate to Raise Needed Cash
*Banks’ Split With Fed on Stress Test Seen Risking Payouts to Shareholders
*Canada’s Biggest Pension Manager Agrees to buy Wilton Re for $1.8 Billion
*Yellen Throws Lifeline to Dollar Bulls Saying They Were Early – hmmm?
*Dying Memphis Neighborhood Foretells Next U.S. Financical Mortgage Crisis
*Putin Signs Legislation Formally Completing Crimea’s Accession to Russia
*Airplane Mystery Spotlights Divergence in Pilots’ Mental-Health Screenings
*Obama Invites CEOs From Google, Facebook to Discuss U.S. Spying by NSA
Thursday’s Market Summary:
An up day of sorts…Dow +0.7%, S&P up 0.6%, the two Nasdaqs and Russell 2000 up 0.3%. Ah, but Dow Transports were off 0.1% while Dow Utilities were flat. Hello? NYSE Finanicals rose 0.9%??? and look: Brokers +1.85??? KBW Banks +2.2%!!! Nasdaq Banks +1.5% – oh, yeah, rates are supposed to rise…soon…but will they? BofA most active +2.8% ($17.92 +.48, nearly at its high since 2007; Citi +2.7% and above the 40/200 day for the first time in months…and lovable JPM +3.1% to a new high since 3/31/2000’s $58.13!!! Now what do we do for the quadruple options expiry? Dunno.
NYSE Volume did rise to a below average 3.32B shares from 3.26B shares from a very weak 2.91B and 2.84B shares. REAL trades on the floor however slumped to 633M shares from 664M shares, not only well below average 664M shares (12-mo ave. is 717M), from the back-to-back 2nd and 3rd lowest volumes of 2014. Since 3/10, the last 700M+ day the average has been just 640M shares. But you would know none of this from CNBC who as a former boss and fool used to say, “I never met a rally I didn’t like.” It was that thinking that killed our performance in the late 1980’s.
Advance/Declines AND Breadth were only slightly positive: A/D: NYSE 1:1! vs -3x/+3.2x/+2.6x/+1.4x, Nasdaq +1.1:1x vs -1.8x/+3.1x/+1.8x/+1.2x/-3.3x; Breadth +1.8x vs -2.4x/+3.8x/+3x/-1.2x!/-5.2x!!! and +1.3x vs -1.4x/+3.3x/+1.7x/+1.04x/-3.4x!. New 52 Week Highs were a tad lower at 239 vs 266 vs 269 vs 242 vs 146 vs 164 vs 117 vs 251 vs 226 vs 382 vs 486 while New Lows rose a bit to 49 vs 37 vs 32 vs 36 vs 72 vs 79 vs 63 vs 44 vs 35 vs 20 vs 16 (new low).
Bonds: closed barely lower after see-sawing in a narrow range most of the session. The exception was the 30-year TIP which dropped by another ¾ to 1.38% a day after losing a point (10’s 2.77% vs 2.77%, 3/3 high 2.79%; 30’s 3.66% vs 3.65% from 3.73%). Overnight the long end is a bit higher, even TIPS: 10 yr 2.77% -1/32; 30 yr 3.65% +1/8; TIP 1.37% +1/8. 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: 0.233% 3 mos, 0.332% 6 mos. – record lows set recently: 3 mos 0.233%!!! 6 mos 0.329%! NOTE the Fed Funds rate has averaged 0.08% since 5/22/13 and is steady at 0.07-0.09%!!! Foreign bond yields higher about even except Portugal: Germany 1.64% –; UK 2.77% — – recent high 3.03%! France 2.18% –; Italy 3.42% -1; Spain 3.36% –; Portugal 4.30% -4!; Greece 6.81% –. three weeks ago intraday low hit 6.57%! Recent range now 6.57% to 12.57%. Japan: 0.59% –.
Gold closed lower yet again at $1330.70 -$10.80 – $49 in four sessions! Intraday low was $1321.00, lowest since 2/28! Three days after a new recent high of $1392.60, highest high since 9/4/13 – that ended in an outside day and nearly a negative key reversal!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 $1302. Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Psych level: $1300 support, also technical with the 40 day, $1311. Further support at the 50 day ($1297). Overnight, modestly higher but….$1338.00 +7.10!!! -$57 in 5 days!
Crude couldn’t hold par despite a high of $100.82 and then an ‘outside’ day closing at $99.43 -.94 – 200 day is $100.27! Three days ago the session low of $97.37 lowest since February 6th which resulted in a negative key reversal!!! It had 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. First RES is again the 200 day ($100.20), and the 40 day ($100.02), with SUP at the 50 day $98.72. The recent range is $85.61-$112.24 since March 1, 2012. Overnight, $99.35+.43.
Global equity markets slightly higher, Japan closed: UK +0.1% vs -1% vs – vs +0.4% vs +0.6%; France +0.2% vs -0.8% vs +0.2% vs +1% vs +0.9%; Germany +0.3% vs -0.7% vs +0.7% vs +0.8% vs +0.8%; Japan closed vs -1.7%! vs +0.4% vs +0.9% vs -0.4%; Hang Seng +1.2%! vs -1.8% vs -0.1% vs +0.5% vs -0.3%; Korea +0.8% vs -0.9% vs -0.1% vs +0.7% vs +0.4%; India +0.1% vs -0.4% vs – vs +0.1% vs +0.2%. U.S. equity futures weaker modestly higher in another narrow trading range: DOW +28 (range 67); SPX +4.60 (9); NDQ +9.75 (20).
Some random thoughts:
TB was answering a letter to a friend and former client who has businesses in California in office buildings and an upscale hotel near Sonoma….and then he just kept writing.
Perhaps it was due to something he read this morning: “today, let me forget myh worries and enjoy the fullness of life.” It included a quote from Nadine Stair, part of which says:
“if I had my life to liver over…I’d relax…I would take fewer things seriously. I would take more chances.” At 69, approaching 70, I want to do this…I want to finish that book on my 32…oops, now 33 years in banking and investing. I want to just enjoy my kids and grandchildren…you know, the ones I wrote this for…for their futures…which, hopefully they don’t see the way I do…having never experienced the boom that we had. I am ashamed that we are leaving them off worse than us for the first time in our history.
So here goes…for the last time…and if you are still with me at the end, thanks for reading! But please, do something yourself, in this apathetic America…
People are spending but on things they need…replacing cars, real necessities (GM and Toyota may not benefit as much given their deceit on defects). Also hearing high end retailers – especially brand names like Tiffany are even feeling the pinch. Congress cut off extending ’emergency’ unemployment insurance even as the labor participation rate sits near 65% – bouncing off a 35 year low! All of that money would have been spent – immediately recycled into the economy…as are food stamps!
Our government is a ‘shambles’ (I went there when we were in York!). All out for themselves…one in four registering as lobbyists in their final term. The administrative branch has to divest of securities, avoid conflicts yet none of this applies to Congress…including insider trading. The Koch brothers are the prime movers in turning the U.S. into an oligarchy with most of the benefit going to them personally! Christie has gone from a possible contender to just another corrupt politician…following. Former GS head, Senator, and governor, Jon Corzine has avoided all prosecution for his contemptible behavior in the MF-Global debacle (guess we know what the ‘MF’ stands for). Our politicized Supreme Court under cover of being ‘strict constructionists’ overrode the majority in the Bush-Gore election – I voted for Bush and have to wonder what might have happened if the will of the people had prevailed. CEO’s cost shareholders money then receive outlandish bonuses (mostly in stock that even if it doesn’t appreciate they reap the ‘face value’), and contribute to PAC’s that often don’t help the company but themselves and shareholders don’t even know where it went.
Directors of big companies rubber stamp pay increases while reaping six figure compensation for themselves…chump change to them…but their actions influence their boards to raise their bonuses too…note this is for big companies, some of whom pay no corporate tax, while small ones have CEO’s who really work for their pay (IBM’s CEO, Virginia returned her $9 million bonus even though the earnings were up – but like the others, from weak levels. Meanwhile, Jamie Dimon gladly took a $20 million bonus following his admonition to division heads to take more risk – as Robert Rubin did at Citi – resulting in a cost of $20 billion to shareholders….and what about the dozens of lawsuits that have been settled with fines, some record ones, without admitting guilt and holding no one responsible.
I love this country and loathe the apathy that prevails. As a senior I want my benefits but would gladly give some back if there was a) reform, and the GOP would give too by removing wasteful subsidies and eliminating the carried interest provision, and raising taxes on the top 0.1% – or at least the top 0.01% who are absorbing all the wealth at the expense of the rest of us…cutting spending is fine but to ignore our deteriorating infrastructure is unconscionable while we can’t even raise the federal gas tax from the 5 cents that was put in place by Eisenhower to fund the interstate highways. It should be a percentage. Even worse is our deteriorating energy grid….and continued reliance on finding more fossil fuels even as global warming has raised the average temperature by 1.6 degrees and with either increase a total of 6 degrees and even further deterioration of the ice cap, or IF we stop the currently being developed oil and gas fields we ‘might’ hold it at 4 degrees. We surpassed the ‘danger’ limit of 400 parts per million of carbon and it got a big ‘so what’? Researchers have now found that the last time that occurred was 900,000 years ago – before man walked the earth…and largely due to volcanic activity, fires, etc. In Florida, they already have flooding due to higher tides and are putting in pumps to ‘push’ the water down into the water table – 60 feet below – since the storm drains can no longer function when the tides are high and it is backing up to a foot or more in some areas. Yet we continue to see these warnings as coming from ‘tree huggers’ and the oil and gas companies spend billions lobbying and giving out misinformation (disinformation?). Jimmy Carter put solar panels on the White House. One of Reagan’s first directives was to remove those panels as unsightly…thus cancelling a message. True, at that time, most of us, including this writer, though Carter was over-reacting.
We condemned Lyndon Johnson for his ‘guns and butter’ approach to Viet Nam, yet Bush 43 got us in two wars, not only both still going on but the longest in American history. Instead, using a ‘minor’ recession as cover for a more than a decade boom, cut taxes, not once but three times, while the deficit ballooned…then came the Tea Party (remember those Koch brothers?), and condemned the ‘tax and spend’ democrats for it. Yes, we need reform but it has to affect everyone and our elected representatives have to be willing to tell their parties to ‘go to hell’ and reach across the aisle and do the right thing…is there any sense of decency and responsibility left? Highly doubtful. The only luminary I see is Robert Gates who tried to do the right thing…as Lee Iacocca asked, “where are the leaders”? Dunno.
I could go on but I fear I have said too much…and once again it has fallen on deaf ears…to people numbed by apathy and unwilling to stand on their hind legs. Of course, you could write your representative or senator…but to what avail? They don’t care what you think! Not when the people who keep them in office are pumping millions into their campaigns. We are losing some good people this year…especially Sen. Carl Levin who Gates applauds even though they were on opposite sides at times… a venture capitalist following in the steps of Romney is trying to take that seat for the GOP and has already spent over $9 million of his own money to do so. At least, the gridlock will end of the Senate goes GOP too…allowing us to move further along the road to oligarchy.
I can’t end this rant without a special credit to Barrack Obama who came in vowing to change the way government is run…he didn’t have a clue as to how, and still doesn’t. He used all of his political capital on his cause celeb: Obamacare. Where was he when the GOP ripped Clinton to shreds on ‘Hillarycare’? Furthermore, like Bush 43 on Medicare Part D, he exempted big pharma, and virtually everyone else except small businesses and the people, from its effects. So far the only good it has done is on ‘pre-existing’ conditions and allowing parents to keep their kids on their plans longer. By the way, as Romney will attest (now that he isn’t running), universal health care, which every other industrialized nation has, was originally a GOP idea…abandoned once the Clintons were for it. But the operative word is ‘universal’ and that means it has to be administered at the federal level, not by a bunch of profit-seeking (remember when health insurers and hospitals were non-profits?) insurers. The current system is unworkable but it can be reformed…if the GOP had been willing to amend it instead of the House voting more than 40 times to kill it, we would be well on our way.
I could go on but if you don’t get it by now, what’s the use? I feel better…sick but better…at the country I love and was proud of…in spite of our true history as we explored the west at the expense of the indians…which began under the Pilgrims…and was idolized in Custer’s last stand. Or the Emancipation proclamation which had to be come a law a hundred years later, and again, with new marriage laws as late as this year!
So get out of here if you hate it so much? No, I will stay because I love it so much…I just hate to see what money-grabbing individuals have done to it.
Once again: where are the leaders?…and where is your concern? Baby boomers united over Viet Nam and did wonders…although at the time I, a Viet Nam Vet (but one who did his fighting from a ship), thought of them as traitors…then found out they were right…and I, along with hundreds of thousands of men…some who paid with their limbs and lives…were proven wrong.