3/24/14…aftermath of a quadruple witching

Quote of the Day from the Friars Club Encyclopedia of Jokes: “Dyslexics of the world, untie! – unattributed

Bloomberg Quote of the Day: “The future is here. It’s just not widely distributed yet.” – William Gibson

Bloomberg Top Stories:

*Stocks in Europe Drop as Leaders Meet on Ukraine; Yen Weakens, Ruble Gains

*Russia Staring at Recession With Rising Intensity of U.S.-Europe Sanctions – Putin doesn’t care…got it? Leaders in Russia have only cared for themselves

*Euro-Asia Factory, Services Growth Stays Close to Highest Level Since 2011

*BNP Paribas Seeks 6% Annual Growth in Investment Bank Revenue Through 2016

*Riskiest Bank Bonds Attract Aviva as European Defaults Drop Amid Recovery

*AT&T Bulls at Highest Level Since IPhone Debut in Hunt for Yield

*Lampert Stops Accepting IOUs From Sears as Cash Burns

*Pimco Says Marois ‘Mess’ Making Quebec a Buying Opportunity – means they own it!

*Foreign Creditor Grip Loosens on Treasuries as American Buyers Buoy Demand

*World Leaders Gather on Ukraine as West Warns on Buildup of Russian Troops-yawn!

*Malaysia Jet Vanishing Act Leaves Only Riddles Over Who is Liable for Loss – !!!

*Ebola Virus Spreads to Guinea Capital Conakry, Killing at Least 59 People

*Chicago Commuter Train Derails, Climbs an Escalator at O’Hare, Injuring 32

FOMC policy statement highlighted that there are now more on the committee who see 1% rates in ’15 than before. US economic data in the past two weeks has been slightly positive. The trend in jobless claims improved modestly. Regional manufacturing surveys increased and indicate a positive bias for ISM Manufacturing this month. Retail sales improved but still indicate a softer Q1 GDP, current estimates are for 1.9% qoq growth. Next week’s economic calendar is fairly light. The highlight of the week will be the February Durable Goods Orders (Wednesday) and February Personal Income (Friday). We will also get January Case-Shiller Home Prices, March Consumer Confidence, and March Richmond Fed Survey, February New Home Sales (Wednesday), Q4 GDP 3rd Estimate (Thursday) and March Consumer Sentiment Final (Friday). Courtesy of Economic Data Service

Friday’s Market Summary:

Ah, ‘twas the quadruple witching as evidenced by the HUGE NYSE Volume of 5.09B shares but also a down day…once again the volume came on a solid down day. Now look at the shares traded on the floor of the NYSE, 2.0B shares, not only the highest of ’14, but a 12-month high! This brought the anemic volume for the week up to an average 898M shares!!! Better think about that, bulls! While the Dow declined just 0.2% and the S&P -0.3%, and Dow Transports -0.4% along with the Russell 2000, the two Nasdaq indices plunged 1% and 1.1% respectively! The only gainer? Dow Utilities +0.8%! Now for a strange brew: NYSE Financials off just 0.1% but look inside: Brokers -0.9%; KBW Banks -0.3%, Nasdaq Banks -0.6%. BofA most active as always but -2% vs +2.8% ($17.56 vs 17.92 nearly at its high since 2007 …while lovable JPM up just 0.1% but to its second straight new high since 3/31/2000’s $58.13!!! Regions Bank, with the appropriate symbol ‘RF’ was a most active and gave back all the gains from its rise to a new 12-month high on Thursday. Hmmmm..

Advance/Declines AND Breadth were mixed with only the former positive: A/D: NYSE +1.4x vs 1:1 vs -3x vs +3.2x vs +2.6x, Nasdaq -1.4x +1.1:1x vs -1.8x vs +3.1x vs +1.8x; Breadth +1.04x vs +1.8x vs -2.4x vs +3.8x vs+3x vs -1.2x vs -5.2x!!! and -2.1x vs +1.3x vs -1.4x vs +3.3x/+1.7x vs +1.04x vs -3.4x!. New 52 Week Highs were slightly higher at 269 vs 239 vs 266 vs 269 vs 242 vs 146 vs 164 vs 117 while New Lows slipped to 45 vs 49 vs 37 vs 32 vs 36 vs 72 vs 79 vs 63 vs 44 vs 35 vs 20 vs 16 (new low).

Overnight Comments:

Bonds: closed solidly higher but only in the long end with 1pt plus gains on the long bond and the long TIP (10’s 2.74% vs 2.77%, 3/3 high 2.79%; 30’s 3.61% vs 3.45% from 3.73%). Overnight weaker again: 10 yr 2.77% -1/4; 30 yr 3.62% -1/4; TIP 1.33% -3/8. 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: 0.235% 3 mos, 0.333% 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 modestly higher across the board except Greece/Portugal which are sharply lower: Germany 1.64% +1; UK 2.75% —  – recent high 3.03%! France 2.16% –; Italy 3.42% +1; Spain 3.35% –; Portugal 4.19% -5!; Greece 6.59% -18 and challenging the post-crisis low!!! Recent range now 6.57% to 12.57%. Japan: 0.60% +2.

Gold closed slightly higher at $1336.00 +$5.30 – still off $44 in five sessions! Thursday’s intraday low was $1321.00, lowest since 2/28! This, four 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, $1313 and the 200 day $1303. Further support at the 50 day ($1299). Overnight, weak again at $1317.80 -$18.20 with a session low of $1314.60 – could be the end of the rally!!! Now -$62 in 6 sessions!

Crude traded down to a weak $98.25 before settling little changed at $99.46 +.03, a day after a session high of $100.82 that ended in an ‘outside’ day – 200 day is $100.33 and rising! Four 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 the 40 day ($100.07), then the 200 day ($100.33), with SUP at the 50 day $98.86. The recent range is $85.61-$112.24 since March 1, 2012. Overnight back above par, $100.14 +.68 with a high of $100.18 all on Russia of course.

European equity markets lower, Asia STRONG!!!: UK -0.1% vs +0.1% vs -1% vs – vs +0.4%; France -0.2% vs +0.2% vs -0.8% vs +0.2% vs +1%; Germany -0.2% vs +0.3% vs -0.7% vs +0.7% vs +0.8%; Japan +1.8%!!! vs closed vs -1.7%! vs +0.4% vs +0.9%; Hang Seng +1.9%!!! vs +1.2%! vs -1.8% vs -0.1% vs +0.5%; Korea +0.6% vs +0.8% vs -0.9% vs -0.1% vs +0.7%; India +1.4% vs +0.1% vs -0.4% vs – vs +0.1%. U.S. equity futures modestly higher in another narrow trading range: DOW +33 (range 62); SPX +5.10 (12); NDQ +11.50 (19).   

 

Some random thoughts:

As discussed Friday, no commentary except want to call your attention to Bill Moyers on Sunday….and if this isn’t stopped we will become an oligarchy! The Koch brothers must be very proud…and we should be ashamed!

whos-buying-our-midterm-elections

Have a great week!

TB

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