3/27/14…never give a sucker an even break!

Quote of the Day from the Friars Club Encyclopedia of Jokes: “Life is a sexually transmitted disease.” – Guy Bellamy

Bloomberg Quote of the Day: “Never let the fear of striking out get in your way.” – Babe Ruth

Bloomberg Top Stories:
*First-Time Jobless Claims in U.S. Unexpectedly Fell Last Week to 311k, -10k, low since 9/28
*U.S. Q4 GDP Was Revised to +2.6% from +2.4%, Median However +2.7%!
*Ally Financial IPO Generating $2.7 Billion for Treasury After Bailout – auto lender
*Baxter Will Spin Off Pharmaceutical Development, Focus on Medical Products – hmmm
*Bank of America CEO Moynihan Delivers at Last on Promise to Boost Dividend – 4 cents 
(meanwhile Ken Lewis settled and will pay $10M for misleading investors on ML purchase!!!)
*EU Seeking to Revive Asset-Backed Debt Market to Improve Business Funding
*Russia Confronts Growing Recession Risk as Capital Outflows Bleed Economy
*Italian Banks Seeking $11 Billion Join Greeks in Luring Once-Wary Investors – complacent?
*Cheating Is Easier Than Working at Certain Banks Forex Desks – and colleges!
*Medina-Mora’s Mexico Reign Bruised at Citigroup as Senators Demand Answers
*Ukraine Reaches IMF Accord Unlocking $27 Billion of International Support
*Thai Satellite Spots 300 Objects in Search Zone for Malaysian Flight 370
*Soros-Endorsed Sale of U.S. Oil Reserves Pushed as Way to Penalize Russia
*Warning Shots in Florida Would Be Legal Under Proposed Gun Measure – at his head!

Wednesday’s Market Summary:

There is fundamental weakness in the markets…rallies on low volume, selloffs on average and above average volume, a failure to follow Europe’s lead yesterday resulting in a selloff. Note worst performers were the Russell 2000 -1.9%! Dow Transports -1.6%! and the two Nasdaqs (-1.4%/-1.3%)! ‘Best’ performer was the unlikely Dow -0.5% vs +0.6%. Total NYSE Volume was back up to an ‘average’ 3.5B shares while shares traded on the floor rose to 736M or about 23M above the 12-month average!
NYSE Financials -0.8% vs +0.1% vs -0.1% for two sessions (?); look inside: Brokers -1.8%! vs -0.6% vs -0.4% vs -0.9%; KBW Banks -0.9% vs flat vs -0.1% vs -0.3%, Nasdaq Banks -1.3%! vs flat vs -0.4% vs -0.6%. BofA most active as always but -0.8% vs -1.1% vs -2% vs +2.8% ($17.23 vs $17.37 vs $17.56 vs vs $17.92 which was nearly its high since 2007
Advance/Declines AND Breadth were very negative: A/D: NYSE -2x vs +1.4x vs -1.7x vs +1.4x vs 1:1 vs -3x, Nasdaq -3.8x! vs +1.01x vs -2.9x vs -1.4x +1.1:1x vs -1.8x; Breadth -3.6x vs +1.5x vs -1.9x vs +1.04x vs +1.8x vs -2.4x vs +3.8x vs+3x vs -1.2x vs -5.2x!!! and -7x!!! vs +1.1x vs -3.8x!!! vs -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 but remain weak 151 vs 130 vs 117 vs 269 vs 239 vs 266 vs 269 vs 242 vs 146 vs 164 vs 117 while New Lows doubled to 67 vs 35 vs 55 vs 45 vs 49 vs 37 vs 32 vs 36 vs 72 vs 79…16 (is the low!).

Overnight Comments:

Bonds: closed strong as they have been for three out of the past four sessions, the 10-year not so much (10’s 2.69% vs 2.74%, 3/3 high 2.79%; 30’s 3.54% vs 3.59% from 3.73%). Overnight higher again in the long end: 10 yr 2.70% -1/16; 30 yr 3.54% +1/32; TIP 1.24% +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: 0.234% 3 mos, 0.329% 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 lower for a second day ex- Greece: Germany 1.54% -2; UK 2.70% — – recent high 3.03%! France 2.07% -3; Italy 3.29% -4; Spain 3.24% -4; Portugal 4.01% -7!!!; Greece 6.74% vs 6.69% +5 — after challenging the post-crisis low!!! Recent range now 6.57% to 12.57%. Japan: 0.62% –.

Gold broke $1300 and traded down to $1299.50 lowest since 2/13, before ‘bouncing’ slightly to close at 1303.40 -$8!!! – breaking all three moving averages for the first low and close since 2/12!!! – now off $87 in 8 sessions! A week ago it had 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 had closed above the psychological $1300 every day since 2/12! …and above the 200 day since 2/14, which is now first resistance!!!. Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Psych level: $1300 again res, with technical res at the 200 day, $1300 then the 50 day, $1303, and the 40 day, $1316!!! Overnight weaker with another new low of $1291.90: currently $1294.60 -$8.80….trouble in River City!

Crude spent most of the session bounded by the 40/50 day but closed back above par at $100.26 +$1.07!!! Session high was $100.46. First close above $100 in four days following a high of $100.82 that ended in an ‘outside’ day – 200 day is $100.39. A week 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 ($100.30), then the 200 day ($100.39), with SUP at the 50 day $99.32. The recent range is $85.61-$112.24 since March 1, 2012. Overnight it is strong and above $101 for first time since 3/11, trading to $101.20 and currently $101.03 +.77….gas up the car!

European equity markets weaker along with China, rest of Asia higher: UK -0.6% vs +0.4% vs +1.2% vs -0.1% vs +0.1% vs -1%; France -0.3% vs +1%! vs +1.5% vs -0.2% vs +0.2% vs -0.8%; Germany -0.3% vs +1.3%!!! vs +1.6% vs -0.2% vs +0.3% vs -0.7%; Japan +1%! vs +0.4% vs -0.4% vs +1.8%!!! vs closed vs -1.7%!; Hang Seng -0.2% vs +0.7% vs -0.5% vs +1.9%!!! vs +1.2%! vs -1.8%; Korea +0.7% vs +1.2%!!! vs -0.2% vs +0.6% vs +0.8% vs -0.9%; India +0.5% vs +0.2% vs – vs +1.4% vs +0.1% vs -0.4%. U.S. equity futures slightly higher but in a narrow range: DOW +25 (range 43!); SPX +2.80 (6); NDQ +2.25 (13!).

 

Some random thoughts:

Finally, someone got sued other than a bank and lost: BofA’s former CEO Ken Lewis agreed to pay $10 million for misleading investors on purchase of Merrill Lynch, and agreed to a three-year ban on serving as a public company director. Question: who would want him as a director??? Oh, and don’t forget his ill-advised and ill-timed purchase of Countrywide, in which he stated that the banks auditors had examined every single mortgage – in just two weeks? Obviously, they did one crappy job…and he lamented the purchase then followed suit by buying Mother Merrill, and then ‘hid’ the mounting losses from shareholders.

The bad news? Did the government file the suit? NO!!! The State of New York…just like the days when Eliot Spitzer was the AG…then became governor and guess what: Wall Street struck back! How else do you explain that investigation? We need to rid ourselves of the toothless (except to punish shareholders), Eric Holder, and the SEC needs to start doing its job: protecting investors!

Have a great day…sukkahs!

TB

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