3/28/14…are stocks ‘really’ a good ‘bet’?

Quote of the Day from the Friars Club Encyclopedia of Jokes: “The Peace Corps is a sort of Howard Johnson on the main drag into maturity.” – Paul Therouux

Bloomberg Quote of the Day: “The question isn’t who is going to let me; It’s who is going to stop me.” – Ayn Rand…the idol and mentor of (Sir)Alan Greenspan

Bloomberg Top Stories:
*Consumer Spending in U.S. Rises the Most in Three Months as Winter Recedes – yawn!
*Europe Economic Confidence Tops Forecast to Reach Highest Level Since 2011 – huh???
*German Inflation Slows as ECB Prepares for Interest-Rate Meeting Next Week
*Portugal Leads European Debt Rally as Slower Inflation Buoys Stimulus Case – no,Greece is!
*BlackBerry Fourth Quarter Loss Beats Estimates as Chen’s Reforms Take Root
*JPMorgan Aims to be Top Three Stocks Brokerage to Match Investment Banking – they need a new CEO and board of directors to rid themselves of the stench!
*GM to Withdraw Opel Brand From China After Two Decades to Focus on Europe – and suits?
*BRIC Bust Fuels ETF Rush Into Frontier Markets as Ho Chi Minh Index Soars-gung hay fat choy
*Europe Seen Paying Double to Replace Piped Russian Gas With Shipped Fuel – !!!
*BlackRock to Fidelity Divergence-With U.S. Bets Paying Off – why? see below!
*Actor Kevin Spacey Works Real Lawmakers to Win ‘House of Cards’ Tax Break – Maryland!
*Malaysian Jet Search Shifts as Fresh Lead Shows It Flew Shorter Distance – WTF???
*Obama Suggests Putin Should Get over Loss of Soviet Empire After Decades – he’s ex-KGB!!!
*House Intelligence Chief Rogers of Michigan Says He Won’t Seek Re-Election – TV Host!?!
*Paris Votes First Female Player as Job Losses Rise With Home Costs – and air pollution!

Thursday’s Market Summary:

At the end of quarter…how will stocks perform? Not well unless we have phenomenal two day rally. To wit:
3/27                 Qtr to date     March
Dow 30              -1.9%!            -0.4%
Transports      +0.2%            +0.9%
Dow Util      +7.2%!!!         +1.4%!
S&P 500          FLAT???         -0.6%
Nasdaq Comp -0.6%             -3.6%!!!
Nasdaq 100     -0.8%             -3.6%!!!
Russell 2000   -1.1%!            -2.7%!!!
NYSE Fin.         -1.2%             -0.1%
KBW Banks      +2.6%           +1.6%!
Nasdaq Banks +0.7%         +1.6%!

Welcome to the world’s biggest casino…can we get you a ‘free’ drink? When was the last time you recall Dow Utilities being the place to be? When was the last time we had a rally on high volume – options expiry and monthend excepted? Yesterday’s NYSE Volume was 3.72B shares…finally above average but on a down day! Real trades on the floor were 794M shares…about 70 million above average! Yet there is no relenting by the stubborn bulls who remain in euphoria over the ‘green shoots’ (shouldn’t they have turned into blooming plants by now???).  Not much notable yesterday but it didn’t help the situation – except Dow Utilities with another 0.7% gain. All others were down from 0.2% to 0.6% (Nasdaq) while the Dow Industrials were FLAT…thought that was the hallmark of the S&P 500?

As for the 3-year returns they will begin to slip and more importantly the FIVE years will since the low was at the beginning of March 2009!!! Be careful what fund managers show you for their long-term performance!!! If the quarter ended yesterday, the five year price change for the S&P 500 which is flat for the quarter would be 5.99% annualized and with dividends reinvested 8.9% AND for the five years 19.3% and a return of 22.5%. Sounds good, no? No! Had you simply put the money in three month t-bills you would have earned 21.8% – AND without the volatility! That is not a good sign!

One last comparison: NYSE financials which TB includes, not because he used to be a banker but because having suffered the most in the crisis, they stood the most to gain on the rebound. But as the table above shows, even with the boost for the month they are not impressive. Take yesterday…please: NYSE Financials -0.2% vs -0.8% vs +0.1% vs -0.1% for two sessions – so far so good, right? Wrong! Look inside: Brokers –1.2%! vs -1.8%! vs -0.6% vs -0.4% vs -0.9%; KBW Banks -1.3%! vs -0.9% vs flat vs -0.1% vs -0.3%, Nasdaq Banks –1.5%!!! vs -1.3%! vs flat vs -0.4% vs -0.6%. BofA most active as always -1%! vs -0.8% vs -1.1% vs -2% vs +2.8% ($17.01 vs 17.23 vs $17.37 vs $17.56 vs vs $17.92 which was nearly its high since 2007! Will today be the first close below $17 since March 4, thus ending the rally to the high? Oh yeah,,,they have that ‘swell’ 5 cent (up from 1 cent) dividend for a whopping 1.18% div yield. Ah but what about Citi losing 5.4% yesterday with just a 0.08% dividend yield. Time to rethink banks? Wells gained 1.2% (Div 2.85%), while JPM (the crooked bank) was imperceptibly higher (Div 2.67%). US Bank, the good bank, dropped 1.5% three days after a new post crisis high…and at least they have a 2.3% yield!
Advance/Declines AND Breadth were mixed with Nasdaq both negative: A/D: NYSE +1.1x vs -2x vs +1.4x vs -1.7x vs +1.4x vs 1:1 vs -3x, Nasdaq -1.5x vs -3.8x! vs +1.01x vs -2.9x vs -1.4x +1.1:1x vs -1.8x; Breadth +1.2x vs -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 -1.7x vs -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 more than halved and are now very weak: 72 vs151 vs 130 vs 117 vs 269 vs 239 vs 266 vs 269 vs 242 vs 146 vs 164 vs 117 while New Lows rose again to the highest in two weeks to 83 vs 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 higher and have been now for four of the past five sessions (10’s 2.68% vs 2.69%, 3/3 high 2.79%; 30’s 3.53% vs 3.54% from 3.73%). Overnight slightly weaker: 10 yr 2.69% -1/16; 30 yr 3.53% –; TIP 1.24% –. 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, 0.329% 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 mixed, Greece plunging: Germany 1.52% -1; UK 2.69% +1 – recent high 3.03%! France 2.06% –; Italy 3.32% +2; Spain 3.24% –; Portugal 3.97% -6!!!; Greece 6.54% vs 6.75% -21 AND a new post-crisis low!!! Recent range now 6.54% to 12.57%. Japan: 0.62% –.

Gold has collapsed…imploded and broke all supports, trading down to $1289.70 lowest since 2/13, before ‘bouncing’ slightly to close at 1294.80 -$3.70 – well below all three moving averages and the second straight close below $1300 since 2/12!!! – now off $91 in 9 sessions (-6.5% but technically much worse)! On 3/17 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 and has been down every day since! 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, $1299 then the 50 day, $1304, and the 40 day, $1317!!! Overnight weaker with another new low of $1287.20: currently $1288.30 -$6.50! OOPS!

Crude finally broke above the 40/50 and 200 day m/a’s hitting $101.70, highest since 3/10 and closed above par for a second straight day at $101.28 +$1.02!!! +$2.09 in two days! . First close above $100 in four days following a high of $100.82 that ended in an ‘outside’ day – 200 day is $100.39. On 3/10, it had a high of $102.82 then plunged below the 200 day! 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 SUPPORT is now the 200 day ($100.42), then the 40 day ($100.40), with critical SUP at the 50 day $99.32. The recent range is $85.61-$112.24 since March 1, 2012. Overnight it put in another high of $101.88 and is currently $101.76 +.48!

Global equity markets higher: UK +0.1% vs -0.6% vs +0.4% vs +1.2% vs -0.1%; France +0.4% vs -0.3% vs +1%! vs +1.5% vs -0.2%; Germany +0.9% vs -0.3% vs +1.3%!!! vs +1.6% vs -0.2%; Japan +0.5% vs +1%! vs +0.4% vs -0.4% vs +1.8%!!! Hang Seng +1.1%! vs -0.2% vs +0.7% vs -0.5% vs +1.9%!!! vs +1.2%! vs -1.8%; Korea +0.2% vs +0.7% vs +1.2%!!! vs -0.2% vs +0.6%; India +0.6% vs +0.5% vs +0.2% vs – vs +1.4%. U.S. equity futures slightly higher but in another very narrow range: DOW +23 (range 36!); SPX +3.80 (6); NDQ +11.25 (18).

Have a great weekend!

TB

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