Quote of the Day from the Friars Club Encyclopedia of Jokes: “When a man steals your wife, there is no better revenge than to let him keep her.” – Sacha Guitry
Bloomberg Quote of the Day: “Say little and do much.” – from the Pirkei Avot
This week’s economic calendar is full of important indicators. The highlight of the week will be the April Durable Goods Orders (Tuesday), Q1 GDP 2nd Estimate (Thursday) and April Personal Income (Friday). We will also get March Case-Shiller Home Prices, May Consumer Confidence, May Richmond Fed Manufacturing, May Dallas Fed Manufacturing (Tuesday) and May ISM Chicago PMI and May Consumer Sentiment Final (Friday). Courtesy of Economic Advisory Service
Bloomberg Top Stories:
*Durable Goods Orders in U.S. Unexpectedly Rose in April for a Third Month
*Chinese Government Said to Push Banks to Remove IBM Servers in Spy Dispute – LMAO!!!
*Draghi’s Drive for Asset-Backed Securities Action Rouses Academic Skeptics – WTF???
*Lloyd’s Plans to Sell 25% of TSB Shares in Initial Public Offer Next Month
*Stocks in Europe Rise Before U.S. Data as Portugal Bonds Gain; Grains Drop
*ICE to Sell 33% Stake in Euronext in Private Placement Before Public Offer
*Pfizer Ends $117 Billion AstraZeneca Bid Amid Chinese Recriminations
*Scotiabank Net Rises 14% on Canadian Consumer Lending, Wealth Management
*Piketty’s Inequality Conclusions Are Pretty Much Obvious, No? YES!!!
*Shakeout Hits U.S. Shale boom as Frackers Go fro Broke Amid Mounting Debt – watch out!
*Ex-Goldman Banker Hunts Smugglers to Clean Up Philippines’ Customs Bureau – clients? LOL
*Bond Market’s Message to Fed: Your 4% Rate Forecast Is Still Way Too High – read and heed!
*Ukraine Forces Inflict Losses in Donetsk Battle After Proshenko Victory – Putin still won!
*European Union Election Backlash Prompts Questioning of Austerity Measures
*Dealmakers Ignore Congress Warning on Mergers Spurred by Pfizer Bid
*Sudan Woman Facing Execution for Apostasy Give Birth in Omdurman Prison
*China’s Financial Problems Are Now the World’s Problems: commentary by A. Gary Shilling
Friday’s Market Summary:
Another day of boredom and one in which only a fool or a day trader gets involved…if you doubt this, look at the volume below! Russell 2000 took honors +1.1% followed by Dow Transports +0.8% and the NDQ 100/Composite both up 0.7%. Only loser, Dow Utilities was -0.2%
Total NYSE Volume – of course stocks did close a half hour early fell to 2.4B shares from a weak 2.74B vs 2.77B vs 2.97B vs 2.64B!!! …that’s from 3.18B last Friday (remember it was an options expiration!) from an average 3.53B – on a ‘down’ day! Real trades on the floor of the NYSE stunk slipping further to 554M shares vs 577M vs 587M! The high this month is 775M while Friday’s 554M shares is the new low. The 12-month average continues to slip to a weak 722M shares!
A/D’s were positive again but meaningless: NYSE +2x vs +2x vs +2.6x vs -2.4x vs +1.8x; Nasdaq +2.5x vs +2.1x vs +1.5x! vs -3.1x vs +2.2x. Breadth was similar: NYSE +2.3x vs +1.8x vs +2.6x vs -4.1x! vs +1.6x; Nasdaq +2.5x vs +2.6x vs +2.7x vs -3.1x! vs +3x! But who cares when the volume is so low? New 52 Week Highs dipped to 167 vs 187 vs 132 vs 111 vs 143 vs 71!!! vs 107. New Lows declined again to a weak 51 vs 62 (never short a thin market) vs 95 vs 118 vs 72 vs 180 vs 102 vs 62 vs 65 vs 214!!!
Lastly volatility…S&P VIX remains bullish…and in the absence of sellers declined again to 11.36 -.67 with a range of 11.36-11.97– note not a single ‘12’ print!
Bonds had an early close ahead of the Memorial Day weekend. and closed slightly higher. The 10 yr closed at 2.53% +3/16 vs 2.55% – up and down with net zero effect. 10 yr close 3.59% +5/8. The long TIP, as low as 1.00% a week ago, closed 1.06 +3/4 vs 1.09% vs 1.10% vs 1.08% vs 1.08% vs 1.02%. Overnight little changed and slighlty weaker: 10’s 2.55% -1/8; 30’s 3.40% -1/16; and long TIP 1.07% -1/16. Cycle highs: 30 yr high was 3.97% on 12/31; the 10 yr recent high 3.03%! Long TIP was 1.64%. The (record?) low of 0.36% was set on 4/5/13.
Libor update: 0.229% 3 mos.; 0.324% 6 mos., both just off their record lows, set recently: 0.227% and 0.32% respectively! NOTE the Fed Funds rate has averaged 0.08% since 5/22/13 and is 0.07% -0.09%. Foreign bond market mostly lower led by Portugal while Gilts are weak on Draghi’s comments: Germany 1.40% -1; UK 2.65% +3; France 1.80% -3; Italy 2.98%!!! –; Spain 2.87%! -2!; Portugal 3.62%!!! -3; Greece which bottomed at 5.83% on 2/24 closed very strong Friday and is now 6.10%! -2 vs 6.38% early Friday – high was 6.75%. Highly volatile!!! Range is 5.77% to 12.57%. Japan: 0.58% –.
Gold closed slightly lower at $1291.90 -$4.10 with a session low of $1286.60. This, after hitting $1309.20 a week ago. It remains below the 40/50/200 days and the psych support level of $1300 with first res at the 40 day $1297, then the 200 day $1299, and the 50 day $1304. Following the ‘key reversal’ on 3/17 after printing new recent high of $1392.60, highest high since 9/4/13 – which ended in an outside day and nearly a negative key reversal! Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Overnight it is $1284.10 -$7.80 – session low $1282.00…lowest since 5/12!
Crude closed slightly higher at $104.35 +.61 with a session high of $104.50 – still highest since being slammed on 4/22! 3/2’s session low was $97.37, lowest since 2/4! 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. It remains well above all three moving averages with support at the 40 day ($101.76) then the 50 day ($101.34), and 200 day $100.34. The recent range is $85.61-$112.24 since March 1, 2012. Overnight it is slightly lower at $104.03 -.32.
Global equity markets mixed: UK +0.5% vs -0.2% vs +0.1% vs -0.5% vs -0.3%; France – vs +0.1% vs +0.2% vs -0.2% vs +0.1%; Germany +0.4% vs +0.2% vs +0.5% vs -0.2% vs -0.1%; Japan +0.2% vs +0.9% vs -0.2% vs +0.5% vs -0.6% vs -1.4%! Hang Seng -0.1% vs +0.1% vs – vs +0.6% vs – ; Korea -0.6% vs +0.1% vs +0.1% vs -0.1% vs +0.1%; India -0.7% vs +1.3%! vs -0.3% vs +0.1% vs +1%! vs +0.9%. U.S. Stock Index Futures rallying: DOW +69 (range 62 – gapped up on open); SPX +8.10 (9); NDQ +18.25 (16).
Some random thoughts:
…watching the National Memorial Day Tribute Sunday evening, I thought how sad that a wonderful event like this has to be marred by self-serving people at the VA. Wonderful tributes to the fallen that were heart-rendering but what do we do for them or their families…even worse for the ones who return with mental and physical injuries?
ThinkAdvisor, a magazine I follow on line had a series of tributes to investment advisors who served. After thinking about it, TB registered as one. In the summary he wrote:
While I served, I got more out of the Navy than I put forth. I got my GI Bill, and my experience got me a job as a harbor patrolman which I was able to do while completing college.
Most importantly, it taught me to respect authority – but to question it. My exec went on to a command and became the first captain in the history of the US Navy to be relieved of command at sea. Why couldn’t the navy see he was unfit for command.
I believed in what we were doing in Viet Nam only to find out later that the protestors were right.
Today, our government puts our troops in harms way – needlessly, and then fails to hold up to their end of the deal. Do we/did we really belong in Iraq or Afghanistan? Are the Iraqi’s better or worse off now with a ‘democracy’ (sic)? Is government accountable to our troops or even the people?
Still I believe the Navy was the best thing I have ever done but would I want my son/daughter to enlist? No…not with a government run by people who have done no public service let alone the military.
I firmly believe that the lack of public service by people in the public sector was a primary reason for the financial crisis…but has proven that crime does pay…very well.
The remainder of the week will focus on the short-comings of our government leaders and how the lack of public service has created the real ‘me’ generation where anything that makes you wealthier is ‘a good thing’ – to hell with the victims, they are simply ‘losers’.
Hope you have a great holiday-shortened workweek…but don’t stop remembering the vets!