6/2/14…trader bill the prophet…well, sort of…

Quote of the Day from the Friars Club Encyclopedia of Jokes: “Have you noticed? Anyone driving faster than you is an idiot, and anyone driving slower is a moron.” – George Carlin

Bloomberg Quote of the Day: “Your time is limited, so don’t waste it living someone else’s life.”
– Steve Jobs…wonder when he said that…but sound advice!
This week’s economic calendar is packed with important indicators. The highlight of the week will be the May ISM Manufacturing Survey (Monday), May ISM Non-manufacturing Survey (Wednesday) and May Employment Situation report (Friday). We will also get April Construction Spending (Monday), April Factory Orders and May Motor Vehicle Sales (Tuesday), May ADP Employment, April International Trade, Q1 Productivity & Costs Final (Wednesday), and April Consumer Credit (Friday). Courtesy of Economic Advisory Service.
Bloomberg Top Stories:
*Juan Carlos of Spain Abdicates After Scandals; Felipe to Be King – its good to be king!
*Putin’s the Chief Audience for Obama’s Three-Country Europe Tour – good luck on that one!
*Obama Seeks Power-Plant Emissions Cuts Republicans Oppose – like coal…dinosaurs!
*Abbas Swears in Palestinian Unity Government as Dispute Resolved
*U.S. Forces Planned for Worst in Prisoner Recovery, Hagel Says – the deal was the worst!
*India’s Police Mocked Father of Pre-Teen Raped and Killed – sick bastards!
*Prostate Cancer Patients Live Year Longer With Early Chemo Use
*Cancer Hospitals Make Gene Tests a New Standard for Care
*NFL With Developers Push for Congress Win on Terrorism Insurance – oh come on!
*Libyan Troops Clash With Benghazi Militias as Eight Are Killed
*Australia’s Last Two Years Hottest on Record, Climate Group Says – it can’t happen here!
*Russia Gives Ukraine Leeway on Gas as Five Rebels Are Killed

Friday’s Market Summary:

Looks like the summer doldrums are here. Ah, but volume rose, you say. Conceded, but it was monthend. Compare and contrast to April 30th: Total Volume 3.7B shares…May 3.17B shares. Shares traded on the floor of the NYSE: 909M vs 916 in other words a typical monthend…in fact somewhat weak on overall volume. Aside from that it was a session for the indices and the indicators with Dow Transports -0.1%, the two Nasdaq’s -0.1%, the Dow up just 0.1% and the S&P +0.2%. Best? Dow Utilities +0.8%!!! Weakest was the Russell 2000 -0.5%! Financials flat.
Here are returns for month and year to date:
May YTD
Dow +0.8% +0.9%
Transports +5.6% +9.5%
Dow Utilities -1.6% +11.1%!!!
S&P 500 +2.1% +4.1%
NDQ Comp +3.1% +1.6%
NDQ 100 +4.3% +4.0%
Russell 2000 +0.7% -2.5%
NYSE Fin +1.5% +1.1%
KBW Banks +0.7% +1.1%
NDQ Banks -0.6% -4.4%

Total NYSE Volume as stated above came back but to a still below average 3.7B shares from a very weak 2.68B vs 2.92B vs 2.89B s 2.4B vs 2.74B! …WEAK!! Real trades on the floor of the NYSE also rose to a strong (but not for monthend) 916M shares from a putrid 544M vs 636M vs 657M vs 554M vs 577M! The ‘prior’ high for the month was 775M while Thursday’s 544M shares was the low and the average for the month was a weak 663M shares or about 60M below the weak 12-month average of 722M shares!
A/D’s were mixed and minor: NYSE +1.1x vs +2x vs +1.1x vs +2.2x vs +2x; Nasdaq -1.6x vs +1.4x vs -1.6x vs +2.9x vs +2.5x. Breadth was slightly negative: NYSE -1.1x vs +2.6x vs -1.1x vs +2.1x vs +2.3x; Nasdaq -1.4x vs +2.1x vs +4.3x! vs +2.5x vs +2.6x. But who cares when the volume is so low? New 52 Week Highs were slightly lower at 271 vs 287 vs 229 vs 336 vs 167 – recent low 71!!! New Lows were modestly higher at 60 vs 45 vs 61 vs 50 vs 51 – recent range 45-214.
As for volatility…S&P VIX remains bullish and despite the mixed session slightly lower…buying puts (or setting sell stops ‘with limits’) is very cheap…consider it! 11.40 -.17 with an even narrower range of 11.32-11.70– note not a single ‘12’ print – for a sixth straight session!

Overnight markets:

Bonds closed the month slightly weaker but compare to April 30th: 10 yr closed at 2.46% vs 2.65%. 30 yr closed 3.32% vs 3.46%! The long TIP, which hit a low of 0.978% on 5/29, closed 1.01% vs 1.14% – not too shabby! Overnight they are weaker…payrolls week ahead: 10’s 2.49% -1/8; 30’s 3.34% -1/4; and long TIP 1.03% -7/16. 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: 0.227% 3 mos.; 0.322% 6 mos., both just off their record lows, set recently: 0.227% and 0.320% respectively! NOTE the Fed Funds rate has averaged 0.08% since 5/22/13 and is 0.07% -0.09%. Foreign bond yields mostly a tad lower: Germany 1.35% -1; UK 2.59% +2; France 1.76% -1; Italy 2.94% -2; Spain 2.82% -3; Portugal 3.63%+3; Greece, which bottomed at 5.83% on 2/24 closed very strong last Friday is now 6.15% -1 – the high on selloff was 6.75%. Highly volatile!!! Range is 5.77% to 12.57%. Japan: 0.58% +1.

Gold closed weak – 4th day – at $1245.60 -$11.50 with a session low of $1247.80 – lowest since 2/3/14!!! Off $35 for the month! This, after hitting $1304.10 on 5/22 – the last time it saw $1300! It is now way below the 40/50/200 days and the psych support level of $1300 with first res at the 40 day $1293, then the 50 day $1294, and the 200 day $1298 – together they pose formidable res. It has fared poorly since the ‘key reversal’ on 3/17, after printing the recent high of $1392.60, highest high since 9/4/13! Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Overnight it traded down to $1240.90! – lowest since Jan. 31 and is currently $1247.00 +$1.40.

Crude closed slightly lower at $102.71 -.87 with a low of $102.40, lowest since 5/20. Friday’s high was $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 ($102.03) then the 50 day ($101.66), and 200 day $100.29. The recent range is $85.61-$112.24 since March 1, 2012. Overnight it is little changed in a narrow range ($102.70-103.35),and is currently $102.76 +.05.

Global equity markets higher – Japan and India strong; Hong Kong closed: UK -0.1% vs +0.3% vs +0.1% vs +0.5% vs -0.2%; France – vs -0.4% vs -0.2% vs +0.1% vs –; Germany +0.2% vs – vs -0.1% vs +0.1% vs +0.4%; Japan +2.1%!!! vs -0.3% vs +0.1% vs +0.2% vs +0.2%; Hang Seng closed vs +0.3% vs -0.3% vs +0.6% vs -0.1%; Korea +0.4% vs -0.9% vs -0.2% vs +1%! vs -0.6% vs +0.1%; India +1.9%!!! vs -0.1% vs -1.3%! vs – vs -0.7% vs +1.3%!. U.S. Stock Index Futures slightly higher in another narrow range session: DOW +17 (range 33); SPX +1.20 (4); NDQ +2 (10).
Some random thoughts:

…today is not about TB blowing his horn but how more and more recognized people are coming out of the woodwork about the sad state of our government and the wealth gap (they go together):

– How many times has TB blasted Walmart? Also, comparing it to the employee-friendly Costco: here is a link that explains it well: Costco vs Walmart

– Yesterday on Moyers & Company, Nobel laureate Joseph Stiglitz talked about our ridiculous tax system that not only benefits the top 1% but encourages companies to shift operations abroad and not repatriate dollars. He cites this as the leading cause of the wealth gap. You can go to the website Moyers/Stiglitz …or read his white paper at: Joseph Stiglitz on taxes and wealth gap

– Another new book: Austerity, by Florian Schui, discusses how dramatically cutting spending, from welfare to infrastructure not only negatively impacts the economy but by widening the wealth gap and making more people feel ‘left out’ it invites violent change…either a revolution in emerging market economies, or a peaceful but dramatic change in the government (the rise to power and election of Adolph Hitler in post-WWI Germany. TB has repeatedly pointed this out saying, ”all it requires is a strong leader.” Obama promised change and all we got was more of the same…as he lacks vision. Note that Hitler went from a ‘joke’ in the 1920’s to lead the way!

What is incredible to TB is how the rank and file of the GOP – mostly white, middle-class continue to do the bidding of the top 1%…what is in it for them? They are like frogs in the kettle of water slowly being heated…and they can’t see…or feel…it This from a former Republican!

The topic du jour on the Sunday talk shows was of course the release of the U.S. soldier. All lauded it (on humanitarian grounds – whether or not they believed that), but most went on to say negotiating with terrorists will merely lead to more hostage taking – and was ‘unprecedented’ by any nation. Really? One panelist asked if there was a difference then between Israel negotiating prisoner exchanges with the Palestinians? Of course, it should be done under the proper circumstances. Meanwhile, Texas Sen. Ted Cruz made another of his evangelical speeches as the all-knowing person…the highlight was saying the Democrats are trying to politicize everything – of course they are, Ted….but who is the best at it? The GOP and YOU!!!

Susan Rice should have learned by now to either look at caller ID before answering the phone on a weekend. Once again she overstated the case saying Bergdahl was ‘captured on the battlefield’. Nyet! He apparently ‘walked off the base’ and was then captured…was it a mental defect?…PTSD?…time will tell….always does…

As for the exchange: that had to be the worst piece of negotiation on record. It shouldn’t even be billed as that: five senior Al Quiada leaders – their draft picks – for one enlisted man. Had this gone before Congress as required by law (although it would have gone nowhere under any cirscumstances), it would have drawn a balk! …and rightly so. This is not over.

Lastly, on Edward Snowden, finally an informed and responsible comment (as opposed to Sec. of State Kerry labeling him ‘a traitor and a coward’ – this from a man who himself defied authority after serving honorably in Viet Nam). The comment came from former CIA chief Michael Hayden who, when asked if he was a patriot or a traitor, said he didn’t know if he was a traitor and he certainly wasn’t a patriot but he would merely label him a ‘defector’ for now. The right call to TB!

That’s enough for now…have a great week! Don’t take any wooden nickels…er…Bitcoins! Also, it would be wise to not invest in cannabis related stocks!

TB

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