Quote of the Day from the Friars Club Encyclopedia of Jokes: Every man has it in his power to make one woman happy…by remaining a bachelor.” – anonymous…but of course!
Bloomberg Quote of the Day: “There is still no cure for the common birthday.” – John Glenn, oh yes there is, John…have fun and carry on! TB
Bloomberg Top Stories:
*S&P 500 Futures Decline as Emerging Stocks, Yen Advance; Palladium Jumps
*Carry Trades Ascend in Maria Draghi’s World of Negative Interest Rates – very troublesome!
*Allergan Board Unanimously Rejects Valeant’s Unsolicited Takeover Proposal – hmmm
*GM Draws Crash Victim Family Protests as Barra’s First Shareholder Meeting – damn straight!
*Goldman Sachs Not rushing to ‘New Neutral’ After Doubting the ‘ New Normal’ – conviction?
*Best Buy Raises Dividend for First Time in Two Years, Exceeding Estimates – still a dog!!!
*ICAP Accused of Collusion in Yen Libor Rate Rigging as EU sends Complaint – nothing new!
*World’s Soundest Banks Offer No Immunity a Poloz Highlights Canada Risks
*Las Vegas Building Left for Dead Revised With Investor Bets – more sukkahs!
*Uber’s Disruptive Awesomeness Creates a Paradise for Lawyers – hell for cab companies!
*Sprint-T-Mobile Merger Talks Offer Chance to Ditch Stigma of Brand Stumble
*Floor in U.S. Retail Seen by Traders Amid Worst Start Since ’08 – options traders!
*Higher P/E, Lower VIX Bring Cause for U.S. Stocks Caution – what has TB been telling you?
*Fake BMWs to Buggati’s Uncovered as Vintage Car Sleuth Scours by Millimeter
*Merkel Warns Against Threats as Came4ron Steps Up Talk of Possible EU Exit
*Militants Seize Mosul as Iraq’s Crumbling Forces Pull Out of Second City – thank you, USA!!!
*Hilllary Clinton Sees No Problem With Clinton-Bush Presidential Campaigns
*Samantha Power Bashes U.S. Isolationism, Taking Campaign to NYC’s Schools
Monday’s Market Summary:
Dead, dead and more dead: the summer doldrums! Step right up, ladies and gentlemen…place your bets…round and round she goes…where she stops only the flash traders know! Sukkah!!! How about this: all indices up except Dow Utilities which plunged 0.8% (but they can afford it). Meanwhile, the Russell 2000 ROSE 0.9%! Now look: Dow, Dow Transports and S&P +0.1%??? Better Still: Nasdaq Composite +0.3% while the 100 barely broke even…and that only due to Apple having a modest gain! Dow Financials were up just 0.2% but look at the subsectors: Brokers +1%?; KBW Banks +1.5%; and Nasdaq Banks +1.3% – that does not compute…except in the world of high frequency traders…and we have had two or three others in the past couple of months. Trading volume, you ask? Steady at 2.8B shares while Floor Trades plunged to a weak 608M shares pulling the 12-month average with them to an also weak 716M shares!!! Wake up!
Question: should yields on 10-yr. Spanish treasuries be lower than OUR 10-year??? TB’s friend, Mark Gilbert asks that question on Bloomberg today! Oh, and Italy is only 13 basis points higher than the U.S.! Also, UK, France, and Germany are all lower. Kind of blows a hole in the higher rates for U.S. scenario doesn’t it? Ever hear of arbitrage with currency markets? Lastly, and importantly, Greece took out its post-crisis low yield of 5.77% overnight and is now 5.42%!!! How long before it gets down to our level??? Makes you wonder, no? Junk bond yields also at extremely narrow spreads as demand overpowers sanity…or does it? You decide!
Total NYSE Volume as reported above was about even at 2.8B shares vs 2.84B vs 3.1B vs 2.78B vs 2.83B vs 2.5B vs 3.7B vs 2.68B vs 2.92B vs 2.89B vs 2.4B vs 2.74B! …WEAK!! Real trades on the floor of the NYSE fell to 608M shares vs 640M vs 629M vs 592M vs 657M vs 549M vs 916M vs 544M vs 636M vs 657M vs 554M vs 577M! The 12-month average dropped 1k to a very weak 717M shares!!!! Sorry to keep letting those numbers run but they tell a BIG story!!!
A/D’s were positive for a 3rd day – but slipped: NYSE +1.6x vs +2.9x vs +3.5x vs +1.1x vs -1.6x; Nasdaq +2.2x vs +2.5x vs +3.6x vs +1.2x vs -1.6x. Breadth was similar: NYSE +1.7x vs +2.3x vs +2.9x vs +1.3x vs -1.1x; Nasdaq +1.5x vs +2.4x vs +2.4x vs +1.7x vs -1.1x. New 52 Week Highs a tad lower at 515 vs 532 vs 436 vs 262 vs 225 vs 318 vs 271 vs 287 vs 229 vs 336 vs 167 – recent low 71!!! New Lows plunged again to a new recent and near record (?) low of 25 vs 36 vs 66 vs 96 vs 93 – recent range now 25-214.
S&P VIX gave back about half of Friday’s bullish dive closing at 11.15 +.42 with a tight range of 10.99-11.51. This could be a setup for a very volatile options expiration on 6/20! Thus there was just one close above ‘12’ in ten sessions and this was the 2nd time in five sessions that there was no ‘12’ print!
Bonds closed slightly weaker for a second day: 10 yr closed at 2.61% -3/16. 30 yr closed 3.45% -1/4. The long TIP, which hit a low of 0.978% on 5/29, closed 1.14% -1/8. Overnight weaker, especially in the long end: 10’s 2.63% -1/4; 30’s 3.46% -7/16; and long TIP 1.16% -5/8. 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: 0.230% 3 mos.; 0.321% 6 mos., both remain 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 higher, ex-Greece and Portugal: Germany 1.39% +1; UK 2.2% +2; France 1.74% +4; Italy 2.74% +4; Spain 2.57% –; Portugal 3.27%! -7!!!; Greece, has blasted through the old lows is now 5.42%!!! lower by another 19 and nearly 70 basis points in THREE sessions!!! – Translate that from basis points to $!!! The high on selloff was 6.75%. Highly volatile!!! Range is now 5.42% to 12.57%. Japan: 0.59% –.
Gold eked out a slight gain on a second straight inside session! On Friday it touched $1258.10 highest since 5/30, but failed to hold and closed yesterday at $1253.50 +$1.40. Last Tuesday’s $1240.20 was lowest since 1/31/14!!! It hit $1304.10 on 5/22 – the last time it saw $1300! It remains way below the 40/50/200 days and the psych support level of $1300 with first res at the 40 day $1285, then the 50 day $1288, and the 200 day $1295 – note convergence and thus formidable resistance! 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 is slightly higher at $1255.40 +1.50 in another inside session.
Crude had a huge rally surging to $104.57, highest since 4/21 closing near the high at $104.41 +$1.75!!! 6/5’s low of $101.60 was lowest since 5/16. 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 is now well above all three moving averages: 40 day ($102.17) then the 50 day ($102.02), and 200 day $100.19. The recent range is $85.61-$112.24 since March 1, 2012. Overnight it is $104.73 +.32, with a session high of $104.89..
Global equity markets mixed overnight, Japan weak, Korea strong: UK -0.3% vs +0.3% vs +0.4% vs +0.1% vs -0.3%; France +0.1% vs -0.1% vs +0.5% vs +0.6% vs -0.1%; Germany +0.2% vs +0.1% vs +0.3% vs +0.3% vs -0.2%; Japan -0.9% vs +0.3% vs – vs +0.1% vs +0.2%; Hang Seng +0.9% vs +0.7% vs -0.7% vs -0.2% vs -0.6%; Korea +1.1%! vs -0.3% vs closed vs -0.7% vs closed vs +0.3%; India – vs +0.7% vs +1.5%!!! vs +0.9% vs -0.2%; U.S. Stock Index Futures weaker and gapped down: DOW -25 (range 18!!!); SPX -4.30 (5); NDQ -8.25 (8).
Some random thoughts:
…why don’t our elected officials understand what is happening with the wealth gap? Here is a link that helps explain it… us-senate-personal-wealth-111th-congress
11 of them are worth more than $10 million (note wealth excludes personal residences), led by John Kerry (now Sec. of State) at $167 million. Another 25 are worth more than $2 million. Some of the others are so low as to defy logic…hmmm. Isn’t that 36%?
Here is another that has full data (disclosed that is), of all members of Congress and the history: Net_worth_of_United_States_Congress
Strangely, Democrats for the most part are wealthier…especially in the House with the exception of megamillionaire Darryl Issa ($464 million), yet they can’t understand why the minimum wage of $7.25 that was last raised in 2009, and hasn’t kept pace, not only with inflation but the states and some cities that have introduced a ‘living wage’.
Furthermore, our jobs are so distorted as to make them meaningless: the large number of part-time jobs, many of which represent double counting, especially when some of those have to take two or three just to make ends meet….and still remain at or below the poverty level!
Meanwhile the GOP grouses about food stamps, and unemployment benefits (last TB noticed that is a tax on individuals…not a deductible one either), and it exempts those who get preferential tax payment, just as the cap in Social Security does…why should their be a cap? Beats the hell out of me but then TB doesn’t understand how oridinary income becomes capital gains through the ‘carried interest’ provision of the tax code!
One other point to ponder: while we hear so much about Social Security and Medicare going down the rat hole, how come there is no discussion of the ZERO rate they are earning on U.S. treasury bills as mandated by Congress? ‘Splain it to me, Lucy, please!
Have a great day and have some heart…it does come back to help you and in fact may preserve your way of life…the majority won’t take it lying down forever…no way!