6/12/14…another kind of exchange and the Middle East

Quote of the Day from the Friars Club Encyclopedia of Jokes: “Did you know that five out of three people have trouble with fractions?”

Bloomberg Quote of the Day: “Luck is what you have after you give 100%.”

Bloomberg Top Stories:
*BNP’s Chodron de Courcel to Leave Amid Lawsky Pressure Before U.S. Penalty
*Oil Rises as S&P Futures Little Changed; Kiwi Strengthens on Rate Increase
*Currency Riggers Threatened With Jail Time by Osborne After Libor Scandal – CONCEPT!!!
*Europe Bankers Cringe at Escalating U.S. Fines Amid BNP Sanctions Skirmish
*Platinum Workers Union to Seek Approval on Agreement to End 20-Week Strike
*Great Moderation 2.0 Seen Lasting by JPMorgan’s Normand Until Fed Shifts
*Carney Faces BOE Reckoning on Osborne Crisis Pledge at Debut Banker Speech
*World Cup Drones Help bust Rio Kingpin as Brazil Taps Israeli Technology
*Iraq Forces Seek to Halt Advance of Islamist Rebels Near Saddam’s Hometown
*U.S. House Leaders Look for Unity Replacement to Move Past Cantor’s Defeat
*Militants on March in Iraq Undo Legacy U.S. Sought After Toppling Saddam – saw it coming!
*U.S. House Leaders Look for Unity Replacement to Move Past Cantor’s Defeat – recall DeLay!
*Silicon Valley’s Welch Vows Nationwide Fight to Eliminate Teacher Tenure – 18mos. in Cal!?!

Wednesday’s Market Summary:

More of the same…on almost identical sluggish volume, all indices declined. This time led by Dow Utilities -1.2% vs flat vs -0.8%. Next came Dow Transports -0.8%, followed by the Dow-0.6%, S&P 500 -0.4%. Nasdaq Comp was off 0.4% while the 100 and the Russell 2000 were both off 0.1%. NYSE Financials were down 0.5%. BofA, the most active stocks fell 2.1%.

Total NYSE Volume was about even at 2.67B shares vs 2.69B vs 2.8B vs 2.84B vs 3.1B. Real trades on the floor of the NYSE plunged for a 3rd straight session to 532M shares vs 557M vs 608M vs 640M vs 629M. The 12-month average is a very weak 715M shares and slipping.
A/D’s were negative for a 2nd day in five sessions: NYSE -1.6x vs -1.4x vs +1.6x vs +2.9x vs +3.5x; Nasdaq -1.5x vs -1.2x vs +2.2x vs +2.5x vs +3.6x. Breadth similar except Nasdaq: NYSE -1.6x vs -1.01x vs +1.7x vs +2.3x vs +2.9x; Nasdaq +1.05x vs +1.3x vs +1.5x vs +2.4x vs +2.4x. New 52 Week Highs were very weak at 193 vs 256 vs 515 vs 532 vs 436 – recent low 71!!! New Lows still at their new record (?) low of 25 vs 24 vs 25 vs 36 vs 66 vs 96 – recent range now 24-214.
S&P VIX continued to porpoise, rising back to 11.63 +.63 with a range of 11.19-11.87. This could be a setup for a very volatile options expiration on 6/20! There has been just one close above ‘12’ in 12 sessions and this was the 4th time in six sessions that there was no ‘12’ print!

Overnight markets:

Bonds closed a little better following three straight losers: 10 yr closed at 2.64% +1/16. 30 yr closed 3.46% +5/16. The long TIP, which hit a low of 0.978% on 5/29, closed 1.16% -1/8. Overnight, slightly weaker: 10’s 2.65% -1/16; 30’s 3.47% -1/8; and long TIP 1.17% -1/4. 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: 0.231% 3 mos.; 0.324% 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 little changed and mixed: Germany 1.39% -1; UK 2.72% +2; France 1.74% -1; Italy 2.79% –; Spain 2.66% +3; Portugal 3.30% –; Greece, which took out the old lows is now 5.60% -1 after plunging 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 closed higher at $1261.20 +$1.10 with an intraday high of $1265.50, highest since May 28th – still, it is meaningless. 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 $1282, then the 50 day $1286, and the 200 day $1294 – 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 y higher at $1265.80 +4.60….session high $1267.10.

Crude, despite Tuesday’s print of $105.06, highest since 3/3, went nowhere, closing at $104.40 +.05. 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 well above all three moving averages: 40 day ($102.20) then the 50 day ($102.13), and 200 day $100.18. The recent range is $85.61-$112.24 since March 1, 2012. Overnight it is rallying: $105.88 +$1.48 with a high of $106.34!

Global equity markets mixed: UK +0.2% vs -0.5% vs -0.3% vs +0.3% vs +0.4%; France +0.2% vs -0.8% vs +0.1% vs -0.1% vs +0.5%; Germany +0.1% vs -0.9% vs +0.2% vs +0.1% vs +0.3%; Japan -0.6% vs +0.5% vs -0.9% vs +0.3% vs –; Hang Seng -0.4% vs -0.3% vs +0.9% vs +0.7% vs -0.7%; Korea -0.2% vs +0.1% vs +1.1%! vs -0.3% vs closed; India +0.4% vs -0.4% vs – vs +0.7% vs +1.5%; U.S. Stock Index Futures little changed: DOW +8 (range 13); SPX +1.10 (4!); NDQ +1.75 (8!!!).
Some random thoughts:

…Eric Cantor surrendering his position as House Majority Leader due to his unexpected defeat in Tuesday’s primary. Too bad the same didn’t happen to Grumpy: Mitch McConnell who blasted Obama for trying to do something to help students…finally, among other things. We don’t need this grumpy old man in control of the GOP in the Senate…and worse he might replace the flatulent Harry Reid as Majority Leader. How about an exchange: we will give up Reid if the GOP gives up McConnell? DEAL!!!

As we continue (semantics if you think it is over) the two longest wars in U.S. history, it becomes increasingly clear that Al Qaeda was merely an excuse for us to topple Saddam, and in the meantime upset the entire balance of power in the Middle East by taking pressure of Iraq!

We went into Iraq ‘expressly’ to get Bin Laden…and stayed at a huge cost to our country both economically and soldiers lives and limbs.

While Bush (Dubya that is), will get the blame, is there any wonder that it was orchestrated by Cheney and Rumsfeld? Powell fought them until Condaleeza Rice sided with them and he threw in the towel leading to that embarrassing display at the UN with those stupid photos that proved nothing…nothing that is without the accompanying dogma…since proven wrong!

What’s a nation (a people) to do? We opted for change with Obama and got more of the same with just his ‘feel good’ speeches that lacked substance…still lack!

Time to rethink…and Cantor being ousted may mean surprises in November…time will tell…

Have a great day!

TB

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