6/24/14…what do you really think, Dick?

Quote of the Day from the Friars Club Encyclopedia of Jokes: “After all; what is a pedestrian? He is a man with two cars – one being driven by his wife; the other by one of his children.”
– Robert Bradbury
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Bloomberg Quote of the Day: “Happiness makes up in height for what it lacks in length.” – Robert Frost…ain’t that the truth…bet a drug addict would agree with that analysis. TB

Bloomberg Top Stories:
*Carney Clarity Questioned as BOE Adjusts Message on Rate Increase Timing
*Stocks In Europe Drop With U.S. Futures; Pound Weakens as Treasuries Gain
*Apple’s Largest IPhones Said to Start Mass Production in China Next Month
*Dubai’s Stock Index Extends Rout With Biggest Decline Since October 2008
*Abe Plans to Legalize Integrated Casino Resorts This Year to Woo Tourists – ooooh!
*Dollar Volatility Falls to Record Low on Wagers Fed Will Keep Zero Rates – wanna bet?
*Hungary Cuts Main Interest Rate to Record After Inflation turns NEGATIVE – !!!
*Ex-Goldman Trader Cho Said to Plan Macro fund as Investors See Divergence
*Euphoria in Gold Market Won’t Last With Yellen’s Rally Fading
*Top Greek Tax Collector Must Restore Confidence in Commitment to Reforem – ya, sure…
*Wake Us Up when Finra Decided to Get Tough With Wall Street – fat chance!
*Immelt’s 100-Hour Work Week Amid Crystal Chandeliers Sealed GE Alstom Deal
*Putin Asks Russian Legislature to Revoke Deployment Rights in Ukraine – ASKS??? LMAO!
*Kerry in Erbil Urges Iraqi Kurd Leaders to Help Form a United Government – too late?!?
*Cameron to Make ‘Profound Apology’ After Culdson Found Guilty of Hacking…or profane?
*Kurds Weigh Whether to Deal With Iraq Government or Aim for Independence

Monday’s Market Summary:

Another incredibly boring session…not even bonds or commodities showed us anything. A/D’s and Breadth were almost 1:1 across the board! All indices were down from 0.55 (Transports) to -0.1% (Dow), except the NDQ 100 which eked out a 0.1% gain on breadth of just 1.3:1. Nothing else noteworthy except NYSE Financials which rose 0.1% but look: Brokers -0.3%; KBW Banks +0.3%; Nasdaq Banks -0.4%. Most active stock was BofA bucking the trend +1.2%???

Total NYSE Volume plunged from Friday’s option expiry induced 4.22B shares to a more typical 2.7B shares – about 300M below the long-term average! Aside from Friday, the highest recent volume was 3.17B at monthend. Real trades on the floor of the NYSE were slashed by two-thirds to a very weak 572M shares from Friday’s 1.72B – highest since 2B on 3/21 and an amazing 41% of the total volume!!! It has been running at 22% of the total with high frequency trading running as high as 24.6% of total which triggered the SEC investigation – finally!!! Before you get all excited though note that the volume just before the close was 970M with another 750M AT THE CLOSE!!! That, folks, is not retail buying!!! The 12-month average rose by 3k on the volume to 717M shares! But since 4/30 the average has been a pathetic 668M shares – boosted by 30M on Friday’s volume! and THAT was only due to 150M shares on the close!!! We are not only in the summer doldrums but retail buyers doldrums!

A/D’s were slightly negative and continue to be DULL: NYSE -1.01x vs +1.3x vs +1.3x vs +2.7x vs +1.6x; Nasdaq -1.3x vs +1.3x vs -1.2x vs +1.7x vs +2.1x. Breadth was barely a plus, more than one day the lowest TB can recall: NYSE +1.05x vs +1.1x vs +1.3x vs +4.3x!!! vs +2.2x; Nasdaq +1.06x vs +1.3x vs 1.3x vs 1:1 vs +2x vs +2.7x. New 52 Week Highs fell sharply to a mediocre 369 vs 469 vs 425 vs 328 vs 255 – recent range 71-515!!! New Lows fell by a third to 42 vs 60 vs 42 vs 40 vs 38 – recent range is 24-214.
S&P VIX was little changed again at a bullish (overly???) 10.98 +.13 but with ‘11’ prints again at the top of the range: 10.92-11.35 – inching higher, Are you a bull? Well, good for you!

Overnight markets:

Bonds closed lower in a quiet session – until diving in the final half hour!!! 10 yr closed at 2.63% -3/16. 30 yr closed 3.46% -1/4. The long TIP, which hit a low of 0.978% on 5/29, closed 1.10% –1/2. Overnight taking back Monday’s losses: 10’s 2.60% +3/16; 30’s 3.43% +7/16; and long TIP 1.07%! +9/16! 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: 0.233% 3 mos.; 0.326% 6 mos., both remain near their record lows, set recently: 0.222% and 0.320% respectively! NOTE the Fed Funds rate has averaged 0.08% since 5/22/13 and remains at 0.09% -0.10%. Foreign bond yields little changed: Germany 1.32% –; UK 2.74% +1; France 1.76% -1; Italy 2.88% -2; Spain 2.64%! -4; Portugal 3.44% -4; Greece, which took out the old lows is very strong at 5.73%! -13!!!. The recent high on selloff was 6.75%. Highly volatile!!! Recent range is 5.42% to 12.57%. Japan: 0.57% –.

Gold traded in a very tight range in an inside session indicative of a rally that has lost its ‘mo’. On 6/19 it made a slight new high of $1321.00, highest since 4/15 when it plunged. It closed at $1318.40 +$2.20 – its third straight close above $1300 since 4/14! Five days ago the high was $1285.10 – highest since 5/27 when it began its devastating plunge. 6/9’s $1240.20 was lowest since 1/31/14!!! It remains above all three key moving averages which are very tight: 200 day $1289, then the 50 day $1285, and the 40 day $1281 – but key is the psychological $1300 level 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 not only higher but with another new high of $1326.60 and is now $1325.80 +$7.30 with a low of 1314.50. Validity of rally is being tested.

Crude took a hit to $105.91 just one day after a run to $107.73 – highest since 9/19/13, a huge down session – and closed at $106.17 -.10 – still with just one close below $106 since rally began a week ago over Iraq. 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 remains well above all three moving averages: 40/50 day ($102.86) locked! Then the 200 day $100.11. The recent range is $85.61-$112.24 since March 1, 2012. Overnight it is little changed at $106.31 +.14 – bouncing off a low of $105.25.

European equity markets little changed and mixed – Asia led by Korea and India: UK -0.1% vs -0.2% vs +0.3% vs +0.7% vs +0.3%; France +0.1% vs -0.3% vs – vs +1%! vs –; Germany – vs -0.3% vs – vs +0.9% vs +0.2%; Japan +0.1% vs +0.1% vs -0.1% vs +1.6%! vs +0.9%; Hang Seng +0.3% vs -1.7%!!! vs +0.1% vs -0.1% vs -0.1%; Korea +1%!!! vs +0.4% vs -0.9% vs +0.1% vs -0.6%; India +1.4%!!! vs -0.3% vs -0.4% vs -0.2% vs +1.3%!; U.S. Stock Index Futures lower in quiet trading: DOW -20 (range 43); SPX -3.70 (6!); NDQ -2 (9!).

Some random thoughts:

…after yesterday’s well-deserved diatribe on Dick Cheney, TB has spent his energy. But there was one part of the Andrew Bacevich interview that TB omitted: the clips of Cheney from 2002, 2006, and 2008 showed a man who speaks with no consistency but the most shocking was one from 1994 – 20 years before his WSJ assault on Obama: he said that we did not invade Baghdad because ‘after you topple Saddam, who will replace him?’ Seems he conveniently forgot about that when he and Rummy decided to go whole hog and as Bacevich says, ‘upset the power structure of the Middle East. Not only did Bacevich say that, TB has repeatedly said that every since those famous 8×10 glossies were shown to the UN in a humiliation of Colin Powell from which he never recovered.

According to Bacevich, Powell held off the two neo-cons (Cheney and Rumsfeld) in cabinet meetings until his ally, Condoleeza Rice, ignored the advice of her former mentor Brent Scowcroft about not invading Iraq, and left Powell hanging out to dry. He capitulated (presumably to make it unanimous…aka fell on his sword), and the rest is a sad history..

TB has also previously commented on Powell’s chief of staff, Colonel Lawrence Wilkerson who said it came as a total shock when Powell caved on Iraq and WMD. He says he challenged Powell on it and he reprimanded Wilkerson on it and the two have not spoken since. Wilkerson’s credibility…gravitas???…however, has also come under question as he reportedly leaked anti-GOP and other facts to the press (some say with Powell’s turning the other way). His original comments however, made in a speech to the VFW, may be accurate.

Have a great day!

TB

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