6/26/14…no such thing as a free lunch…

Quote of the Day from the Friars Club Encyclopedia of Jokes: “I don’t think it’s fair to call people middle-aged just because they’re not so young anymore.” – Syd Hoff

Bloomberg Quote of the Day: “Never regret. If it’s good, it’s wonderful. If it’s bad, it’s experience.” – Victoria Holt

Bloomberg Top Stories:
*Carney Takes Action to Curb Mortgage Lending as Consumer Debt Risks Mount – HEED!!!
*Carney Surprises Confounding Markets as BOE Manages Policy With New Course
*BNP Said to Face Year-Long Dollar-Clearing Curb Under U.S. Sanctions Deal
*Emerging-Market Stocks Advance as Kiwi Strengthens With Pound; Gold Drops
*Alcoa to Acquire Aerospace Parts Maker Firth Rixson for About $2.9 Billion
*Cracks Open in Dark Pools Defense With Schneiderman’s Barclays Complaint – finally!!!
*Bling Gifts to Minister Mastermind Greased Secret Turkey-Iran Gold Trade – watch closesly!
*Paulson’s Puerto Rico Paradise Lures Hedge-Fund Traders Fleeing U.S. Taxes – Bastards!
*Iraq Shiite Leader Al-Sadr Calls for New Government After Show of Force – Bush legacy!
*Pentagon to Seek Warfighting Budgets After Afghanistan Combat, Hale Says – get real!!!
*Ukraine Peace Deal Optimism Wavers as Expiring Cease-Fire Deadline Looms – surprised?
*Obama, Citing His Record (?), Calls Climate-Change Skeptics ‘Fringe’ Element

Wednesday’s Market Summary:

A rally, not only a rally but the air-heads on CNBC could not stop talking about it…oh boy…the Dow had nothing but a feeble ‘dead cat bounce.’ It didn’t even retrace 50% of Tuesday’s loss. Consider: Dow +0.3% vs -0.7%; Transports +0.9% vs -0.9% (only one to break even); S&P 500 +0.5% vs -0.6%; NDQ Composite and 100 +0.7% vs -0.6% and -0.4% respectively. Russell 2000 +0.8% vs -1%. Dow Utilities however were up 0.6% vs +0.1%! NYSE Financials +0.1% vs -0.8%: Brokers +0.8% vs -1.5%; KBW Banks +0.3% vs -0.8%; Nasdaq Banks +0.6% vs -0.7%.Volume was stable at 3.1B shares vs 3.06B shares, down from 4.22B on Friday’s options expiration. Real NYSE Volume barely budged at 653M vs 648M and the 12-month average slid to 709M! Since 4/30/14 the average volume has been just 665M shares ranging from 531M to 1.72B if you ignore Friday’s ‘options-induced’ 4.22B share session.

Total NYSE Volume was 3.1B shares vs 3.06B vs vs 2.7B vs 4.22B vs 2.94B. Aside from Friday, the highest recent volume was 3.17B at monthend. Real trades on the floor of the NYSE came back to 653M vs 648M – still about 60M below the declining 12-month average (now 709M) vs 572M vs 1.72B – highest since 2B on 3/21. Don’t you just hate the summer doldrums?

(Mea culpa: yesterday’s data left out Monday in this section but were included in first paragraph.)
A/D’s were back to positive but meaningless: NYSE +2.2x vs -1.7x vs -1.01x vs +1.3x vs +1.3x; Nasdaq +1.7x vs -2.4x vs -1.3x vs +1.3x vs -1.2x. Breadth was similar: NYSE +2.2x vs -3.5x! vs +1.05x vs +1.1x vs +1.3x; Nasdaq +2.4x vs -2.3x vs +1.06x vs +1.3x vs 1.3x. New 52 Week Highs declined again to a weak 214 vs 288 vs 369 vs 469 vs 425 – recent range 71-515!!! New Lows rose to 64 vs 52 vs 42 vs 60 vs 42 vs 40 vs 38 – recent range is 24-214.
S&P VIX dipped a bit and remains in bullish (overly???) territory at 11.59 -0.54 vs 12.03 vs 10.98 but with ‘12’ prints at the top of the range for a second session: 11.37-12.33 – range has been stretching higher for four straight session after bottoming at 10.88!

Overnight markets:

Bonds closed higher for a second session more than reversing Monday’s mild selloff! 10 yr closed at 2.56%! +3/16. 30 yr closed 3.38% +5/16! The long TIP, which hit a low of 0.978% on 5/29, closed 1.02%!!! +9/16!!! Overnight they are little changed: 10’s 2.57% -1/16; 30’s 3.38% -1/32; and long TIP 1.02% -1/32. 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: 0.234% 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 0.09% since 5/22/13 and remains at 0.09% -0.10%. Foreign bond yields mixed after rallying late yesterday: Germany 1.27% +1; UK 2.68% +3; France 1.71% +1; Italy 2.84% -1; Spain 2.64% –; Portugal 3.45% +1; Greece, which took out the old lows remains strong at 5.74% –. The recent high on selloff was 6.75%. Highly volatile!!! Recent range is 5.42% to 12.57%. Japan: 0.56% –.

Gold traded in a narrow ranged despite hitting $1325.60 Tuesday – still highest since 4/15 when it swooned. It closed at $1322.20 +$1.30 – its fifth straight close above $1300 since 4/14! Six 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 $1288, then the 50 day $1285, and the 40 day $1283 – 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 is weak at $1312.70 -$9.50 and near bottom of range. Since Friday’s $41 rally it has done nothing but consolidate.

Crude closed higher in a nothing session and has swung wildly but with no new highs since 6/13. Tuesday’s low of $105.25, lowest since 6/12 – just two days after a run to $107.73 – highest since 9/19/13, a huge down session – delineated the range. It closed at $106.50 +.47 – still with just one close below $106 since rally began more than 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 day $103.22, 50 day $103.06, then the 200 day $100.07. The recent range is $85.61-$112.24 since March 1, 2012. Overnight it is little changed at $106.29 -.21.

Global equity markets slightly positive, Hong Kong strong; India hit! UK – vs -0.5% vs -0.1% vs -0.2% vs +0.3%; France +0.1% vs -0.7% vs +0.1% vs -0.3% vs –; Germany – vs -0.4% vs – vs -0.3% vs –; Japan +0.3% vs -0.7% vs +0.1% vs +0.1% vs -0.1%; Hang Seng +1.5%!!! vs -0.1% vs +0.3% vs -1.7% vs +0.1%; Korea +0.7% vs -0.6% vs +1% vs +0.4% vs -0.9%; India -1%! vs -0.2% vs +1.4% vs -0.3% vs -0.4%; U.S. Stock Index Futures slightly weaker in quiet trading: DOW -4 (range 28); SPX -1 (3!!!); NDQ +1 (5.50!!!).

Some random thoughts:

…hey all you 1%-ers! Are you still in the misguided belief that if you get 100 opinions and one says there is no global warming that is how you are going to play it? Even when that ‘one’ has been a shill for the tobacco industry and now the energy boys.

Think about that as you cheer shale oil production…fight elimination of coal…and in the meantime watch as the lakes and seas rise, tornadoes and hurricanes increase in number and intensity, and the number of 95+ degree days reaches alarming levels. If that is how you think…pity you…pity us.

Last night on PBS Newshour, Hank Paulson, you do recall him, right? …former CEO of Goldman Sachs and Treasury Secretary during the financial crisis talked about a group he is in of ‘thinkers’ who believe in global warming and are looking for solutions. He favors a carbon tax and that alone was enough to push Rush Limbaugh’s (the classic 1%er!) buttons as he decreed Paulson has joined the ‘global warming nuts’. Why in God’s name does anyone listen to the idiot? You know, Rush…the guy who started out a liberal but found their was more money in extreme right wing positions. Save us from him!

But here is the flaw in Paulson’s thinking…he thinks he can persuade CEO’s to take up the cause as it is in the long-term interest of their companies…WRONG! The short-term interest of the CEO (which does not coincide with shareholders) is the next quarter or next year. Their long-term interest is their tenure as CEO! That and making the Billionaire List. We have become a very sick society…sick indeed!

Lastly, A Chinese billionaire who moved to New York decided to do something good for the homeless in New York City. He hosted a lunch for them at the Boathouse in Central Park. Nice you say? Yep, he even had gourmet Chinese food…what a guy. How did he advertize it? Why by placing ads in the New York Times and WSJ!!! Concept! The poor and homeless don’t read those rags!

Anyway, many turned out who were then turned away as there was no more room. Chen got up and waved wads of bills and talked about how bad things are in China. On the table were big wire baskets filled with…money! Cash…cold cash!!! The poor attendees thought that they would be given money…it was not to be…and they became incensed. What? Don’t they know about ‘let them eat cake’? As for the reason he didn’t give out the money, which he originally had planned to do, he was advised that many of them would be addicts and thus he would be just enabling them to buy drugs.

Moral: no good deed goes unpunished…

Have a great day…and remember: there’s no such thing as a free lunch!

TB

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