7/1/14…the best 99 cent book money can buy…

Quote of the Day from the Friars Club Encyclopedia of Jokes: “Hypochondria is the one disease I haven’t got.” – anon

Bloomberg Quote of the Day: “And that’s the way it is.” – Walter Cronkite…or was…not “and that’s the way WE see it.” – the gospel according to FOX NEWS

Bloomberg Top Stories:
*BNP Paribas Rises Most in Year as Bank Maintains Dividend Plan After Fine
*Stocks Advance With Oil as Treasuries Decline on China Data; Pound Rallies
*UBS Passes UniCredit, Barclays to Top Covered-Bond Rankings for First Time – oh gee!
*Chrysler’s U.S. Sales Increase of 9.2% Marks 51st Straight Monthly Climb – thank you, Fiat!!!
*European Banks Under U.S. Scrutiny as BNP Pays $8.97 Billion Fine – what about U.S. Banks?
*New York Is On a roll With Greenwich Atop Bloomberg U.S. Sushinomics Index – arigato!
*Power Companies at Risk From ‘Energetic Bear’ Hacker Group, Symantec Says
*GM Recalls 8.45 Million More Vehicles in North America for Various Faults – need govt. bailout?
*Recovery’s First Step Is Admitting Problem as HSBC Ditches ‘Optimism Bias’ – pessimists!
*Richest Ukrainian Dodges Insurgent Crossfire in $23 Billion Tightrope Act
*Ukraine Troops Resume Attack Against Rebels in East After Cease-Fire Ends
*Iraq’s Kurds Vow to Keep Kirkuk Fields Amid Independence Referendum Plans
*Pennsylvania’s Corbett Refuses to Sign Budget on Concern Over Pension Cost
*Christian Fuehrer, East German Pastor Who Led Honecker Revolt, Dies at 71

Monday’s Market Summary:

Looking like a long boring summer! A particularly dull session for quarterend proving that Friday’s high volume was strictly due to position squaring for quarterend – especially index funds! The volume however was spent on Friday in anticipation of a lack of players yesterday: 3.02B shares vs 4.25B vs 2.78B. Real trades on the NYSE floor were halved but to a still strong 792M (with 290M AT THE BELL!!!) vs 1.49B shares Note that Friday’s volume at 1pm was just 520M shares…that means nearly 900M shares at the bell!!! What’s that old adage? Never short a thin market!!! – True then and truer now!
What a range of results though: Dow -0.2%!; S&P 500 FLAT; Dow Transports and Russell 2000 +0.3% and the two Nasdaqs up about 0.2%. Oops…forgot Dow Utilities – yep, they took honors again with a solid 0.8% gain!

Note we will get payrolls report on THURSDAY due to the Fourth of July holiday!

Total NYSE Volume was another weak 3.02B shares in contrast to Friday’s strong 4.25B vs 2.78B vs 3.1B vs 3.06B – Friday was almost the same as the 4.22B on the prior Friday’s options expiration! Real NYSE Volume was halved but to a still strong 792M shares from 1.49B shares – compare to options expiry’s 1.722B shares – vs 592M (with included 100M AFTER the bell!) vs 653M vs 648M while the 12-month average dipped back to a very weak 707M – note the effect of losing those higher volume days just before yearend are dropping off Since 4/30 the average volume has been just 696M shares ranging from 531M to 1.72B.

A/D’s were slightly positive: NYSE +1.5x vs +2x vs +1.1x vs +2.2x vs -1.7x; Nasdaq +1.3x vs +1.7x vs -1.1x vs +1.7x vs -2.4x. Breadth was similar: NYSE +1.2x vs +1.3x vs +1.02x vs +2.2x vs -3.5x! Nasdaq +1.7x vs +1.5x vs +1.1x vs +2.4x vs -2.3x. New 52 Week Highs rose again to 392 vs 301 vs 221 vs 214 vs 288 vs 369 vs 469 – recent range 71-515!!! New Lows slumped to a very weak 34 vs 42 vs 51 vs 64 vs 52 – recent range is 24-214.
S&P VIX rose to 11.57 +.31 – still in bullish territory but for the first time in SIX sessions the high end of the range was (slightly) below ‘12’: 11.30-11.81 – range had been stretching higher for five straight sessions after bottoming at 10.34 options expiration!

Overnight markets:

Bonds closed the month slightly stronger…a good month and a very strong quarter with yields plunging 25 basis points from the 10 year out the curve!!! 10 yr closed at 2.53% +1/16. 30 yr closed 3.36% +1/8. The long TIP, which hit a low of 0.978% on 5/29, closed 0.997% +1/16. Overnight: 10’s 2.55% -3/16; 30’s 3.38% -3/16; and long TIP 1.02% -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: 0.232% 3 mos.; 0.328% 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 are back to 0.09-0.10% from quarterend’s 0.01-0.05%!!! They have been 0.09%-0.10% for weeks! Foreign bond yields modestly higher except Spain, Portugal and Greece, which are lower: Germany 1.25% +1; UK 2.70% +3; France 1.71% +1; Italy 2.84% –; Spain 2.64% -1; Portugal 3.57% -5; Greece 5.82% -3. The recent high on selloff was 6.75%. Highly volatile!!! Recent range 5.42% to 12.57%. Japan: 0.55% -1.

Gold closed slightly higher at $1322.00 +$2.00 BUT after trading up to $1334.40 – highest since 4/14, a day before it swooned. This is the 8th straight close above $1300 since 4/14! 6/9’s $1240.20 was lowest since 1/31/14!!! It remains above all three key moving averages which are nearly locked: 200 day $1288, then the 50 day $1286, and the 40 day $1285 – key is the psychological $1300 level. It is coming back from a selloff that has been in place since 3/17 when it set 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 higher at $1326.50 +$4.50 BUT note the high of $1334.90 – highest since March 24th!

Crude did the opposite: it plunged to $104.66 intraday – lowest since 6/12 before coming back to close at $105.37 -.37 (4th straight close below $106). 6/20’s run to $107.73 – highest since 9/19/13, a huge down session – has left it in limbo and showing signs of more weakness to come. 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 $103.67, 50 day $103.16, then the 200 day $100.04. The range is $85.61-$112.24 since March 1, 2012. Overnight it is slightly higher at $105.69 +.32 in another narrow range session. Monday’s low of $104.66 makes it extremely vulnerable!

European equity markets higher; Asia mixed – Japan strong: UK -0.1% vs +0.1% vs — vs -0.5% vs -0.1%; France -0.3% vs – vs +0.1% vs -0.7% vs +0.1%; Germany +0.2% vs +0.1% vs – vs -0.4% vs –; Japan +1.1%! vs +0.4% vs -1.4% vs +0.3% vs -0.7%; Hang Seng closed vs -0.1% vs +1.5% vs -0.1% vs +0.3% vs -1.7%; Korea -0.2% vs +0.7% vs -0.3% vs +0.7% vs -0.6% vs +1%; India +0.4% vs +1.3% vs +0.2% vs -1% vs -0.2% vs +1.4%; U.S. Stock Index Futures moderately higher: DOW +35 (range 38); SPX +4.10 (4!?!); NDQ +11.50 (8!?!).

Some random thoughts:

…imagine a 99 cent eBook!!! They are out there on Amazon. Bill Moyers (not to be confused with O’Reilly), interview with investigative reporter Charles Lewis sparked TB to use his Kindle to find his new book. In addition to it, he found another by Lewis and four other investigative reporters (really a series of articles) on …the Koch brothers! The Koch Club by the Inveitgative Reporting Workshop (which, believe it or not, has received funds from the Koch’s but did not succumb to their attempt at bribery). If you thought this family was evil before you will be even more disgusted with the way they give libertarianism a bad name. They are using their wealth to buy off foundations, colleges (especially George Mason University) to do their bidding to lobby against environmental research (greenhouse gases). They have pumped money into the Tea Party (its main source of funding!), and dozens of Republican candidates – and a few conservative Democrats) and have been successful in damaging the EPA and getting a bill to restrict spending on environmental research without an equal cut in other budget spending, through the puppet House (Boehner is one of theirs, by the way). Fortunately, and this is why this election is so important, the Senate killed it.

Readers know of TB’s loathing of Grover Norquist and his pledge that he got…Republicans to sign that they would not raise taxes (which to Norquist means even removing a subsidy!)…while the Koch brothers have done the same on environmental research on greenhouse gases and opposition to a carbon tax – and to reduce the EPA’s budget (EPA was a Richard Nixon program by the way) – and they managed to severely slash its budget. This from the worst polluters in the country (and they are heavily in the oil business!), who have paid hundreds of millions in fines for oil spills and safety violations!

TB will vote Democrat in this election if for no other reason to attempt to stop this deceitful family. If Congress loses its balance – as the House has already – God help us, because they will not be oligarchs…they will be kings! Is that what you want for America and your kids?

Have a terrific day…and don’t trust the markets this week…or this summer…or…

TB

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