Quote of the Day from the Friars Club Encyclopedia of Jokes: “Golf is a lot like business. You drive hard to get in the green, and then wind up in the hole.” – Anon
Bloomberg Quote of the Day: “Never trust a computer you can’t throw out a window.”
– Steve Wozniak
Bloomberg Top Stories:
*Stocks Plunge With Portuguese Bonds as Yen Rallies; Oil Falls for 10th Day!!!
*Banco Espirito Santo Shares Suspended From Trading by Portugal Regulators – !!!
*Slim Prepares for Transition as His Most Prized Asset Splinters in Mexico – AMX was +10%
*Fed’s Bullard Says Decline in Unemployment Will Push Inflation Above 2% – Balderdash!!!
*Why Putin Raiding $88 Billon Sovereign Fund Won’t Cure What Ails Russia
*Bank of England Considers Banning Lenders From Using Not Using Their Own Risk Models
*McKinsey Says Bond Dealers Could Increase Profit 30% Through Customer Fees – uh huh
*Spinversions Make Giants Like GE Candidates to Escape U.S. Tax Collectors
*Labor Crunch Besets U.S. Restaurants as Demand Soars in Improving (?) Economy
*For Those Who Miss Europe’s Debt Crisis, Today Is Your Day – take ‘er down!
*Steven Mandis Evolves From Goldman Sachs Ethics Author to High-Rate Lender – see, they just can’t help themselves…like GE…Medtronics and the rest of the lot!
*Israel Mobilizes 20,000 Soldiers for Possible Gaza Strip Ground Invasion – very bad idea!!!
*European Union May Add Names to Russia-Ukraine Sanctions List Amid Clashes – ditto
*U.S. Said to Expand Power-Up Checks of Mobile Devices to Domestic Flights – swell!!!
*Hamas Dares Israel to Take Its Best Shot as Early Cease-Fire Seen Unlikely – they want it and ‘roped dope’ Israel is pushing us towards global jihad…sucker-punched through their pride!
Wednesday’s Market Summary:
A minor rally following two straight weak sessions…and of course, something we have come to expect: it was done on weak and declining volume (total 2.82B shares vs 3.23B, floor trades just 570M vs 683M). with the NDQ 100 leading the way again but muted and in the opposite direction, +0.8% vs -1.2%! The Nasdaq Composite was next at +0.8% vs -1.4%!). while the Dow, Dow Transports and the S&P 500 were all up just 0.5% – Dow and S&P were both -0.7% Tuesday while Transports were off 0.1%. The Russell 2000 which lost 1.2% Tuesday was up just 0.1%!
NYSE Financials were up just 0.3% vs after losing 1.2%: Brokers -0.5% vs -2.1% vs -1.1%; KBW Banks +0.1% vs -1.1% vs -0.7%; Nasdaq Banks +0.1% vs -1.1% vs -1%! Getting uglier!
BAC dropped to 3rd most active +0.1% vs -2.2%!!! Bonds were weak in the morning but came back after release of Fed minutes to close slightly better following two straight rally sessions. Gold closed modestly higher while Crude put in a new low of $101.80, lowest since 5/16/14! It closed at $102.29 -$1.11…its NINTH straight decline and lowest close since 5/14!
Total NYSE Volume declined to a sub-3B level which is very weak and negates the modest rally (dead cat bounce?) to 2.82B shares vs 3.22B vs 2.66B vs an extremely weak 1.99B vs 2.83B. Last real above average volume was 4.25B (end of quarter). Real NYSE Volume plunged again to a weak 570M shares vs 683M vs 602M vs 537M – second weakest since April 30th vs 597M –contrast to 1.49B at end of quarter. That and options expiry’s 1.72B shares the only ones above 800M since 4/28! The 12-month average is a very weak 705M. Since 4/30 the average volume has been just 677M shares ranging from 531M to 1.72B.
A/D’s were only modestly positive: NYSE +1.3x vs -1.5x vs -2.2x vs +1.3x vs -1.6x; Nasdaq +1.2x vs -3.8x vs -3.9x vs +2.1x vs -1.2x. Breadth was similar! NYSE +2.2x vs -2.6x vs -3.4x vs +2.8x vs +1.05x; Nasdaq +1.5x vs -6.2x!!! vs -3.5x vs +2.2x vs -1.01x vs +3.7x. New 52 Week Highs rose modestly to 145 vs 93!!! vs 187 vs 324 vs 319 vs 580 – recent range is 71-580!!! New Lows were stable at a weak 49 vs 53 vs 27 vs 26 vs 27 – recent range is 24-214.
S&P VIX declined slightly to 11.65 -.33 but from 12.11 vs 11.33 after being below 11 once which was overly bullish! The range was 11.50 -12.05. 2nd time in 6 sessionss the high end of the range was above ‘12’. Last Thursday’s close was a new recent low 10.32, barely taking out 10.34 on June’s options expiration!
Bonds closed slightly better after coming back on release of the minutes of the last FOMC meeting. 10 yr closed at 2.55% +1/32. 30 yr closed 3.37% –. The long TIP, which hit a low of 0.978% on 5/29, closed 0.988%!!! +1/2, Overnight they are continuing to rally and gaining ‘MO’: 10’s 2.51 +3/8; 30’s 3.34% +5/8; and long TIP 0.96%!!! +11/16. 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: 0.234% 3 mos.; 0.327% 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 is 0.08-0.10% where it has been for weeks! Foreign bond yields lower except PIIGS! Germany 1.18% -4; UK 2.60% -6; France 1.62% -4; Italy 2.92% +4; Spain 2.79% +4; Portugal 3.86%!!! +11!!!; Greece 6.11%!!! +14. The recent high on selloff was 6.75%. Highly volatile!!! Recent range 5.42% to 12.57%. Japan: 0.54% -1.
Gold closed higher but in another ‘nothing’ session at $1324.30 +$7.80. Friday’s low of $1310.00, lowest since 6/20 while 7/1’s high was $1334.90 – highest since 3/24! This is the 14th straight close above $1300 since plunging on 4/14! 6/9’s $1240.20 was lowest since 1/31/14!!! It is above all three key moving averages which remain locked: 50 day $1291, then the 40/200 day $1288! Key is the psychological $1300 level. It appears stalled after coming back from the 3/17 selloff 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 it is rallying at $1343.00 +$18.80 – near the session high of $1345.80, highest since 3/19!
Crude continued its selloff and is gaining momentum, its 9th straight decline since 6/25. The low was extended again to $101.80 – lowest since 5/16 before coming back to close at a weak $102.29 -$1.11 – FIVE handles since 6/30! 6/20’s run to $107.73 – highest since 9/19/13, a huge down session – has it in freefall with critical support next at $99.95 – the 200 day! 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 below the 40 and 50 day moving averages and heading for the 200 day! RES at 50 day $103.40, 40 day $104.23, SUP the 200 day $99.96!!! The range is $85.61-$112.24 since March 1, 2012. Overnight it is weaker again at $101.75 -.54 with a low of $101.55…still lowest since 5/16!!!
European equity markets slammed; Asia mixed: UK -0.8% vs -0.4% vs -0.6% vs -0.5% vs +0.5%; France -1.4%! vs +0.2% vs -0.5% vs -1% vs +0.4%; Germany -1.4%! vs +0.2% vs -0.5% vs -0.5% vs +0.6%; Japan -0.6% vs -0.1% vs -0.4% vs -0.4% vs -0.1%; Hang Seng +0.3% vs -1.6%!!! vs – vs – vs -0.1% vs +1.6%; Korea +0.1% vs -0.3% vs +0.1% vs -0.2% vs -0.2%; India -0.3% vs -0.5% vs -2%!!! vs +0.5% vs -0.1% vs +1.3%; U.S. equity futures in freefall: DOW -143!!! (range 160!!!); SPX -17.40!!! (21!); Nasdaq 100 -34.50!!! (37!). Very ugly!!! Right, bulls?
Some random thoughts:
…when will U.S. corporations be brought to task for their unconscionable tax avoidance? Only when Congress gets off its fat ass and changes and enforces the tax code and government bidding regulations. That is highly unlikely thanks to the GOP which is becoming very adept at transferring attention to immigration issues (while stonewalling any and all attempts at reform.
But remember the corporations (as morally bankrupt as they are), are following the capitalist model: maximize shareholder value…or is it CEO compensation? This is destroying our nation and at the same time creating an oligarchy through a morally-bankrupt Congress…follow the money!
You all know this…just admit it and do something about it instead of being dragged into things like healthcare and immigration that are simply diversions that David Copperfield would admire. As Lee Iacocca said: “you can lead, follow, or get out of the way.” This time however, getting out of the way is not an option. The light at the end of the tunnel IS an oncoming train!
Enjoy your day while the U.S. declines for the benefit of the few, rich, the unproud.