Quote of the Day from the Friars Club Encyclopedia of Jokes: “If you can’t find a lawyer who knows the law, find a lawyer who knows the judge.” – anon
Bloomberg Quote of the Day: “Lost time is never found again.” – Benjamin Franklin
US economic data in the past two weeks has been mixed. The trend in jobless claims improved modestly, suggesting a stronger payroll report is possible for July. Regional manufacturing surveys were strong and indicate a positive bias for ISM Manufacturing this month. Retail sales improved moderately in Q2 suggesting that the consumer spending accelerated from its 1% Q1 pace, current estimates are for 3.3% Q2 GDP growth. Next week’s economic calendar is fairly light. The highlight of the week will be the June CPI (Tuesday) and June Durable Goods Orders (Friday). We will also get July Richmond Fed Manufacturing and June Existing Home Sales (Tuesday), and June New Home Sales (Thursday). Courtesy of Economic Advisory Service
Bloomberg Top Stories:
*Russia Stocks Drop With Bonds as Sanctions Concerns Grow After Jet Downing
*Finance Industry Shows Pessimism on Bonus in Poll as Revenue Disappoints
*Stocks in Europe Decline With Russian Equities as Gas, Spanish Bonds Rise
*Barclays Dark Pool Volume Slumped by 66% Week After New York Filed Lawsuit
*Yellen’s Earnings Gauges Blurred by Boomer-Millennial Shift in Workplace
*Dark Pool Disfavor Above 50% in Poll Showing Concern Over Speed of Trading – ya don’t say!
*Foreign-Exchange Rigging Probe Said to be Readied by U.K.’s Fraud Office
*McDonald’s, Yum Halt Orders From China Supplier on Out-of-Date Meat Report – yuck!!!
*World Is No Less Ablaze Than Where We Left You Off on Friday – …perhaps worse!
*Russia’s Richest in ‘Horror’ as Putin Risks Global Isolation Over Ukraine – rein him in!
*Putin Defying Critics Says Jet Crash Shouldn’t be Used for Political Ends – what then?
*Gaza Battle Spurs Diplomatic Effort to End Conflict as Death Toll Tops 500 – worrisome!
*Obama Seen Gaining Over Putin as U.S. Cites Crash to Press for EU Action
*Clinton Earns $12 Million Aftrer Obama Service, Eroding 2016 Income Message – the rich get…
Friday’s Market Summary:
Nice rally, albeit suspicious. Note that Friday was options expiration…something TB missed amongst all the turmoil! The two Nasdaq’s and lagging of late, Russell 2000 were all up 1.6% for honors – doesn’t that strike you as strange? Next came Dow Transports +1.3% followed by Dow Utilities +1.1%, then the S&P +1% and bringing up the rear the Dow +0.7%. NYSE Financials +1% (Brokers +1.9%!; KBW Banks +1.1%; Nasdaq Banks +1.2%)…make sense to you? Not to TB!
Total NYSE Volume declined to 3.1B shares vs a solid 3.44B vs 2.66B vs 3.14B vs 2.82B. Last real above average volume was 4.25B (end of quarter). Real NYSE Volume finally rose to a strong 758M shares (150M at the bell however!) vs 592M vs 583M vs 654M vs 570M – 537M on 7/3 was second weakest since April 30th .. There have been just two sessions above 800M since 4/28! The 12-month average remains at a very weak 705M. Since 4/30 the average volume has been just 676M shares ranging from 531M to 1.72B.
A/D’s were strong: NYSE +4.5x vs -4.3x vs +1.2x vs -2x vs +1.8x; Nasdaq +3.7x vs -2.5x vs+1.7x vs 1:1 vs -3x. Breadth was similar: NYSE +3.6x vs -5.3x!!! vs +1.8x vs -1.6x vs +2.1x; Nasdaq +6.2x!!! vs -3.7x! vs -1.1x vs -1.7x vs +1.5x. New 52 Week Highs sharply higher at 184 vs 132 vs 186 vs 154 vs 235 – recent range is 71-580!!! New Lows plunged to 77 vs 132 vs 79 vs 83 vs 53 vs 57 – recent range is 24-214.
S&P VIX reversed again but ‘12’ held: 12.27 -2.27!!! with a range of 12.04-13.65. Nearing bullish territory again but Friday was options expiration.
Bonds closed weaker following Thursday’s TEN basis point rally on the plane downing: 10 yr closed at 2.48% -5/16. 30 yr closed 3.29% -9/16. The long TIP, which hit a new recent low of 0.91% on 7/17, closed at 0.93% -9/16. Overnight they are slightly higher: 10’s 2.48% +1/32; 30’s 3.28% +1/8; and long TIP 0.92% +7/216 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.; 0.327% 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 little changed: Germany 1.15% –; UK 2.58% +2; France 1.56% -1; Italy 2.76% -2; Spain 2.56% -3; Portugal 3.65% –; Greece 6.13% –. The recent high on selloff was 6.75%. Highly volatile!!! Recent range 5.42% to 12.57%. Japan: 0.54% –.
Gold had an inside session and closed slightly lower at $1309.40 -$7.50 – only the 2nd close above $1300 after falling for four days! Psychological support remains at $1300. Last Thursday’s session high was $1346.60, highest since March 19th!!! Just 2 closes below $1300 in 20 sessions since plunging on 4/14! 6/9’s $1240.20 was lowest since 1/31/14!!! It is back above all three key moving averages which remain near locked and are CRITICAL: 50 day $1292, then the 40 day $1292 and 200 day $1288!!! Note the recent high of $1392.60 on 3/17, highest high since 9/4/13, then ended the session with a negative key reversal sparking the downturn! Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Overnight it has gained back Friday’s loss and is now $1317.50 +$8.10 in a narrow inside session – watch $1300!!!
Crude had an even narrower inside session, closing at $103.13 -.06. Tuesday’s session low was $90.01 – lowest since 3/21 – SIX 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 $99.94 – the 200 day! 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 has resistance at the 50 day ($103.64), thenthe 40 day $104.11, SUP the 200 day $99.92!!! The range is $85.61-$112.24 since March 1, 2012. Overnight it is slightly higher at $103.43 +.41.
Global equity markets remain weak: UK -0.3% vs -0.4%; France -0.4% vs -0.2%; Germany -0.9% vs -0.7%; Japan closed vs -1%; Hang Seng -0.3% vs -0.3%; Korea -0.1% vs -0.1%; India +0.3% vs +0.3%. U.S. equity futures weaker: DOW -37 (range 42); SPX -4.30 (6); NDQ -4 (11)
Some random thoughts:
…there is far too much going on to think that fundamentals mean anything here…best to ‘cocoon’ oneself and wait for the dust to settle…TB is thoroughly disgusted.
…still…hope you have a great week…don’t let the bastards get you down! Like Putin!!!