7/24/14…in free market captialism we trust…or do we?

Quote of the Day from the Friars Club Encyclopedia of Jokes: “Men know that if a woman had to choose between catching a fly ball and saving an infant’s life, she would probably save the infant’s life without even considering whether there are men on base.” – Dave Berry

Bloomberg Quote of the Day: “Always remember that the future comes one day at a time.”
– Dean Acheson (Secretary of State under Dwight D. Eisenhower…and a good one too!)

Bloomberg Top Stories:
*Credit Suisse to Exit Commodities After Bank Has Biggest Loss Since 2008 – risk averse?
*Global Stocks Advance as Gold, Treasuries Drop; Rupiah Weakens at Election
*Indonesian Stocks, rupiah Drops as Prabowo Pulls Presidential Vote Monitors – Muslim sumer?
*CIT Agrees to Buy Onewest Bank for $3.4 Billion in Cash, Stock Transaction
*Putin is Left Out of Global Market Rally as $28 Billion Erased From Micex – good! More please!
*Draghi Cedes Control of Euro to Yellen as Bond Link Dissolves – viva la Fed!
*Small-Cap VIX Highest to S&P 500 Since 2006 Echoing Valuation Concerns – as it should!
*Coca-Cola Misses Sales Estimates as Demand for Juice, Diet Coke Slow Down – another red flag!
*Half of Europe’s Jobs Threatened by Machines in Echo of Risk Facing U.S.
*Dubai Haven Status Frays as Investor Risk Follows Iraq Higher – significant!
*Santander Torn as Botin’s Guggenheim-Like Arts Center Divides His Hometown
*ConocoPhillips Proves Best Among 401(k) Plans With Facebook Least Generous – natch!
*EU Works to Punish Russia as Bodies From Jet Crash Leave Rebel Territory – just do it!
*Widodo Heads for Indonesia Presidential Win as Prabowo Challenges Validity – another torch?
*Bloody Scenes Haunt Children as Bombs Fall in Israel-Palestinian Fighting – tragic!
*Ukraine Joins North Korea No-Fly Zone as Carriers Seek Firmer Route Rules

Monday’s Market Summary:

Your basic down day with nobody home. Volume slumped to 2.58B shares and traded on the floor of the NYSE plunged to 541M – second lowest of 2014 (barely). All indices were off from 001% (Dow Utilities) to 0.4% (NDQ 100)…nothing to see here folks! So lets look at bonds…shall we? They had a nice rally that faded into the close but with the long bond closing at 3.25% – a new 12-month low! Long Tips,likewise to 0.90%. Gold had a second straight ‘inside session’ – a very narrow range too, while Crude rallied to $104.99 (highest since 4/2), before settling at $104.59 +$1.46. Now for the details:
Total NYSE Volume plunged to a very weak 2.58B shares vs 3.1B vs 3.44B vs 2.66B vs 3.14B. Last real above average volume was 4.25B (end of quarter). Real NYSE Volume plunged to the third lowest of 2014 (531M was the low) – with 236M at the bell!!! This vs a strong 758M shares 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 704M. Since 4/30 the average volume has been just 674M shares ranging from 531M to 1.72B.

A/D’s were modestly negative: NYSE -1.7x vs +4.5x vs -4.3x vs +1.2x vs -2x; Nasdaq -1.6x vs +3.7x vs -2.5x vs+1.7x vs 1:1. Breadth was mixed…sort of: NYSE -1.6x vs +3.6x vs -5.3x!!! vs +1.8x vs -1.6x; Nasdaq +1.07x vs +6.2x!!! vs -3.7x! vs -1.1x vs -1.7x. New 52 Week Highs declined to 150 vs 184 vs 132 vs 186 vs 154 vs 235 – recent range is 71-580!!! New Lows steady at 76 vs 77 vs 132 vs 79 vs 83 vs 53 vs 57 – recent range is 24-214.
S&P VIX reversed yet again closing at: 12.86 +.75 with a narrow range of 12.46-13.62. Watch.

Overnight markets:

Bonds rallied in the long end with both the 30-yr and long TIP at 12 month highs, while 10’s did slightly better, still affirming Thursday’s TEN basis point rally on the plane downing: 10 yr closed at 2.47% +1/8. 30 yr closed 3.25% +5/8. The long TIP, at a new 12-month low of 0.90% +7/8. Overnight they are weaker: 10’s 2.49% -1/4; 30’s 3.28% -7/16; and long TIP 0.92% -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.; 0.327% 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 higher: Germany 1.17% +2; UK 2.60% +4; France 1.58% +2; Italy 2.77% –; Spain 2.56% –; Portugal 3.69% +4; Greece 6.14% +1. The recent high on selloff was 6.75%. Highly volatile!!! Recent range 5.42% to 12.57%. Japan: 0.53% -1.

Gold had a rare second straight inside session and closed slightly higher at $1313.90 +$3.50 – 3rd straight 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 21 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 $1293, the 40 day $1293 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 is weaker at $1309.90 -$5.60 in a third straight inside session – something must give…and soon. Up or down? U pick ‘em.

Crude had a nice rally climbing to $104.99, highest since 7/2 before closing at $104.59 +$1.46. 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. Resistance is now at $106.19, the 6/27 high just before the plunge. Support at the 40 day ($104.14), then the 50 day $103.82, and the 200 day $99.93!!! The range is $85.61-$112.24 since March 1, 2012. Overnight it is higher again at $105.00 +.41 with a session high of $105.25…surprise, surprise!!!
.
Global equity markets rallying after two weak sessions: UK +0.7% vs -0.3% vs -0.4%; France +0.7% vs -0.4% vs -0.2%; Germany +0.7% vs -0.9% vs -0.7%; Japan +0.8% vs closed vs -1%; Hang Seng +1.7%!!! vs -0.3% vs -0.3%; Korea +0.5% vs -0.1% vs -0.1%; India +1.2%! vs +0.3% vs +0.3%. U.S. equity futures rallying: DOW +62 (range 53); SPX +8.20 (9); NDQ +20.75!!! (21!)

Some random thoughts:

…this just out…should make your blood boil. Senate might do something…so the House can kill it! Sick damned Congress!

Senate Report: Hedge Funds Avoided Billions of Dollars in Taxes Using Wall Street Technique

Hedge funds used a tax-avoidance technique offered by Wall Street banks to skirt federal leverage trading limits and avoid billions in U.S. taxes, Senate investigators said in a report released Monday.

The report suggests the practice was widespread in the financial industry over the last 15 or so years, with one hedge fund, Renaissance Technology Corp., potentially saving $6.8 billion in federal taxes by claiming a tax break based on the use of financial products known as basket options.

Investigators said two banks, Deutsche Bank and Barclays Bank, sold 199 basket options to more than a dozen hedge funds, which used them to conduct more than $100 billion in trades.

The Senate panel will hold a hearing on the report on Tuesday, with witnesses from the hedge fund and the two banks.

Source; WJS, July 22,2014

 

…Have a great day!

TB

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