Quote of the Day from the Friars Club Encyclopedia of Jokes: “I think I agree with the old lady who said if God had intended us to fly, he would never have given us railroads.”
– Michael Flanders
Bloomberg Quote of the Day: “I feel very strongly that change is Good because it stirs up the system.” – Ann Richards…that it does Ann, that it does…in the hands of good people!
Next week’s economic calendar is packed with important indicators. The highlight of the week will be the Q2 GDP Advance (Wednesday), July ISM Manufacturing Survey and July Employment Situation report (Friday). We will also get July Dallas Fed Manufacturing (Monday), May Case-Shiller Home Prices and July Consumer Confidence (Tuesday), July ADP Employment (Wednesday), Q2 Employment Cost and July Chicago PMI (Thursday), June Construction Spending, July Motor Vehicle Sales and July Consumer Sentiment Final (Friday). In addition, the Federal Reserve FOMC will be meeting on July 29th – July 30th with an announcement on the 30th. Courtesy of Economic Advisory Service.
Bloomberg Top Stories:
*Dollar Stores Agrees to $8.5 Billion Merger After Prodding From Carl Icahn
*Zillow Agrees to Acquire Rival Trulia for $3.5 Billion in All-Stock Deal
*Stocks in U.S. Decline With Oil on Housing Data as Russian Shares Retreat
*Barclays Dark Pool Trading Rises After N.Y. suit Spurs Two Week Decline
*Lloyds Attacked by Carney as Bank Is Fined $383 Million for Libor Rigging
*Israel Unexpectedly Cuts Benchmark Interest Rate to 0.5% on Gaza Conflict
*CurrencyTraders Bemoaning Losses Detect Reprieve as Volatility Revived
*BpfA Appoints Coben, Deignan as Co-Heads of Global Equity Capital Markets
Friday’s Market Summary:
A downer! All indices off from 0.5% to 0.7% except the Russell 2000 which plunged 1.1%!!! – isn’t that supposed to be a proxy for the overall economy? Even Dow Utilities were off 0.7%! This despite better than expected Durable Goods Orders that were touted as improving growth…is growth a bad thing?…will that be the new normal? Only saving grace was volume plunged again thus negating the drop. VIX back above ‘12’ again, and A/D’s and Breadth were negative. New 52 week highs were more than halved while new lows topped 100.
Total NYSE Volume plunged to a very weak2.63B shares from 3.09B shares vs 2.05B shares vs 2.87B vs 2.58B vs 3.1B shares. Recent high volume was 4.25B (end of quarter). Real NYSE Volume also plunged to 570M from a weak 631M shares vs 581m vs 589M four days after plunging to 541M, the third lowest of 2014 (531M was the low) – with 236M at the bell!!! 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 703M. Since 4/30 the average volume has been just 168M shares ranging from 531M to 1.72B.
A/D’s were negative: NYSE-1.9x vs -1.1x vs +1.4x vs +2.2x vs -1.7x vs +4.5x vs -4.3x; Nasdaq -2.1x vs -1.2x vs 1:1 vs +2x vs -1.6x vs +3.7x vs -2.5x. Breadth was similar: NYSE -2x vs +1.2x vs +1.07x vs +2.3x vs -1.6x vs +3.6x vs -5.3x!!! Nasdaq -1.7x vs +1.2x vs +1.2x vs +1.7x vs +2.3x vs +1.07x vs +6.2x!!! vs -3.7x! New 52 Week Highs plunged to 150 vs 280 vs 284 vs 276 vs 376 vs 150 – recent range is 71-580!!! New Lows doubled to 55 vs 70 vs 49 vs 76 vs 77 vs 132 – recent range is 24-214. S&P VIX climbed back above ‘12’ again closing at 12.63 +0.80 with a narrow range of 12.03-12.75. Follow closely.
Other markets 3:45pm EDT – ok so I was late…what are you going to do? Shoot me?:
Bonds closed strong following two weak sessions with both the 30-yr and long TIP both at new 12 month highs: 10 yr closed at 2.47% -+5/16. 30 yr closed 3.24% +1-1/8. The long TIP closed at 0..87% +1-5/8, a new 12-month low of 0.90%. Overnight they are slightly better: 10’s 2.47% -1/16; 30’s 3.23% +1/16; and long TIP 0.87% +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.; 0.328% 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 is 0.08-0.10% where it has been for weeks! Foreign bond yields lower, Greece plunging for a 2nd day – back below 6%! Germany 1.16% -1; UK 2.60% -1; France 1.56% -1; Italy 2.70% -3; Spain 2.52% -3; Portugal 3.62% -5; Greece 5.87% -19!!! The recent high on selloff was 6.75%. Highly volatile!!! Recently 5.42% to 12.57%. Japan: 0.53% +1.
Gold rallied back a day after breaking $1300 and trading down to $1289.40, closing at $1305.30 +$12.60! Psychological support back at $1300. 7/17’s session high was $1346.60, highest since March 19th!!! Just 3 closes below $1300 in 24 sessions since plunging on 4/14! 6/9’s $1240.20 was lowest since 1/31/14!!! It is back above all three moving averages which remain near locked and remain CRITICAL…40 day $1296, the 50 day $1293 with final support still at the 200 day $1287!!! 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!!! This afternoon it is slightly higher at $1307.60 +$2.30 with a session high of $1311.40.
Crude also closed about even at $102.09 +0.02, but with a session low of $101.00 – lowest since 7/16! Last Tuesday’s high was $105.20, still highest since 7/2. 7/15’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 – put it in freefall with critical support at $99.91 – 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. RES at the 50 day ($103.87), then the 40 day $104.05, and the 200 day $99.91!!! The range is $85.61-$112.24 since March 1, 2012. This afternoon it is weaker again at $101.65 -.44, Low $100.90.
European equity markets weak Asia higher, ex-India- for a 2nd day: UK -0.2% vs -0.2% vs +0.1% vs +0.7%; France – vs -0.8% vs +0.8% vs +0.7% vs -0.4; Germany -0.8% vs -0.5% vs +0.6% vs +0.7% vs -0.9% vs -0.7%; Japan +0.5% vs +1.1% vs -0.3% vs +0.8% vs closed; Hang Seng +0.9% vs +0.3% vs +0.7% vs +1.7%!!! vs -0.3%; Korea +0.7% vs +0.4% vs -0.1% vs +0.5% vs -0.1%; India -0.5% vs -0.6% vs +05% vs +1.2%! vs +0.3%. U.S. equity markets at 3:55pm EDT: Dow +16; Transports -97???; Utilities +6.67; S&P 500 +0.95; Nasdaq Composite -4.50; NDQ 100 +2.55; Russell 2000 -4.42.
Some random thoughts:
…Bill Moyers had a guy on his program from the American Enterprise Institute, a conservative think-tank! Billed himself as a ‘compassionate conservative, but then went on to prove he is no different from the GOP right! Minimum Wage…would be a bad idea as it would hurt more workers; WalMart? We have no right to tell them what to pay workers – even when many of them are on welfare? CEO Compensation? No way…free markets will get it right; lastly, we should trust conservatives to do the right thing. What a waste of time to listen to this guy! A total jerk. Compassionate conservative…TB’s $&%!
Have a great week!