5/29/14…July is almost over…and showing it

Quote of the Day from the Friars Club Encyclopedia of Jokes: “

Bloomberg Quote of the Day: “One’s destination is never a place but rather a new way of looking at things.” – Henry Miller…and most of his places were four-letter words!

This 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:
*U.S. Equity Index Futures Advance as Ruble Declines While Bonsd Strengthen
*UPS Lowers 2014 Profit Outlook on Costs to Smooth Holiday Shipping Period
*Banco Espirito Santo Bonds Drop With Stock After Report on Estimated Loss
*UBS, Deutsche Bank’s Quarterly Earnings Overshadowed by Litigation Costs
*Home Prices in 20 U.S. Cities Are Rising at Slower Pace, Case Schiller Says
*German Bunds Rising to Records Show All is Not right in Euro-Araa Ecnoomy
*General Motors Falters as Car Recalls Erode Market Shares
*China Probe of Ex-Security Chief Zhou Is Highest Profile Case in 60 Years
*Israel Steps Up Attacks on Gaza as Netanyahu Warns of Prolonged Campaign
*New Russia Sanctions Readied by U.S. EU Battles Rage in Ukraine’s East
*Veteran’s Health Bill Set for Pre-Break Passage as U.S. Border Funds Stall

Monday’s Market Summary:

A dull session with only three indices up or down: Dow Transports DOWN 1.1%! – biggest loser; Dow Utilities UP 1.3%!!!; Russell 2000 -0.5%. The rest were between+/- 0.1%!?! Volume remained weak, A/D’s were negative for a second session; new 52 week highs steady at 152 but new lows nearly tripled to 141. The VIX rose sharply hitting 13.64 (bearish) thru mid-session then fell to 12.54 before closing at 12.56 -.13…hmmm.

Total NYSE Volume rose slightly but remains weak at 2.77B shares vs 2.63B vs 3.09B vs 2.05B vs 2.87B vs 2.58B vs 3.1B shares. Recent high volume was 4.25B (end of quarter). Real NYSE Volume rose slightly to 589M shares vs 570M vs 631M vs 581m vs 589M five 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 667M shares ranging from 531M to 1.72B.

A/D’s were negative for a second session! NYSE -1.3x vs -1.9x vs -1.1x vs +1.4x vs +2.2x; Nasdaq -1.7x vs -2.1x vs -1.2x vs 1:1 vs +. Breadth was similar: NYSE -1.4x vs -2x vs +1.2x vs +1.07x vs +2.3x; Nasdaq -1.5x vs -1.7x vs +1.2x vs +1.2x vs +1.7x. New 52 Week Highs were steady at 152 vs 150 vs 280 vs 284 vs 276 vs – recent range is 71-580!!! New Lows nearly tripled to 141 vs 55 vs 70 vs 49 vs 76 – recent range is 24-214. S&P VIX climbed to 13.64 before closing at 12.56 -.13? with a range of 12.54-13.64. Follow closely.

Bonds closed slightly weaker but after setting new 12-month highs on Friday: 10 yr closed at 2.49% -3/16. 30 yr closed 3.25% -1/8. The long TIP closed at 0.89% +1/4. Overnight they are doing better: 10’s 2.46% +1/4; 30’s 3.22% +5/8; and long TIP 0.86% +7/8 – a new low! 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, Germany 1.11% -3; UK 2.54% -4; France 1.51% -3; Italy 2.64% -4; Spain 2.46% -3; Portugal 3.57 +1; Greece 5.75% +1 The recent high on selloff was 6.75%. Highly volatile!!! Recently 5.42% to 12.57%. Japan: 0.51% -1.
Gold closed slightly higher for a second day at $1305.80 +.50 with a two day range of $1289.40-$1311.40 Psychological support at $1300. 7/17’s session high was $1346.60, highest since March 19th!!! Just 3 closes below $1300 in 25 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 $1297, the 50 day $1294 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!!! Overnight it is slightly higher at $1309.80 +4.00 in an inside trading session.

Crude closed weaker at $101.67-.42 with a session low of $100.90 – 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 $104.03, and the 200 day $99.91!!! The range is $85.61-$112.24 since March 1, 2012. Overnight it is weaker again at $100.78-.89 with a low of $100.67!
.
Global equity markets higher: UK +0.6% vs -0.2% vs -0.2% vs +0.1% vs +0.7%; France +0.9% vs – vs -0.8% vs +0.8% vs +0.7; Germany +0.8% vs -0.8% vs -0.5% vs +0.6% vs +0.7%; Japan +0.6% vs +0.5% vs +1.1% vs -0.3% vs +0.8%; Hang Seng +0.9% vs +0.9% vs +0.3% vs +0.7% vs +1.7%! Korea +0.6% vs 0.7% vs +0.4% vs -0.1% vs +0.5%; India closed vs -0.5% vs -0.6% vs +05% vs +1.2%! U.S. equity futures : Dow +40; SPX +3.10; NDQ +6.50.

Some random thoughts (repeating yesterday’s late commentary):

…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 fantastic day!

TB

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