8/7/14…questions…we have questions…

Quote of the Day from the Friars Club Encyclopedia of Jokes: “Baseball’s very big with my people. It figures. It’s the only time we can shake a bat at a white man without starting a riot”.
– Dick Gregory

Bloomberg Quote of the Day: “The best time to make friends is before you need them.”
– Ethel Barrymore

Bloomberg Top Stories:
*First-Time Jobless Claims in U.S. Fall as Average Drops to Eight-Year Low –what about wages?
*Draghi Says Geopolitical Risks are Increasing as ECB Stands Ready to Act
*Russia Bans Most Food Imports From EU, U.S., Canada in Retaliatory Act – aww, no caviar!
*S&P 500 Futures Climb With Bonds on ECB; Aussie Leads Currencies Higher -2.5% since 7/30!
*Argentina’s Wall Street Fixers Joined by Deutsche Bank for Holdout Talks – isn’t this reminiscent of the ‘good old days’ of the Citi bailouts which caused Citi to then be bailed out???
*African Bank’s Survival in Doubt as Billions Erased Following Record Loss
*Russia Proves Investor Favorite With Banks to Energy Unless Sanctions Work – sick!
*Bank of America Said to Near Mortgage Deal With U.S. for Up to $17 Billion – yet stock rallied?
*Can’t Discuss Inequality as We Don’t Know How Rich You Are – they have so many ways to…
*Militants Seize Control of Iraq’s Largest Dam as Thousands Flee Mosul Area – thanks, Dubya!
*Obama Calls for Extension of Gaza Cease-Fire Accord as Cairo Talks Resume
*U.S. Lowers the Odds of el Nino Forming in the Pacific by the End of This Year
*American Citizens Give Up U.S. Passports as Asset-Disclosure Rules Start
*California Farmers With Century-Old Water Rights Profit in Record Drought – in the old Wild West didn’t turf wars develop over this…but in the Cadillac Desert???

Wednesday’s Market Summary:

Bonds took off big time in yesterday’s overnight session, then gave back most of the gains mid-morning, but still managed to close somewhat higher…they are back at their 12-month highs overnight while overnight global equity markets are mostly weaker although U.S. stock futures are slightly positive…could be an interesting session.
Stocks however had a mixed session (at best) yesterday with the only gainers being the Russell 2000 +0.4% and the Dow/Nasdaq Composite +0.1%…S&P and NDQ 100 were both FLAT, while Dow Transports declined by 0.6% and Dow Utilities were the goat -1.1% -2.3% in just two sessions but still 7.2% ytd, number two to Transports which are up 8.2% now ytd. NYSE Financials rose 0.3%…note that BofA was up 1.2% – thanks to a generous Fed which accepted their risk plan (sic), allowing them to increase their dividend to 5 cents from 1 cent…gee from 0.26% to a whopping 1.32% – what is it TB said about buying bank stocks? Oh yeah, only for the dividend which should be 4-5%…none are these days however, are they? TB likes Banco Santander – on weakness…it’s divvie? 8.4%! Now that is reward for risk/volatility. Don’t rush, next is on 10/15! Three analysts cover it: all have it as a ‘hold’.
Total NSYE Volume was steady at an average 3.5B shares while real trades on the NYSE floor declined to 689M or about 15M below average. Advance/Declines on the NYSE have now been negative 6 of 8 sessions, whiile the Nasdaq has had three but all five positives ones were puny and mostly so flat as to render them meaningless. Breadth, however, was slightly negative yesterday and again the positives have been miniscule while some of the negatives have been very weak. New 52 week highs steady at a very weak 54 while new lows slipped again but remain at a still high 146 vs 166 vs 178. The VIX which reversed yet again, declining to 16.30 -.57 but the range was higher at 15.70-17.30!!! Observe!

Total NYSE Volume was steady at an average 3.5B shares vs 3.44B vs 3.05B vs 3.79B vs 4.25B. Real NYSE Volume slumped to a below average 689M shares – 115M at the bell!!! vs 703M (ave) vs 676M vs 792M vs 927M vs 680M – 12 days ago it hit 541M, the third lowest of 2014 (531M was the low) – that with 236M at the bell!!! 537M on 7/3 was second weakest since April 30th. There have been just four sessions above 800M since 4/28! The 12-month average remains at a very weak 703M shares. Since 4/30 the average volume has been just 673M shares ranging from 531M to 927B….12 month high is 2.06B shares on 9/20/13!

A/D’s were slightly positive: NYSE +1.5x vs -2.5x vs +1.6x vs -1.7x vs -6.3x!!! vs -1.6x vs -1.5x vs -1.3x – prior to that were puny positives! Nasdaq +1.5x vs -1.4x vs +1.7x vs -1.8x vs -5.1x! Breadth was slightly negative: NYSE -1.05x vs -3.6x vs +2.3x vs -1.7x vs -8.4x!!!; Nasdaq -1.1x vs -1.8x vs +2.1x vs -1.9x vs -5.6x! New 52 Week Highs were steady for a fifth session at a very weak 49 vs 54 v 57 vs 46 vs 56 vs 149 – recent range is 46-580!!! New Lows declined for a fourth session but still high at 146 vs 166 vs 179 vs 260!!! vs 234 vs 115 – recent range is 24-260! S&P VIX closed lower at 16.30 -.57, yet another reversal but with a higher range of 15.70-17.30!!!

Bonds, after being strong in the overnight session slumped in late morning but still closed slightly higher and remain near their 12-month highs: 10 yr closed at 2.47% +1/8; 30 yr 3.27% +17/32 the long TIP 0.93% +1/4. Overnight they are higher but fading: 10’s 2.46% +1/16; 30’s 3.27% +3/32; and long TIP 0.90% +3/16. 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: 0.237% 3 mos.; 0.330% 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 at 0.08-0.10% where they have been for weeks! Foreign bond yields modestly lower across the board: Germany 1.09% -1; UK 2.51% –; France 1.50% -2; Italy 2.77% -4; Spain 2.54% –; Portugal 3.78% –; Greece 6.36% +7. The recent high on selloff was 6.75%. Recently 5.42% to 12.57%. Japan: 0.52% –.

Gold finally took off hitting $1309, highest since 7/29 and closing just below at $1308.20 +$22.90!!! Monday’s low was $1279.70, lowest since 6/19. This breaks the string of six straight closes below the psychological $1300, which began with a negative key reversal (higher high, lower low and close below prior days low!). It is now above all three moving averages and the psychological support level of $1300! 7/17’s session high was $1346.60, highest since March 19th!!! 6/9’s $1240.20 was lowest since 1/31/14!!! Support is now the 40 day $1305, the 50 day at $1294, and the 200 day at $1287! Those are again critical support levels! Note the recent high of $1392.60 on 3/17, highest high since 9/4/13…that too ended the session with a negative key reversal sparking the downturn! Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Overnight it eked out a new high of $1309.90 and is now $1307.90 -.30.

Crude closed lower again and with another handle. It traded down to $96.69 before working its way back to a weak $96.69, lowest since 2/4!!! – now NINE handles since 6/30! 7/22’s high was $105.20, still highest since 7/2. 7/15’s session low was $90.01 – lowest since 3/21. 6/20’s run to $107.73 was highest since 9/19/13 (a huge down session which put it in freefall well below what was critical support at $99.82 – 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 200 day ($99.80), then the 50 day ($103.20), and then the 40 day ($103.24)!!! The range is $85.61-$112.24 since March 1, 2012. Overnight it is slightly higher at $97.17 +.26 and with yet another new low of $96.55! – not only weak but some are now calling for sub-$3 gas!!!
Global equity markets mixed but weak: UK – vs -1.3% vs +0.4% vs +0.5% vs -0.8%; France -0.2% vs -1.3% vs +0.5% vs +0.8% vs -0.5% vs -1.1%! Germany +0.3% vs -1.4% vs +0.4% vs – vs -1.5%!!! vs -1.2%! Japan +0.5% vs -1.1% vs -1% vs -0.3% vs -0.6%; Hang Seng -0.8% vs -0.3% vs +0.2% vs +0.3% vs -0.9% vs +0.1%; Korea -0.3% vs -0.3% vs -0.7% vs +0.4% vs -0.2% vs -0.3% vs +1%; India -0.3% vs -0.9% vs +0.7% vs +1% vs -1.6%!!! U.S. equity futures higher and gaining a little steamr: Dow +58 (range 72); SPX +9.30! (11); NDQ +15.50 (22).

Some random thoughts

…a plethora of items to consider…with no clear answer…just think about them:

*Putin in control as he now is threatening not shipping food items to the EU, Canada, and America…damn, just as we developed a taste for caviar! Seriously, though it is the Ukraine that is the breadbasket (think wheat) of Europe…but wait, do they have to go through Russia as an independent country? Hmmmm.

*American citizens abroad are giving up their passports due to new asset disclosure rules. Let them! …but IF they decide they want back in have them get in line…right behind the last Mexican applicant!

*The wealth gap isn’t easy to determine thanks to our beautiful tax code that the GOP, through it contract with the devil (Grover Norquist), refuses to amend for any tax increases, which in the gospel according to Norquist includes removing any subsidy – no matter how ill-devised. Yet the GOP continues to say “just trust us and elect us to get it done” – wait didn’t we do that when Dubya was elected and we had the biggest tax and spend – oops, cut taxes and spend more, including financing not one but TWO wars? Meanwhile, like Nero (his idol?), Bush didn’t veto a single spending bill until 2006 when we were well into – not on our way to – massive budget deficits. He only vetoed a total of 26 bills in his entire eight years in office. Contrast to Reagan (68?), and Bush 41 (40+?). This is hubris and disinformation that the GOP has preached since Obama was elected.  Thanks to the current tax code…which is billed as ‘progressive’ yet is enormously regressive…we have no way of knowing the true wealth…even incomes since they come from non-working income…mostly in the form of advantaged capital gains or ‘carried interest’ and then can be hidden in trusts…including generation-skipping…God bless America!

Those should be enough for you to contemplate or think badly of TB – that commie pinko Dem loving fool (he is neither a socialist OR a Dem lover, just the lesser of two evils), fool is yet to be determined…

Have a great day!!!



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