8/11/14…who said, and did, what?

Quote of the Day from the Friars Club Encyclopedia of Jokes: “A man can’t be too careful in his choice of enemies.” – Oscar Wilde…and ‘wild’ he was!

Bloomberg Quote of the Day: “Imagination is the highest kite one can fly.” – Lauren Bacall

This week’s economic calendar is fairly light. The highlight of the week will be the July Retail Sales (Tuesday) and July PPI (Friday). We will also get June Job Openings and June Treasury Budget (Tuesday), June Business Inventories (Wednesday), July Import/Export Prices (Thursday), August Empire State Manufacturing, July Industrial Production and August Consumer Sentiment Preliminary (Friday). Courtesy of Economic Financial Service

Bloomberg Top Stories:

*Stocks in U.S. Open Higher Over Easing of Crisis in Ukraine? Huh??? What about IRAQ?!?

*Kinder Morgan Gains Acquisition Currency With $44 Billion Pipeline Consolidation

*Five Years of Futility Breaking for Bears as Most-Shorted Stocks Drop 8% – uptick rule???

*Nobel Biocare Said to Draw EQT, Danaher Interest for Plan to Be Acquired

*Job Market Tilts Towards Workers With U.S. Economy Entering Virtuous Cycle – Virtuous???

*Norwegian Oil Fund Buys $576 Million Stake in Estate of London’s Mayfair

*Lowes Strikes Deal to Sell HighMount at Loss as Gas Glory Eludes CEO Tisch

*Chiquita Brands Receives $13-a-Share Cash Offer From Cutal Group, Safra

*Hedge Funds Push Up Prices on U.S. Bad Loans With Sales Soarings – Mortgages

*Hedge Funds Snub U.S. Natural-Gas Rally as Supply Increases Loom – history of NG

*Colgate Total’s Unseen FDA Pages Spur Concern Over Triclosan in Toothpaste

*How Savvy Bond Traders Made Millons Off Americans Earning $24.45 an Hour

*Kerry Pulls U.S. Support for Maliki as Islamic Militants Seize More Towns – ???

*Erdogan Wins Presidential Election in Turkey, Extending Rule Through 2019

*Israel Finds Silent Backing Among Arab Countries Hostile to Gaza’s Hamas

*Ebola Opens WHO Debate on Patient Treatment With New Drugs in Short Supply

 

Friday’s Market Summary:

Bonds not only rallied but for a second straight session to new 12-month highs – stockstoo rallied but on pathetic volume so you can discount that…especially with Friday being options expiration!

Why question the rally? Because while all indices were up from 0.8%(both Nasdaqs) to 1.3% (Dow Transports), those gains were eclipsed by…Dow Utilities +2.2% and best performer for a second straight session…unlike stocks, it regained its losses of the past week!

Total NSYE Volume dove to a well below average 2.87B shares from 3.22B shares vs 3.5B (average) while real trades on the NYSE floor slumped again to 629M shares vs 670M. Advance/Declines on the NYSE were positive but offset by the low volume. Breadth was similar. New 52 week highs rose but remain very weak at 86 vs 67 vs 54 while new lows slipped to 145 vs 167…what’s that old adage? Never short a THIN market? The VIX continues to oscillate closing lower at 16.66 +.29 while the range remains bearish at 15.53-17.09!

Total NYSE Volume dipped to a well below average 2.87B shares vs 3.22B vs 3.5B vs 3.44B vs 3.05B. Real NYSE Volume plunged to a very weak 629M shares vs 670M vs 689M vs 703M vs 676M – 14 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 704M 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 finally positive: NYSE +3.1x vs -1.1x vs +1.5x vs -2.5x vs +1.6x vs -1.7x vs -6.3x!!! Nasdaq +2.3x vs -1.8x vs +1.5x vs -1.4x vs +1.7x vs -1.8x vs -5.1x! Breadth was more so: NYSE +4.2x! vs -2.3x vs -1.05x vs -3.6x vs +2.3x vs 1.7x vs -8.4x!!!; Nasdaq +2.3x vs -1.7x vs -1.1x vs -1.8x vs +2.1x vs -1.9x vs -5.6x! New 52 Week Highs rose slightly but remain weak for a 7th session at 86 vs 67 vs 49 vs 54 v 57 vs 46 vs 56 vs 149 – recent range is 46-580!!! New Lows slipped to 145 vs 167 vs 146 vs 166 vs 179 vs 260!!! vs 234 vs 115 – recent range is 24-260! S&P VIX closed lower but remains in bear territory at 15.77 -.89, range: almost parallel of three days at 15.53-17.09.

Bonds closed lower but remain near new 12-month highs set Thursday! 10 yr closed at 2.42% -3/32; 30 yr 3.23% -3/32; the long TIP 0.90% -1/2. Overnight they are little changed and mixed: 10’s 2.42% -1/32; 30’s 3.23% -1/16; and long TIP 0.90% +1/16. 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: 0.235% 3 mos.; 0.329% 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 mixed; Greece sharply lower? Germany 1.05% –; UK 2.49% +3; France 1.46% +1; Italy 2.79% -3; Spain 2.54% -2; Portugal 3.76% -6; Greece 6.23% -12!?! The recent high on selloff was 6.75%. Recently 5.42% to 12.57%. Japan: 0.51% +1.

Gold closed little changed at $1311.00 +.20, but only after setting a new high of $1324.30 – highest since 7/18! Monday’s low was $1279.70, lowest since 6/19. 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 $1307, the 50 day at $1296, and the 200 day at $1287. 50/200 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 is trading quietly at $1308.70 -$2.30.

Crude closed slightly higher in a typical of late, ‘nothing session’. This a day after trading down to $96.55 – lowest since 2/4! – 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 $99.79 – 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 ($99.79), then the 40 day ($102.84), and then the 50 day ($102.98) – the latter two declining rapidly!!! The range is $85.61-$112.24 since March 1, 2012. Overnight it is little changed at $97.62 -.03 in an inside session.

Global equity markets strong??? UK +0.9% vs -0.3% vs – vs -1.3% vs +0.4%; France +1% vs +0.2% vs -0.2% vs -1.3% vs +0.5%; Germany +1.7%! vs +0.1% vs +0.3% vs -1.4%-1.2%! Japan +2.4%!!! vs -3%!!! vs +0.5% vs -1.1% vs -1%; Hang Seng +1.3%! vs -0.2% vs -0.8% vs -0.3% vs +0.2%; Korea +0.4% vs -1.1%! vs -0.3% vs -0.3% vs -0.7%; India +0.8% vs -1%! vs -0.3% vs -0.9% vs +0.7% vs +1% vs -1.6%!!! U.S. equity futures gapped up on the open and are just off session highs and STRONG: Dow +74 (range 68); SPX +9.60 (12); NDQ +22 (17).

 

Some random thoughts

…everyone has an answer to Iraq and the rest of the Middle East, but none of them agree. Dems and most of the ‘eggspurts’ think Obama is doing the right thing, while Rep. King (R-NY) not only says he is doing it wrong but caused the problem…this is unbelievable hubris! Who got us in this mess? Dubya…ok, along with Rummy and Cheney (Tricky Dick II). Who said he would not take out Saddam without knowing who the successor would be? Bush 41 (who waited), and Bush 43 (who reneged!).Who announced a withdrawal in 2011 to insure his ‘victory’? Dubya. Who endorsed Maliki? Dubya and Obama. Who armed the Iraqi army and then didn’t fully train them before giving them the equipment? Dubya and Obama. Who sent the Red Guard home – with their weapons while banning anyone from government that was a Baathist? Paul Bremer…BUT not overturned by Dubya despite having said, ‘the Iraqi’s know who the bad guys are? Lastly, who said, “we are only going into Afghanistan to get Bin Laden” – he left the country, we didn’t.

…just a few of TB’s least favorite things…is this a great country or what?

TB

 

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