Quote of the Day from the Friars Club Encyclopedia of Jokes: “A conference is a gathering of important people who singly can do nothing but together can decide that nothing can be done.” – the late, great satirist Fred Allen
Bloomberg Quote of the Day: “To find fulfillment…don’t exist with life – embrace it.” – Jim Beggs
Bloomberg Top Stories:
*Consumer Prices in U.S. Unexpectedly Fall for First Time in More Than Year
*Stocks in U.S. Advance With Treasuries on Data Before Fed’s Rate Decision
*Billionaire Evtushenkov Place Under house Arrest Over Russian Oil assets – nothing new here
*Homebuilder Confidence in U.S. Hits Nine-Year High as Recovery Strengthens
*Crashing Bund Yield Forecasts Signal QE to Come After Loans; Euro Credit
*Backlash Brews as Insurers, Banks Join REITS in Opposing FHLB Rule Change
*Dark Pools Confront More Transparent Future as Threats to Platforms Mounty – finally!!!
*Top U.S. General Dempsey Opens Door to Embed Troops in Islamic State Fight
*Scottish Campaign Sees Emotional Appeals as Brown Evokes Macbeth for Votes
*Mosul Schools go Back in Time as Islamic State Imposes New Curriculum
*Canary Wharf Feasts on Haggis as Traders Gird for Scots Referendum Results
Tuesday’s Market Summary:
Before we discuss yesterday’s market, TB wants to call your attention to an article…not because the author is also sounding warnings…but because of some interesting data in it: Ed d’Agostino, Rational Bear. Read it and YOU decide…note also that China pumped $81 billion into its six largest banks – why? Slowing economy. Wait…when the rest of the world was having its problems and mired in recession, what did the bulls say? ‘At least, China can keep the economy going. Old story, right? Every mention of a Chinese slowdown has been rebuffed by economic data…’their’ economic data which cannot be verified! Think about it!
As for yesterday, futures market was weak…our markets opened weak…then bounced as once again all indices were up…suspiciously even by 0.6+0.9% – except…Dow Utilities which were equal to the combined Dow 30 and Dow Transports: +1.2%! That, folks, is telling you something…oh, as is the Russell 2000 up just 0.4% – check out the above link! One last negative: Volume ROSE to 3.14B shares…only the 2nd time since 8/7 >3B shares…wait, but market rose…hint: market usually runs counter Tuesday before options expiry…short covering or balancing positions…only amateurs wait until Thursday of Friday. Of course this week is more problematic as the FOMC meeting ends today…hmmm, what will they say? A/D’s and Breadth were only slightly positive…especially in contrast to the magnitude of the negatives of the last two days! VIX declined to 12.73 -1.39 – confirming the earlier statement still more bear than neutral. Once again: “Do you feel lucky, punk?…well, do ya?” Thanks, Dirty Harry!…er Clint!
Total NYSE Volume returned to 3.14B shares from a below average of 2.76B from 3.2B (highest since 8/7!) vs 2.93B vs 2.86B. Real NYSE Volume also rose but remains well below average 649M shares at 591M vs 694M (highest since 8/15’s 758M shares) vs 605M vs 608M The average for the week ended 8/29 was 522M shares – a new 2014 low – average volume at the closing bell was also a new low for the year of 387M shares! Note that the average for the final week of 2013 was 424M! There have been just four sessions above 800M since 4/28! The 12-month average is a historically weak 697M shares. Since 4/30 the average volume has been just 649M shares, and slipping ranging from 517M to 927B….12 month high is 2.06B shares on 9/20/13!
A/D’s back to positive but following two straight negatives: NYSE: +1.8x vs -1.9x vs -3.8x vs +1.3x vs +1.1x vs -3.3x; Nasdaq +1.2x vs -3.2x! vs -2.1x vs +1.4x vs +1.6x vs -3.2x. Breadth was similar:: NYSE +2.5x vs -1.6x vs -2.6x vs +1.9x vs +1.2x vs -3.4x; Nasdaq +1.9x vs -4.8x!!! vs -1.5x vs +1.7x vs +2x vs -3.9x. New 52 Week Highs modestly recovered to a still weak 84 vs a weak 59 vs 101 vs 113 vs 107 – recent range is 59-580!!! New Lows remained strong at 186 vs 185 vs 110 vs 104 vs 128 vs 109 – recent range is 24-260! S&P VIX dove sharply but remains slightly bearish at 12.73 -1.39 with a range of 12.72-14.53! – first ‘12’ print and straight close in 12 sessions!
U.S. bond market weaker in the long end: 10 yr 2.59% -1/32; 30 yr 3.36% -5/16, the long TIP 1.11%! (low was 0.87%!) -5/8. Higher overnight: 2.58% +1/4; 30’s 3.34% +5/16; and long TIP 1.10% +1/64.
Libor update: 0.234% 3 mos.; 0.331% 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 remains 0.08%-0.10%, where it has been for weeks! T-Bills range from ZERO, one-month, to just 0.12% one year!!! Foreign bond yields slightly lower across the board (benchmark is the 10yrs): Germany 1.05% -1; UK 2.53% –; France 1.41% -2; Italy 2.41% -5; Spain 2.26% -8; Portugal 3.16% -3; Greece 5.67% -2 – after losing ground from the recovery low: 5.42%; Crisis high: 12.57%. Japan: 0.55% -2. Bonds remain ‘risky business’!
Gold closed slightly higher for a 2nd day at $1236.70 +$1.60; this, following a dive to another new low of $1225.30 – lowest since 1/9/14 – this marks it’s 21st straight sub-$1300 close. It is way below the 40/50 and 200 day m/a’s. 7/17’s session high was $1346.60, highest since March 19th!!! 6/9’s $1240.20 was lowest since 1/31/14!!! RES is the 40 day at $1283, then the 200 day at $1285, then the 50 day at $1290 – tight and falling! Recent high was $1392.60 on 3/17, highest high since 9/4/13. Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Overnight it is slightly higher at $1237.10 +.40 in a $7 range.
Crude closed sharply higher but remains weak at $94.88 +$1.96 with a session high of $95.19 – both highest close since 9/2. Last Thursday’s low of $90.43 was lowest since 6/28/13! There have been SEVENTEEN handles since peaking at $107.73 on June 20th. 6/20’s run to $107.73 was highest since 9/19/13 (a huge down session which put it in freefall. The record high of $147.27 was on 9/30/08, the low since on 12/30/11 is $74.95: $93.60 is the midpoint!!! Recent rally high and close are $110.70 and $110.53 respectively. RES at the 40 day ($96.41!!!), then the 50/200 day ($97.58/99.74) – 40/50 falling fast, and now 200 day falling! The range is $85.61-$112.24 since 3/1/12. Overnight it is little changed in an ‘inside session’ at $94.98 +.11, near the high of $95.06.
Global equity markets higher except Japan: UK – vs -0.5% vs -0.1% vs +0.3% vs -0.7%; France +0.7% vs -0.6% vs -0.2% vs – vs -0.8%; Germany +0.5% vs -0.6% vs +0.1% vs –0.2% vs -0.6% vs –0.3%; Japan -0.1% vs -0.2% vs closed vs +0.3% vs +0.8%; Hang Seng +1% vs -0.9% vs -1%! vs -0.3% vs -0.2% vs -1.9%; Korea +1% vs +0.4% vs -0.3% vs +0.4% vs -0.7%; India +0.5% vs -1.2%! vs -0.9% vs +0.2% vs –0.2%. U.S. equity futures modestly higher overnight. U.S. market opening higher: Dow -25; SPX +3.72; NDQ +2.80.
Some random thoughts:
…continuing to watch The Roosevelts – Part III, an amazing family. Love ‘em or hate ‘em, they had altruistic goals…we are reverting unfortunately…and due to the same party (Note Teddy was a Republican who quit the party in disgust and ran under the Progressive Movement – more recognized as the ‘Bull Moose’ party…he was soundly defeated by Taft running for his 2nd term.
Enough of this…TB had a mind-blowing experience yesterday: went for a stunt flight on a ‘perfect day’ with his friend, world-acclaimed Mike Wiskus! What a thrill…we did barrel rolls, several hammerhead stalls,and a 360! For added excitement, a flat tire on landing – and no, TB did not ‘lose his lunch’…for those in the Bay Area, he will be in San Francisco for Fleet Week along with the Blue Angels…thrilling! Definitely, an ‘E’ ticket ride – for those of you old enough to remember that!
Hope your day is as great as TB’s was yesterday!