9/19/14…guess Scotland is not like America

Quote of the Day from the Friars Club Encyclopedia of Jokes: “Well, we can’t stand around here doing nothing, people will think we’re workmen.” – Spike Miller

Bloomberg Quote of the Day: “Good advice is always certain to be ignored, but that’s no reason not to give it.” – Agatha Christie

Bloomberg Top Stories:

*Scotland Rejects Independence After Wresting Pledge of Powers From Cameron–mouse that…

*U.K. Stocks Help Europe Index to 6-½ Year High as Pound Gains After Vote – up 0.6%???

*Alibaba IPO priced at $68…want to bet its high will be today? …if, that is, history repeats!

*Fortress Paid Top Executive for Expenses to Manage Their Private Fortunes – Hubris!!!

*Siemens Said to Prepare Dresser-Rand Takeover Offer of About $6.5 Billion

*Canada Core Inflation Rate of 2.1% in August Was Fastest Since April 2012 – so what? Nada!

*ECB Set to Focus on Bank’s Capital Quality as Target for Supervisory Power

*Apple’s Big-Screen IPhones Draw Long Lines as Cooks Seeks to Boost Growth – get real!

*FHA Loans Plunge 19% as Banks Haggle With Officials Over Errors – not good for prices!

*Silver Demand Relative to Gold Surges to Record With ETF? WTF? It is weakest since 7/2010!

*Trader Turns Opera Villain as Currency Market Turmoil Creates New Careers

*French Planes Destroy Iraq Target in First Strike Following Hollande Vow – vive la France!

*Glasgow’s Young Voters Chant With Bagpipes to Mourn Lost Independence Vote – like GOP?

*The Earth Baked in Record Fashion This Summer Even If you Felt Cool Breeze – cool in MN!!!

 

Thursday’s Market Summary:

Another one of those days where everything was up from 0.5-0.7% – hence, boring and devoid of information value…only exception was Dow Utilities which fell by 0.7%…not that it matters to the second best performer ytd! NYSE Financials were up 1% – BofA slipped to 2nd most active but rose 1.6%. Volume, steady as a rail at 3.2B, aka average. A/D’s and Breadth moderately positive. New 52 week highs moved up to 205 BUT so did new lows rising to 159! VIX declined to 12.03 with a low of 11.98 and thus still slightly bearish…but what the hey…today options expire!

Total NYSE Volume up slightly to 3.2B shares from 3.14B – twice – vs 2.76B vs 3.2B. Real NYSE Volume moved up but still couln’t reach 700 or even the 12-month average: 676M shares vs 668M vs 649M vs 591M vs 694M (highest since 8/15’s 758M shares!!!) vs 605M. This marks the 24th straight sub-700M share day! 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, ranging from 517M to 927B….12 month high is 2.06B shares on 9/20/13!

A/D’s moderately positive for a 2nd day but…compare and contrast to the two negatives: NYSE: +1.6x vs +1.1x vs +1.8x vs -1.9x vs -3.8x; Nasdaq +1.5x vs +1.3x vs +1.2x vs -3.2x! vs -2.1x. Breadth was similar:: NYSE +1.2x vs +1.1x vs +2.5x vs -1.6x vs -2.6x; Nasdaq +1.7x vs +1.6x vs +1.9x vs -4.8x!!! vs -1.5x vs +1.7x. New 52 Week Highs climbed to a solid 205 vs 146 vs 84 vs 59 vs 101 vs 113 – recent range is 59-580!!! New Lows also rose to an above average 159 vs 125 vs 186 vs 185 vs 110 – recent range is 24-260! S&P VIX trade slightly below ‘12’ for the 2nd time in 14 sessions but just barely to 11.98 vs 11.73, closing at 12.03 -.62 –session high slipped to 12.58 from 14.53 a double top with Wednesday!

U.S. bond market slightly improved except TIPS: 10 yr 2.61% +1/16; 30 yr 3.35% +3/8, the long TIP 1.15%! (low was 0.87%!) -1/4. Better overnight: 2.61% +1/16; 30’s 3.34% +1/4; and long TIP 1.13% +3/8.  

Libor update: 0.234% 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 remains 0.08%-0.10%, where it has been for weeks! T-Bills range from -0.1%!, one-month, to just 0.12% one year!!! Foreign bond yields lower across the board (benchmark is the 10yrs): Germany 1.05% -3; UK 2.54% -3; France 1.41% -3; Italy 2.40% -4; Spain 2.23% -4; Portugal 3.19% -1; Greece 5.70% -1 – after losing ground from the recovery low: 5.42%; Crisis high: 12.57%. Japan: 0.55% -1. Bonds remain ‘risky business’!

 

Gold closed lower again at $1236.80 -$8.00, this a bounce from the session low of $1215.70 – lowest since 1/6/14 – this marks it’s 23rd 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 $1279, then the 200 day at $1284, then the 50 day at $1286 – 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 weaker again in an ‘inside session’ at $1224.40 -$2.50. Silver remains weak with a new low of $18.38 – lowest since July 2010!

Crude also closed weak at $ 93.07 -$1.35! It rejected Tuesday’s session high of $95.19 – highest 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 ($95.91!!!), then the 50/200 day ($97.21), and lastly the 200 day (99.75) – 40/50 falling fast. The range is $85.61-$112.24 since 3/1/12. Overnight it is weaker at $92.61 -.46.

Global equity markets higher (UK on rejection of Scottish referendum), ex-France/India: UK +0.6% vs 0.4% vs – vs -0.5% vs -0.1%; France -0.2% vs +0.6% vs +0.7% vs -0.6% vs -0.2%; Germany +0.2% vs +1% vs +0.5% vs -0.6% vs +0.1%; Japan +1.6%! vs +1.1%! vs -0.1% vs -0.2% vs closed; Hang Seng +0.6% vs -0.9% vs +1% vs -0.9% vs -1%; Korea +0.3% vs +0.2% vs +1% vs +0.4% vs -0.3%; India -0.1% vs +1.7%!!! vs +0.5% vs -1.2% vs -0.9% vs +0.2%. U.S. equity futures strong again; DOW and NDQ both gapped up large again on the open: Dow +63 (range 54 plus 28 on the gap!); SPX +5.30 (8 +2); NDQ +12.75 (17 +4).

 

Some random thoughts:

…not surprisingly, the Scots rejected the separation referendum…but the message was delivered to London – loud and clear: you need us…we don’t need you…so better start sending more money back to us…Scotch imports are big and forget the woolens…they are a big industrial part of the UK! PM Cameron blinked…more than once and pledged more powers to the Scots! The vote? 55.3% against secession…too close for comfort to the usually ‘unflappable’ Brits.

Repeating…enjoy your weekend! Don’t let options expiration get you down!

TB

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