Quote of the Day from the Friars Club Encyclopedia of Jokes: “The NRA is attempting to lift the ban on machine gun sales. Well, as an avid hunting enthusiast, I’ve been hoping to buy a fully-automatic Uzi. One thing about a machine gun, it really takes the guesswork out of duck hunting. – Mark Russell, political satirist
Bloomberg Quote of the Day: “With the new day comes new strength and new thoughts.”
– Eleanor Roosevelt
Bloomberg Top Stories:
*Bill Gross Will Join Janus Capital Sept. 29 to Manage Its Global Bond Fund – ask El-Erian
*Economy in U.S. Expanded at 4.6% Pace in Second Quarter, Most Since 2011
*Apple’s IPhone Software Snafu Has Links to Flawed Release of Maps Program
*Alibaba Bears Emerge to Short 8.9 Million Shares Following Public Program
*Rocket Is Doubled IPO to Almost $2 Billion to Spur European Tech Listings
*Draghi May Discover Euro at Two-Year Low Doesn’t Buy Enough of Recovery
*Currency Traders Said to Avoid U.K. Fines as Settlements With Banks Near – more sickness!
*Netflix Said to Get U.S. Data Demands in Antitrust Probe of Comcast Deal
*Smartphones Capable of Bending With Skinny Jeans Remain in Distant Future
*World’s Worst Emerging-Market Bonds Explain GVO Cash Crunch in Brazil
*Next for Derek Jeter Is Strengthening All Those Bent IPhones
*Mystery Ban Who Moves Japan Markets Daily Made More Than 1 Million Trades
*Chicago O’Hare, Midway Airports Shut as Fire Breaks out at Traffic Center – Bad – Arson???
*Ex-U.S. General Petraeus Says Ground Forces Needed to Defeat Islamic State
*Obama Loses Confidant Holder as Relations With Congress Get More Difficult
*Polar Ice Research for Climate Clues Means Keeping a Guard on Bear Watch
Thursday’s Market Summary:
…just when you thought it was safe to go back in the water. The ‘you’ being anyone other than TB: I’ll take your raise, and call you! Were you ‘all in’? NYSE volume remained well above the average volume since April 30th: 3.27B – it’s 8th consecutive 3B+ day which includes last Friday’s options expiration (4.65B – 3rd highest of 2014). Shares traded on the NYSE floor rose slightly to 736M shares – well above the 12-month m/a and only the 4th 700M+ day in 29 sessions (average volume since 4/30 is just 664M shares!). Worst performer was the Russell 2000 -2.1% (now down 4.6% ytd!)…the quarter is evaporating. The NDQ 100 was next -1.9% (with a huge gap from the Composite which was off 1.6%), note there are 103 stocks in the 100 – surprised? – and 101 of them were DOWN yesterday…the other two only marginally higher! The rest were -1.4-1.6% except Dow Utilities which fell 0.7% but are still up 11.3% ytd – price only! Dow Transports have slipped to +13.3%; Nasdaq Comp +7%; S&P 500 +6.4%; NDQ 100 has slipped to +11.6%. Semi-conductor and Biotech sectors are the strongest still up about 18% but both were off about 2% yesterday…they have to fall too! NYSE Financials are up just 1.9% now! A/D’s and Breadth were horrible…especially the latter: NYSE -10.6x!!!; Nasdaq -6.8x!!! New 52 week lows fell again to a new recent – and near historic low of 46, while new lows charged to 382!!! 2nd highest of 2014?
Look at the VIX: closed at 15.84 +2.57 – a 19.4% gain!!! To a very bearish level. Now look at the last two days changes: -11% vs +9.1% – those are huge moves AND 15.84 (highest since 8/8 is hugely bearish!
Total NYSE Volume remains above average at 3.27B shares vs 3.4B vs 3.27B vs 3.3B vs 4.65B (3rd highest of last 12 months) vs 3.2B. Real NYSE Volume steady at 736M shares 734M vs 719M vs 697M vs 1.85B – highest since 3/21 – vs 676M. Only the 4th 700M+ day in 29 sessions! There have been just five sessions above 800M since 4/28! The 12-month average is a historically weak 696M shares. Since 4/30 the average volume is just 664M. 12 month high is 2.06B shares on 9/20/13!
A/D’s were devastatingly negative and have been positive just once in FIVE sessions: NYSE: -4.8x! vs +1.5x vs -2.4x vs -4.7x! vs -1.5x; Nasdaq -4.2x! vs +2x vs -2.3x vs -3.9x! vs -1.9x. Breadth was WORSE!!!: NYSE -10.6x!!! vs +1.8x vs -2.5x vs -5.4x!!! vs -1.6x; Nasdaq -6.8x!!! vs +2.4x vs -2.3x vs -4.4x!!! vs -2.2x. New 52 Week Highs fell to a new recent low of 46! vs 57 vs 39!!! vs 63 vs 222 – recent range is 39-580!!! New Lows jumped to a huge 382!!! from 289 vs 329! vs 237 vs 159 – recent range is 24-382!!! S&P VIX volatility INCREASED dramatically rising 19.4%!!! vs -11% vs +9.1% and closed at 15.84 +2.57!!! That is highest since 8/8! The range was 14.03-16.69!!! Only Friday and Monday have been below ‘13’ in the last 20 sessions.
U.S. bond market closed strong and is headed towards the low yields of the year: 10 yr 2.51% +1/2; 30 yr 3.22% +1-3/16; the long TIP closed at 1.04% (low was 0.87%!) +1-3/16. Weaker but holding most of gains overnight: 2.52% -1/8; 30’s 3.23% -3/8; and long TIP 1.06% -9/16.
Libor update: 0.235% 3 mos.; 0.331% 6 mos., both remain near their record lows, set recently: 0.222% and 0.320% respectively! 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 -0.01%, one-month, to just 0.09% one year!!! Foreign bond yields lower – Spain a tad higher (Benchmark is 10yr): Germany 0.96%! -1; UK 2.44% –; France 1.30% -2; Italy 2.36% –; Spain 2.16% +1; Portugal 3.07% -4!; Greece 6.01% -3 – volatile since the recovery low of 5.42%; Crisis high: 12.57%. Japan: 0.51% –. Bonds remain ‘risky business’!
Gold closed slightly higher at $1221.90 +$2.40 but with a low of $1206.60 – lowest since 1/2/14. Tuesday’s high was $1236.10. This marks it’s 28th 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 $1270, then the 50 day at $1276 and the 200 day at $1284 – incredibly 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 $1219.80 -$1.80 in an insides session. Will $1200 hold??? Important! Silver remains with a ’17’ handle following Monday’s new low of $17.33 – lowest since 2/26/2010!!!
Crude rallied, closing at $93.04 +.51, this coming off a low of $90.58 Tuesday, just above last Thursday’s low of $90.43 – 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 ($94.75!!!), then the 50 day ($96.31), and lastly the 200 day (99.62) – all declining, especially 40/50! The range is $85.61-$112.24 since 3/1/12. Overnight it is $92.91 +.38 in an inside session.
European equity markets higher??? Asia weak! UK +0.2% vs -0.1% vs -0.1% vs -1.6%! vs -0.7%; France +0.9% vs +0.3% vs +0.5% vs -2%!!! vs –0.1%; Germany +0.1% vs +0.5% vs +0.1% vs -1.5%! vs -0.1%; Japan -0.9% vs +1.3%! vs -0.2% vs closed vs -0.7% vs +1.6% vs +1.1%; Hang Seng -0.4% vs -0.6% vs +0.4% vs -0.5% vs -1.4%; Korea -0.1% vs -0.1% vs +0.3% vs -0.5% vs -0.7%; India +0.6% vs -1% vs -0.1% vs -1.6% vs +0.4%. U.S. equity futures opened higher, then dove and now modestly higher: Dow +33 (range 73!); SPX +2.10 (8); NDQ +8 (18).
Some random thoughts:
…is this the ‘dawning of a new bear market’? Yesterday was a huge wake-up call with Sept-Nov being BIG net withdrawal months. A good time to be cautious and alert.
It may be for Pimco as the ‘Bond King’ (sic) Bill Gross leaves…too bad he, who has been wrong on his bets, didn’t leave before Mohammed El-Erian threw in the towel. Where is the $40 million man going? Janus Funds…to manage their biggest bond fund. Outstanding! Know anything about Greek Mythology? Janus has two-faces…and we all know what that means. Two-faced and so typical of Wall Street. That is like Detroit offering a new car and calling it the Lemon…which for GM might not be a bad idea…as it says ‘caveat emptor’ loud and clear.
Eric Holder leaving…tough for Obama. Remember Holder was the guy who said he couldn’t prosecute CEO’s because he worried about the impact on the companies and the shareholders. Not in his job description. What’s it mean? For one thing a tough comfirmation for his successor.
Let’s see how today plays out…probably an ‘up’ day but most likely just another ‘dead cat bounce’.
Enjoy your weekend!