9/29/14…it’s in the news…sadly!

Quote of the Day from the Friars Club Encyclopedia of Jokes: “If a man watches three football games in a row, he should be declared legally dead.” – Erma Bombeck

Bloomberg Quote of the Day: “Intelligence without ambitions is a bird without wings.”

– Salvador Dali

Attached is the next two weeks economic calendar. This week’s economic calendar is packed with important indicators. The highlight of the week will be the August Personal Income (Monday), September ISM Manufacturing Survey (Wednesday), September Employment Situation report and September ISM Non-Manufacturing Survey (Friday). We will also get September Dallas Fed (Monday), July Case-Shiller HPI, September Chicago PMI and September Consumer Confidence (Tuesday), September ADP Employment, August Construction Spending and September Motor Vehicle Sales (Wednesday), August Factory Orders (Thursday), August International Trade (Friday). Courtesy of Economic Advisory Service

Bloomberg Top Stories:

*Consumer Spending in U.S. Increased by 0.5% in August as Incomes Climbed

*Stocks in U.S. Decline With Global Equities; Treasuries Advance – looks very SICK!!!

*Pimco’s Ivascyn to Challenge Janus’s Gross Leading Unconstrained Bond Fund – good luck!

*Lloyd’s Dismisses Eight, Claws Back Bonuses After Libor Rate-Rigging Fines

*Hong Kong Stocks Slump With Currency After Crackdown on Democracy Protests

*Allianz CEO Says It’s Too Early to Estimate Pimco’s Outflows After Gross – …or inflows?!?

*Apple Said to Face EU Probe of Ireland Tax Deals With Starbucks to Follow – not good news!

*Draghi’s Devaluing Euro Cheers ECB as Inflation Seen at Weakest (?) Since 2009

*Gross’s Exit Looming Over Mexico’s Bond Market After Worst Quarter in Year

*Wall Street Cyclists Reassess Need for Speed in City After Death in Park

*Hong Kong Democracy Protests Swell Anew as Crowds Pour Back Into Streets

*Ukrainian Army Suffers Worst Day Since Truce as Fighting Flares in Donetsk

*Islamic State Shells Hit Turkey as Fighting Intensifies in Northern Syria

*Daily Dose of Aspirin May Cut Risk of Prostate Cancer, Study Dhows

Friday’s Market Summary:

Nice rally, huh? Ok, it was better than a ‘dead cat bounce’, which was the most TB expected but that didn’t help the Russell 2000 (which didn’t have one): +0.8% vs -2.1%! The rest were up from 0.9% (S&P 500) to 1.2% (Dow Transports and NDQ 100). Dow Utilities rose 0.4% vs -0.7% to qualify at the goat du jour. Now for the real weirdness: A/D’s and Breadth were both positive but nowhere near the negatives posted Thursday! Now look: new 52 week high barely rose to an extremely weak 58 – second lowest in recent times! Meanwhile, new lows slipped but remain high and bearish at 250! The VIX declined but only from a very bearish 15.84 to 14.86 – and that should cause a high level of concern! NYSE Volume also fell back to an average 2.91B shares while shares traded on the NYSE floor went from an above average 736 to a well below average 630 – for the week the average was 703M shares…only about 7M above the 12-month average!

Should make for an exciting end to the 3rd quarter tomorrow!

Total NYSE Volume slipped to a slightly below average at 2.91B shares vs 3.27B vs 3.4B vs 3.27B vs 3.3B vs 4.65B (3rd highest of last 12 months). Real NYSE Volume also fell to a below average 630M shares vs 736 vs 734M vs 719M vs 697M vs 1.85B – highest since 3/21. There have been just four 700M+ day in 30 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 663M. 12 month high is 2.06B shares on 9/20/13!

A/D’s were positive but nothing in comparison to the negatives in the prior four sessions: NYSE: +2.7x vs -4.8x! vs +1.5x vs -2.4x vs -4.7x!; Nasdaq +2.1x vs -4.2x! vs +2x vs -2.3x vs -3.9x! Breadth was similar: NYSE +3.3x vs -10.6x!!! vs +1.8x vs -2.5x vs -5.4x!; Nasdaq +4.1x vs -6.8x!!! vs +2.4x vs -2.3x vs -4.4x! New 52 Week Highs barely budged from their new recent low to 58 vs 46! vs 57 vs 39!!! vs 63 vs 222 – recent range is 39-580!!! New Lows came off a huge new recent high but remain elevated at 250 vs 382!!! from 289 vs 329! vs 237 – recent range is 24-382!!! S&P VIX volatility declined modestly but only to 14.86 -.78 from 15.84 +2.57 – highest since 8/8! The range was 14.31-15.98 – Thursday’s high was 16.54!!! Only two ’12 prints in the last 21 sessions.

U.S. bond market closed slightly lower – TIPS hit hard though: 10 yr 2.53% -1/4; 30 yr 3.22% -1/8; the long TIP closed at 1.08% vs 1.04% (low was 0.87%!) -1-1/8! Strong overnight: 2.49% +3/8; 30’s 3.17% +7/8; and long TIP 1.06% +5/8.  

Libor update: 0.235% 3 mos.; 0.331% 6 mos., both remain near their record lows, set recently: 0.233% 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 mixed, PIIGS weak, led by Greece!!! (Benchmark is 10yr): Germany 0.96%! -1; UK 2.43% -4; France 1.30% -1; Italy 2.42% +4; Spain 2.24% +5; Portugal 3.11% +4; Greece 6.38% +38!!! – volatile since the recovery low of 5.42%; Crisis high: 12.57%. Japan: 0.51% –. Bonds remain ‘risky business’!

Gold closed slightly lower at $1215.40 -$6.50, higher high, higher low following Thursday’s low of $1206.60 – lowest since 1/2/14. Tuesday’s high was $1236.10. This marks it’s 29th 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 $1268, then the 50 day at $1274 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 $1220.50 +$5.10. Silver remains with a ’17’ handle following Monday’s new low of $17.33 – lowest since 2/26/2010!!!

Crude also had a higher high, higher low, but closed at $93.54 +.04, four days after hitting a low of $90.58 Tuesday, just above the prior Thursday 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 ($94.64!!!), then the 50 day ($96.12), and lastly the 200 day (99.60) – all declining, especially 40/50! The range is $85.61-$112.24 since 3/1/12. Overnight: $92.99 -.55.

European equity markets weak, Asia mixed: UK -0.5% vs +0.2% vs -0.1% vs -0.1% vs -1.6%! France -1.2%! vs +0.9% vs +0.3% vs +0.5% vs -2%!!!; Germany -1.1%! vs +0.1% vs +0.5% vs +0.1% vs -1.5%! Japan +0.5% vs -0.9% vs +1.3%! vs -0.2% vs closed; Hang Seng -1.9%!!! vs -0.4% vs -0.6% vs +0.4% vs -0.5% vs -1.4%; Korea -0.3% vs -0.1% vs -0.1% vs +0.3% vs -0.5%; India -0.1% vs +0.6% vs -1% vs -0.1% vs -1.6%. U.S. equity futures CRUSHED after opening slightly higher: Dow -154 (range 168!!!); SPX -19 (21); NDQ -43 (52). U.S. stocks opening WEAK!

 

Some random thoughts:

…how about a news roundup…since stocks are getting crushed after their ‘faux’ rally on Friday? Makes sense to TB:

1. Here is an appalling article by Michael Lewis on how the Fed is ‘in bed’ with Wall Street. Very disturbing: the-secret-goldman-sachs-tapes

2. Robert Reich on how the ‘new, improved’ bankruptcy act which took effect shortly after Hurricane Katrina is punishing the working class. GOP got healthcare and student loans removed and shortened the filing deadline…result? Only the rich can file… Bankruptcy-lets-rich-make-risky-bets

Have a great week…only two more days for TB, then off to Italy, Dalmation coast, Athens, and Istanbul…or is it Constantinople?…can’t recall…

TB

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