9/30/14…the Fed loves Goldman…

Quote of the Day from the Friars Club Encyclopedia of Jokes: “I’m now at the age that I have to prove that I am as good as I never was.” – Rex Harrison

Bloomberg Quote of the Day: “You cannot open a book without learning something.” – Confucius

Bloomberg Top Stories:

*EBay Plans to Separate PayPal Unit in bow to Icahn Nine Months After Clash – Alibaba?

*Europe Stocks Rise With U.S. Index Futures as Euro Drops to Two-Year Low

*Pimco’s ETF Sees $446 Million One-Day Outflows Intensify

*Russia Said to Weigh Capital Controls If Net Investment Outflows Intensify

*Home Prices in U.S. Climb at Slowest Pace in Two Years, Case-Schiller Says

*Hong Kong Dollar Seen Protected in Face of Rising Civil Unrest – Hang Seng wasn’t!

*Sumitomo Losses of $2.2 Billion Spur Biggest Drop Since ’96 Copper Scandal

*Bill Gross Gets ‘New Neutral’ Endorsement For Rates on First Day at Janus

*News Corp. to buy Real-Estate Business Move in $950 Million Cash Agreement

*Money Funds Zero Rate Pain to Worsen as Fed Caps Repo Role – Fed Funds at 0.01-0.03%!!!

*Hacker Reconnaissance Has Companies Racing to Fix Shellshock Computer Bug

*Death on American Highway Leaves Dozing Trucker Angry at Widower and God

*Hong Kong Protests Swell as Demonstrators Press Demands for Free Elections

*De Blasio Said to Plan Order Raising New York City’s Living Wage to $13.13

*Spain’s Constitutional Court Suspends Catalan Government Independence Vote

*Ending Demonstrations in Hong Kong Poses Dilemma for Xi Jinping in China

Monday’s Market Summary:

…this could be a quarter-end to remember…or forget! Yesterday was totally bizarre! Out of the chute the Dow was down 165, following the futures lead. Then it began its long climb back but never made it all the way closing down42 or -0.3% – same as the S&P 500. Dow Transports were up 0.2%, Dow Utilities +0.5% for honors, while the rest of the pack was off from 0.1-0.2%. NYSE Financials down 0.7% thanks to Brokers which fell 1%. NYSE Volume back up to 3.07B shares but NYSE trades only rose to a 40M below average 654M shares. A/D’s and Breadth were modestly negative. New 52 week highs only up to 71, while new lows rose sharply to 322. So on a mixed day, how did the VIX respond? It rose 7.5% to 15.98 +1.11 with a range of 15.45-17.08 and that folks spells n-e-g-a-t-i-v-e! How will today fare? See below for clues then wait and see.

Total NYSE Volume rose slightly to an average at 3.07B shares vs 2.91B vs 3.27B vs 3.4B vs 3.27B. Real NYSE Volume rose but remains below average at 654M shares vs 630M vs 736 vs 734M vs 719M. There have been just four 700M+ day in 31 sessions! There have been just five sessions above 800M since 4/28! The 12-month average is a historically weak 697M 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 negative and look bad: NYSE: -1.4x vs +2.7x vs -4.8x! vs +1.5x vs -2.4x vs -4.7x!; Nasdaq -1.3x vs +2.1x vs -4.2x! vs +2x vs -2.3x vs -3.9x! Breadth was similar: NYSE -2.6x vs +3.3x vs -10.6x!!! vs +1.8x vs -2.5x vs -5.4x!; Nasdaq -1.1x vs +4.1x vs -6.8x!!! vs +2.4x vs -2.3x vs -4.4x! New 52 Week Highs slightly higher and remain weak, barely above their new recent low 71 vs 58 vs 46! vs 57 vs 39!!! vs 63 vs 222 – recent range is 39-580!!! New Lows rebounced and remain very high 322! vs 250 vs 382!!! from 289 vs 329! – recent range is 24-382!!! S&P VIX took off rising 7.5% to close at a bearish 15.98 +1.11! – highest since 8/8! The range was 15.45–17.08!!! Only two ’12 prints in the last 22 sessions.

U.S. bond market closed strong and traded there all day: 10 yr 2.48% +7/16; 30 yr 3.17% +15/16; the long TIP closed at 1.08% vs 1.05% (record low was 0.87%!) +13/16. Weaker overnight: 2.51% -1/4; 30’s 3.19% -1/2; and long TIP 1.07% -1/2.  

Libor update: 0.235% 3 mos.; 0.330% 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 but PLUNGED o/n and is now 0.01-0.03%!?! T-Bills range from 0.01%, one-month, to just 0.10% one year!!! Foreign bond yields mixed, PIIGS lower, ex-Greece!!! (Benchmark is 10yr): Germany 0.96%! –; UK 2.44% +1; France 1.29% -1; Italy 2.35% -5; Spain 2.15% -7; Portugal 3.13% –; Greece 6.49% +10! – volatile since the recovery low of 5.42%; Crisis high: 12.57%. Japan: 0.52% +1. Bonds remain ‘risky business’!

Gold closed slightly higher at $1218.80 +$3.40, in a very narrow range inside session. Last Thursday’s low was $1206.60 – lowest since 1/2/14. Tuesday’s high was $1236.10. This marks it’s 30th 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 $1266, then the 50 day at $1273, 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 WEAK…$1207.30 -$11.50 – with a low of $1204.00 – still lowest since 1/2/14, but ??? Silver remains with a ’17’ handle with a new low of $17.08 – lowest since 2/26/2010!!! Could break $17 today!

Crude had a very good day closing at $94.57 +$1.03, and a high of $94.61 – both now above the 40/day m/a! Recent low is 9/18’s $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. SUP/RES at the 40 day ($94.55), then further Res at the 50 day ($95.95), and lastly the 200 day (99.58) – all declining, especially 40/50! The range is $85.61-$112.24 since 3/1/12. Overnight little changed at $94.50 -.07 wit a low of $94.00.

European equity markets higher ex-U.K.; Asia weak: UK -0.3% vs -0.5% vs +0.2% vs -0.1% vs -0.1% vs -1.6%! France +1.1% vs -1.2% vs +0.9% vs +0.3% vs +0.5% vs -2%!!!; Germany +0.4% vs -1.1%! vs +0.1% vs +0.5% vs +0.1% vs -1.5%! Japan -0.8% vs +0.5% vs -0.9% vs +1.3%! vs -0.2%; Hang Seng -1.3%! vs -1.9%!!! vs -0.4% vs -0.6% vs +0.4%; Korea -0.3% vs -0.3% vs -0.1% vs -0.1% vs +0.3%; India +0.1%% vs -0.1% vs +0.6% vs -1% vs -0.1% vs -1.6%. U.S. equity futures slightly higher: Dow +27 (range 73); SPX +3.70 (9); NDQ +16.75 (29).

 

Some random thoughts:

…Michael Lewis should hire a bodyguard…after the article referred to here yesterday, now the Fed as well as Wall Street is going to hate him…want him dead? Here is the link, very disturbing:: the-secret-goldman-sachs-tapes

Have a great day…the quarter depends on it…only one more day for TB, then off to Italy, Dalmation coast, Athens, and Istanbul.

TB

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