Quote of the Day from the Friars Club Encyclopedia of Jokes: “My son has taken up meditation – at least it’s better than sitting doing nothing.” – Max Kauffmann
Bloomberg Quote of the Day: “In a real dark night of the soul it is always three o’clock in the morning.” – F. Scott Fitzgerald
Next week’s economic calendar is full of important indicators. The highlight of the week will be the Q3 GDP Advance (Thursday) and September Personal Income (Friday). We will also get October Dallas Fed Manufacturing (Monday), September Durable Goods Orders, August Case-Shiller Home Prices, October Consumer Confidence, October Richmond Fed Manufacturing (Tuesday), Q3 Employment Cost, October Chicago PMI and October Consumer Sentiment Final (Friday). In addition, the Federal Reserve FOMC will be meeting on October 28th – 29th with an announcement on the 29th. Courtesy of Economic Advisory Service
Bloomberg Top Stories:
*ECB’s Boost to Bank Shares Fizzles on Outlook for Economy, Tougher Rules – stress tests neg.
*Stocks in U.S. Fall With Oil While Brazil Assets Drop on Rouseff Victory in Brazil
*Bank of America’s August Mortgage Settlement Stalled by SEC Policy Fight
*Nordstrom-Macy’s Pair Trade Rise sa Contrarian Bet to Analysts’ Continues
*Merck Beats Third-Quarter Earnings Estimates as FDA Boost New Cancer Drug
*Commodities Drop to Five-Year Low Led by Sugar, Coffee, on Brazil Currency – Oil hammered!
*Keystone Foes Energized as Tumbling Crude Price dents Oil Sands’ Economics
*Tax Inversions Win When Government Lawyers Quit to Advise Private Practice – beat goes on!
*Mansion Tax That May Never Be Already Depressing London Luxury-Home Market
*Rousseff Says She’s Ready fro Big Changes After Tight Brazil Election Win
*Five-Year-Old Boy Is Tested for Ebola Virus in New York After Africa Visit
*Egypt Army Kills Six Suspected Militant Gunmen After Deadly Sinai Attack
*Arkansas Vote Has Liquor Stores Allied With Churches to Save Dry Counties
Friday’s Market Summary:
What is there left to say about a rumor dominated, volatile ‘speculative’ market. Not much so TB will distill it a bit: BEST performer was Dow Utilities +1.2%!!! Next, Dow Transports +1%. The rest up 0.7-0.8% (again TB hates that!), and the loser was the Russell 2000 up just 0.2% as it attempts to turn this into a respectable year
So, here we go again…stocks making a fool of TB…and perplexing the experts. Get a few positives and the market rallies…negatives, declines…but it is the magnitude of and volatility that is what should get our attention…but not the talking heads…no, sir! They have an answer for anything. So let’s not bother with yesterday other than to say that all indices were up from 2.1% (Transports) to 1.2% (S&P 500), Dow Utilities were still up 0.2% and remain numero uno ytd!
• Total Average Volume: 3.06B shares vs 3.76B shares –
• Volatility: 16.11 -.42 BUT the range rose to 16.09-18.06!!!from 15.68-17.06. Range since 10/6 is 15.04-31.06.the last time it closed above 15 was 8/8/14, then 4/15. The high of 31.06 exceeds the prior highs of the last THREE years. Last time above 30? 11/28/11! In the interim it was 28 once in 2012; and 21.48-22.72 just FOUR times since.
• This month market has been up more than one percent 7 times and down 8 times. But the down days have ruled.
So IF you believe this is a ‘normal’ market and remain bullish, picture all those high frequency traders laughing their fat asses off at your stupidity! And at the heads on CNBC! You want that?
Total NYSE Volume plunged – is this the end of the October high volume? Just 3.06B shares vs 3.76B vs 3.74B vs 3.96B vs 3.3B vs 5.05B vs 6.06B: average volume for October is 3.6B, or about 600M more than the recent average. Shares traded on the NYSE floor – affectionately referred to by TB as REAL volume: for October it is 890M shares!!! This to plunged to 718M, just about the 12-month average, vs 919M vs 802M vs 815M vs 742M vs 1.07B For comparison purposes, for the prior 12 months it is a historically weak 709M shares…but thus far in October, 881M shares – from 895M Thursday – including that HUGE 1.22B share day – highest since 9/19. The lowest was 10/6’s 696M share session. April 30 – September 30 we had just SEVEN 800M shares…for October so far? 14 (this is no time to be superstitious!), including FIVE 900M+ share days.
A/D’s were positive but slipped to just barely: NYSE: +1.6x vs +3.3x! vs -2.2x vs +4.5x vs +2.8x vs +1.9x vs +2.3x vs -1.1x vs +1.6x vs -3.6x -7.2x!!! vs +4x! vs -3.4x; Nasdaq +1.3x vs +2.7x vs -2.8x vs +2.9x vs +2.2x vs 1:1 vs +2x vs +1.2x vs +1.6x vs -2.7x vs -5.8x vs +2.5x vs -4.2x! Breadth was a bit betterl: NYSE +1.8x vs +3.4x vs -3.7x! vs +5x!!! vs +3.1x vs +2.9x vs +1.7x vs -1.4x vs +1.6x vs -5.8x! vs -12.3x!!! vs +3.8x vs -4.7x!!! Nasdaq +1.9x vs +5.7x!!! vs -2.9x vs +6.3x!!! vs +5x!!! vs +1.8x vs +1.4x vs +1.03x vs +1.1x -7.2x!!! vs -4.4x! New 52 Week Highs fell back to 142 vs 171 vs 161 vs 129 vs 62 vs 83 vs 52 vs 49 – their range for the year is 39-580!!! New Lows also a bit lower at 82 vs 89! vs 68 vs 56 vs 82 vs 67 vs 311 vs 1043!!! The 2014 range is 24-1043!!! S&P VIX lower again and remains below those bearish extremes that had a high of 31.06 (highest since 11/28/11!!!) closing at 16.11 -.42 with a range of 16.09-18.06 both high and low climbed making them more bearish and well above 9/18’s 12.03 The average of the past 12 months is 13.83, with a low of 10.32!
U.S. bond market closed little changed weak with the long bond remaining over 3%, and off their recent 12 month low yields (10’s 2.09%; 30’s 2.87%; and long TIP 0.83%), 10’s closing at 2.26% +1/16; 30’s 3.04%!!! +1/4; and the long TIP 0.96% +5/32. A little better overnight: 10’s 2.26% +1/8; 30’s 3.03% +1/4; and long TIP 0.96% +3/16.
Libor update: 0.233% 3 mos.; 0.323% 6 mos., both just above new record lows! The Fed Funds rate has averaged 0.09% and is steady at 0.08-0.10%. T-Bills range from 0.02%, one-month, to just 0.10% one year!!! Foreign bond yields little changed overnight; except volatile Greece and Portugal which are weaker (Benchmark is 10yr): Germany 0.87% -2; UK 2.22% -1; France 1.29% -2; Italy 2.53% +2; Spain 2.13% -4; Portugal 3.32% +9!; Greece 7.30%! +17!!! 10/16’s close was 8.54%! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.46% –.
Gold closed slightly higher at $1231.80 +$2.70, and is again between the 40/50 day m’a’s, following a new recent high of $1255.60, highest since 9/10/14. There have been just two prints below $1200 since 12/31/13 – 10/3 and 10/6 and soundly rejected! Last close above $1300 was on 8/15. 7/17’s session high was $1346.60, highest since March 19th!!! Res/Sup is the 40 day at $1231, Res the 50 day $1242, and the 200 day at $1284. 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 at $1230.10 -$1.70. Silver still holding in low $17’s, after falling to $16.64 on 10/3 – lowest since 2/9/2010 and very close to $15.73, a multi-decade low!!!
Crude gave up Thursday’s gain closing at $81.01 in an inside session. Thursday’s low wsa 2nd only to 10/16’s 79.79. 10/25’s high $84.83, low $79.78, defined October’s range. There have been 28!!! handles since peaking at $107.73 on June 13th at $107.73 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 ($89.17), then the 50 day ($90.26), and lastly the 200 day (98.44) – all declining. The range is now $79.78-$112.24 since 3/1/12. Overnight weaker again at $79.75 -$1.26 with a low of $79.44 – lowest since 6/29/12!
Global equities lower, ex-Japan, Korea: UK -0.6% vs -0.2% vs -0.9% vs +1% vs -0.7% vs -2.8%!!! France -1.4%!!! vs +0.2% vs -1.3%! vs +2.1%!!! vs -1.1% vs -3.6%!!! Germany -1.4%!!! vs +0.4% vs -1.4%! vs +2%!!! vs -0.4% vs -2.9%!!! Japan +0.6% vs +1% vs -0.4% vs +2.6%! vs -2%! vs +4%!!! vs -1.4% vs -2.2%!!! vs -2.4%!!!; Hang Seng -0.7% vs -0.1% vs -0.3% vs +1.4% vs +0.1%; Korea +0.3% vs -0.3% vs -0.3% vs +1.1% vs -0.8% vs +1.6%! vs -1%!; India -0.4% vs +0.2% vs +0.8% vs +0.8% vs +0.6% vs +1.2%! vs +0.4% vs -1.3%. U.S. equity futures lower and market is opening accordingly: Dow -70 (range 135); SPX -10.30 (18); NDQ -12.25 (29).
Some random thoughts:
Not in the mood to write today…too much angst out there already: Ebola scare being used for political purposes – you name the party; Billionaires buying the elections; GOP with no plan for anything looking to control the Senate and thus Congress. Pew Study shows most Americans totally clueless on economy…after all they have been spoon-fed lies on everything…and what does the GOP stand for? Whatever you want it to be…negative ads prevail. What kind of people have we become. Do you honestly think the founding fathers (you know, the ones the GOP talks about all the time), would condone what we have done for their sacrifices? Hardly!
Have a good week!