Bloomberg Top Stories:
*Dollar Strengthens on U.S. Outlook (?) as Gas Advances; Stocks, Ruble Decline – ???
*HSBC Drops After Profit Misses Estimates on Legal Cost for Currency Probe
*Billionaire Malone Gained Double Tax Break in Liberty Global’s Inversion – isn’t that swell?
*ECB Skips Celebration for Day One of Supervision as Bad-Loan Heap Smolders – yes it do!
*Bond Market’s Insatiable Treasuries Demand Means Nobody Mourns Death of QE – so true!
*Emerging-Markets ETFs lose Investor Cash for the First Month Since March – !!!
*Hedge Funds With No More Room to Play in bonds May Misjudge Insurance, XL Says
*Portugal Finds Chinese Make 90% of Bids at Government Real Estate Auction – !!!
*Yen’s Worst Seen Coming in Options as Kuroda’s Stimulus Shocks – nothing is easy!
*Man Running World’s Biggest Wealth Fund Says all Investments Lead to China – oh, oh!
*Republicans Have Edge in U.S. Congress Vote With Senate Too close to Call – oh, duh!
*Ebola Dominates Debate as Africa Picks WHO Leader From Undisclosed List
*Brownback Faces Electoral Blowback as Kansas Tax Cuts Shutter Classrooms – go GOP!
Friday’s Market Summary:
What a fool TB is! How could he miss that lesson in Abenomics? With just one comment, Japan caused a global rally as they re-stimulate – for the umpteenth time, but they are serious this time! Yes, they are going to force their people to consume more…how else does one explain it? They will rush out to buy another widescreen TV for their 600 square foot home! Oh, stop being such a cynic TB as originally stated: this time they are serious. So serious that the Nikkei rallied 4.8% (don’t look for guidance today because Japan is closed!), and dragged the rest of the world with it…don’t think any major global index was up less than 1% (except Korea but they too were up. 0.3%). Of course, the U.S. markets were only too happy to oblige…afterall it was Halloween…and monthend…and the majors were up from 1.1% (Dow) to 1.5% (Russell 2000). Dow Utilities not so much as they gained just 0.1%, but you know what? For the month they were up 7.5% – price only!!! That left the Dow and S&P in the dust (+2.6% and 2.2% respectively). Of course ytd they all pale compared to Utilities (21.7% – again, price only!), with Dow Transports in 2nd at +18.3%). Remember: perception is everything!…isn’t it?
Volume was a strong 4.26B – after all it was month end and a lot of indexers must have been trying to make up for lost ground…ya think? At the closing bell, trades on the NYSE floor were 722M but closing trades put total volume at 1.044B shares! See what TB means? A/D’s and Breadth were strong, new 52 week highs surged to 612 but new lows stubbornly slightly only lower at 137. The VIX declined but just by .49 and just to 14.04 despite probing down to 13.72 intraday – first time since 9/24!
Will we have a continuation today? Overnight markets say no…but it’s early and after all this IS a free country…at least for now. Europe is off about 0.5%, Asia less but still in the red, and U.S. futures are modestly weaker.
Total NYSE Volume strong at 4.26B shares vs 3.63B vs 3.74B vs 3.61B vs 3.47B: average volume for October is 3.7B, or about 700M more than the recent average. Shares traded on the NYSE floor – affectionately referred to by TB as REAL volume: for October rose 872M shares. Volume was strong at 1.04B shares (but 723M at the bell) vs 763M vs 823M vs 785M vs 760M vs 718M. For comparison purposes, for the prior 12 months it is a historically weak 712M shares…but thus far in October, 872M shares – including that HUGE 1.22B share day – highest since 9/19, followed by two more 1B plus days leading to options expiry!. The lowest was 10/6’s 696M share session. April 30 – September 30 we had just SEVEN 800M shares…for October 15, now with SIX 900M+ days.
A/D’s were pretty strong: NYSE: +3.3x vs +1.7x vs -1.3x vs +4.6x!!! vs -1.3x; Nasdaq +2.3x vs +1.7x vs -1.2x vs +3.8x! vs -1.1x; Breadth was stronger: NYSE +4x! vs +1.5x vs -1.6x vs +4.8x!!! vs -2.1x; Nasdaq +3.3x! vs +1.1x vs -1.5x vs +5x!!! vs +1.1x. New 52 Week Highs surged to 612 vs 351 vs 312 vs 326 vs 161 – their range for the year is now 39-612!!! New Lows slightly lower at 137 vs 153 vs 86 vs 80 vs 136. The 2014 range is 24-1043!!! S&P VIX closed slightly lower at 14.04 -.49 for its 4th sub-15 close since peaking on 10/15. Still well below those bearish extremes that had a high of 31.06 (highest since 11/28/11!!!). The range dropped below 14-15 for the first time since 9/24: 13.72-14.83. Remains slightly bearish and well above 9/18’s 12.03 low close. The average of the past 12 months is 13.94, with a low of 10.32!…high close 26.35 on 10/14!
U.S. bond market closed modestly lower. The recent 12 month low yields (10’s 2.09%; 30’s 2.87%; and long TIP 0.83%), 10’s closed at 2.33% -3/32; 30’s 3.06% -5/16; and the long TIP 0.97% -1/4. A little better overnight: 10’s 2.32% +1/4; 30’s 3.05% +1/4; and long TIP 0.96% +3/8. QE’s may end, but dump $4.3 trillion??? No way!…in fact there IS no way to do that!
Libor update: 0.232% 3 mos.; 0.328% 6 mos., both steady and just above new record lows! The Fed Funds rate has averaged 0.09% and is back to 0.08-0.10%. T-Bills range from -0.00%, one-month, to just 0.09% one year!!! Foreign bond yields mixed, but the PIIGS are higher (Benchmark is 10yr): Germany 0.84% –; UK 2.24% –; France 1.19% +1; Italy 2.40% +6; Spain 2.14% +7; Portugal 3.24% +4; Greece 7.97%! +10!. 10/16’s close was 8.54%! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.45% –.
Gold continues to implode: first it declined intraday to $1160.50 then barely came back to close at $1171.60 -$27.00, keeping the m/a’s out of sight and out of reach. So much for that recent high of $1255.60, highest since 9/10/14. There have now been for sessions with prints below $1200 since 12/31/13 – 10/3 and 10/6, 10/30 and 10/31. Last close above $1300 was on 8/15. 7/17’s session high was $1346.60, highest since March 19th!!! Res is at $1200 (psychological), then the 40 day at $1225, the 50 day $1235, and the 200 day at $1283. 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 trading in a narrow, inside range and is now $1170.40 -$1.20 Silver also broke down with a low of $15.63 Friday, more than a five year low and heading towards $14.65, a multi-decade low!!! It is now just $16.06 -.05.
Crude closed weaker at $80.54, still supported by 10/27’s $79.44 intraday low – lowest since 6/29/12. 10/25’s high $84.83, low $79.44, defining 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 ($87.94), then the 50 day ($89.18), and lastly the 200 day (98.21), all accelerating to the downside. The range is now $79.44-$112.24 since 3/1/12. Overnight little changed at $80.79 +.25.
Global equities weaker following their blowout rally Friday…Japan was the catalyst. up a HUGE 4.8%!!! – but closed today!!! UK -0.6% vs +1.1%! vs -0.6% vs +0.6% vs +0.6%; France -0.6% vs +2.3%!!! vs -0.4% vs +0.1% vs +0.6% vs -1.4%; Germany -0.6% vs +2.1%!!! vs -1% vs +0.6% vs -1.6% vs +1.4%; Japan closed vs +4.8%!!!!! vs +0.7% vs +1.5%! vs -0.3%; Hang Seng -0.3% vs +1.3%! vs -0.5% vs +1.3% vs +1.6%; Korea -0.4% vs +0.3% vs -0.1% vs +1.8%! vs -0.3%; India -0.1% vs +1.9%!!! vs +0.9% vs +0.9% vs +0.5%. U.S. equity futures consolidating (?) Dow -18 (range 44 vs 222!!!); SPX -0.70 (5 vs 28!); NDQ -0.25 (7 vs 65!).
Some random thoughts:
It’s time to take stock of what we have become…as a country…as a people…as individuals. The word is: pathetic! We are like the proverbial frog in the vat of water, oblivious to the rising temperature which will kill us. We have our own lack of care or concern to blame as well as the U.S. Supreme Court which was supposed to protect our democracy…and failed with Citizens United and other recent decisions…right wing extremists have one more vote on the court and that is a vote against, we, the people. Conversely, it is one more vote for Wall Street and billionaires (overlapping). For a reality check, watch this clip from Moyers and Co. featuring Sen. Bernie Sanders (I-Vt), the only independent in the U.S. Senate, and a man fighting for the people:
Moyers/Sanders. Why must one man have to carry the burden for the entire country while the majority continues to lose ground and the GOP scoffs at its middle-class and below constituents? Dunno, but it can’t last and won’t last much longer if this years campaign ads are allowed to continue…lies, damned lies, and politics. Kudos to Jon Stewart for thanking the Koch brothers for sponsoring The Daily Show with their pompous, self-serving ads on how much their companies have done for America…while they took control of the Tea Party – more frogs in the pot!
Cannot stress the value of Moyers recent interview enough…they have been on point and only a blind – and deaf – fool can’t see what is happening. Be sure to vote tomorrow…your vote counts (snicker). Of course you could do like the Iraqi Sunni’s did and boycott the elections…isn’t it sad when we have been ingrained with how important our right to vote is but so many have thrown in the towel as they don’t know what to believe. Ah, but you’re different, right? You have all the facts…don’t you? Are you sure?
Have a great day…and remember, your vote doesn’t count! So don’t think!