11/6/14…let’s all work together (snicker)

Quote of the Day from the Friars Club Encyclopedia of Jokes: “I have a great dog. She’s half Labrador, half pit bull. She might bite off my leg, but she’ll bring it back to me.” – Jimi Celeste

Bloomberg Quote of the Day: “Autumn is a second spring when every leaf it a flower.”

– Albert Camus…aww….

 

Bloomberg Top Stories:

*First-Time Jobless Claims in U.S. Declined More Than estimated Last Week, -10k

*Productivity in U.S. Rises More than Forecast, Curbing Costs: +2% BUT Wages just +0.3%

*ECB Keeps Rates Unchanged at Record Lows as Draghi Tests Limits of Power – Unanimous!

*Fed’s Concern With Repeat of 1937 Tightening Blunder Is Echoed by Markets – why raise?

*Barclays CEO Sees Fewer Bankers Earning Top Salaries After Reorganization – not Dimon!

*SNC-Lavalin Cutting 4,000 Jobs Amid Slump, Reduces Annual Profit Forecast

*OPEC Reduces Almost All Demand Forecast for Its Crude on U.S. Shale Boom

*Walgreens Said to Plan Bond Sale to Help finance Alliance Boots Acquisition – count TB out!

*Auto-Parts, Dollar Stores Seen Gaining From Oil’s Drop – they always gain…high or low!

*Buzz Out of Washing Takes On Whole New Meaning After Vote – you don’t say?

*Darts Champion Taylor Powers His Way From Factory Worker to Millionaire – not with darts!

*Obama’s Immigration Vow Clashes With McConnell’s as Agenda Tests Goodwill

*Saudi Suspect in Attack on Shiites Crossed Over Country’s Southern Border

*New York Senate Takeover by republicans Seen as Thwarting Mayor De Blasio

*Minimum Wage, Pot Legalization Seen as Paths to Votes for Democrats in ‘16

*Ukraine Accuses Russia of Deploying Troops as Cease-Fire Weakens in East – can it be???

*Harsh Winter Outlook Just Got More Dire as Snow Keeps Fallng in Siberia – and in no. MN!

Wednesday’s Market Summary:

Some gotta win, some gotta lose…that’s the way the numbers worked yesterday: Both Nasdaq’s -0.1%, Dow and S&P +0.6%, Dow Transports +0.5%, and the struggling Russell 2000 +0.1%. Darn, forgot to mention Dow Utilities: +2%!!! Now up 29.1% for the past 12 months with dividends reinvested!!! Don’t that beat all! It most certainly does, stock bulls! Volume slightly lower again at 3.76B shares; A/D’s and Breadth modestly positive, new 52 week highs jumped to a strong 390 from 316 while new lows were steady at a high 155. Vix declined again for the first time in three sessions to 14.17 -.72…not quite back to it’s 14.09 low and the range was entirely ‘14’s.

That’s all you need to know – period! Whatever you think, that is not going to change your mind.

Total NYSE Volume slipped to 3.76B shares from 3.92B vs 3.53B vs 4.26B vs 3.63B: 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 lower but still above average at 796M shares vs 833M vs 794M vs 1.04B vs 763M. For comparison purposes, for the prior 12 months it is a historically weak 712M shares…but since 10/1: 865 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…since 10/1, 16, and FIVE 900M+ days.

A/D’s were modestly positive: NYSE: +1.4x vs -1.8x v -1.1x vs +3.3x vs +1.7x; Nasdaq +1.1x vs -1.3x vs -1.2x vs +2.3x vs +1.7x. Breadth was similar: NYSE +1.7x vs -2.3x vs -1.1x vs +4x! vs +1.5x; Nasdaq +1.4x vs -1.2x vs +1.4x vs +3.3x! vs +1.1x. New 52 Week Highs sharply higher at 390 vs 316 vs 416 vs 612 vs 351 – their range for the year is now 39-612!!! New Lows unchanged at 155 vs 155 vs 94 vs 137 vs 153. The 2014 range is 24-1043!!! S&P VIX closed lower at 14.17 -.72 for its 7th 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 stayed in the 14’s: 14.15-14.99. Remains 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 a little weaker – oscillating and indecisive. The recent 12 month low yields (10’s 2.09%; 30’s 2.87%; and long TIP 0.83%), 10’s closed at 2.34% -3/32; 30’s 3.06% -1/4; and the long TIP 0.96% +1/32. Slightly better overnight: 10’s 2.34% +1/16; 30’s 3.06% +1/32; and long TIP 0.95% +1/16. QE’s may end, but dump $4.3 trillion???…is there an App for that?  

Libor update: 0.232% 3 mos.; 0.326% 6 mos., both steady and 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 0.03%, one-month, to just 0.09% one year!!! Foreign bond yields a little lower, led by PIIGS (Benchmark is 10yr): Germany 0.83% –; UK 2.23% -3; France 1.19% –; Italy 2.39% -4; Spain 2.14% -5; Portugal 3.19% -7; Greece 7.73% -10!. 10/16’s close was 8.54%! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.46% –.

Gold was slammed hard, falling to $1137.10, lowest since 6/30/10! It then came back but still closed at $1145.70 -$22, that’s $72 in five sessions! That recent intraday high of $1255.60, highest since 9/10/14, has been totally rejected. The last 7 sessions have had prints below $1200 first time since 12/31/13 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 $1219, the 50 day $1228, and the 200 day at $1282, and accelerating the fall. Recent high was $1392.60 on 3/17, highest high since 9/4/13. Jan. 2’s low was $1181.40 – obliterated! Overnight it declined to $1137.20 and is now $1143.90 -$1.80. Silver remains weak and also put in a new yesterday of $15.12, more than a five year low and heading towards $14.65, a multi-decade low!!! Hanging on by a thread.

Crude closed higher finally at $78.68 +1.49, following Monday’s intraday low of $75.84, lowest since 10/14/11!!! 10/25’s high was $84.83. There have now been 32!!! 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 ($86.88), then the 50 day ($88.26), and lastly the 200 day (97.95), all accelerating to the downside. The range is now $75.84-$112.24 since 3/1/12. Overnight it is slightly weaker at $78.20 -.48 in an inside session.

Global equities modestly lower, ex-Korea, India closed: UK -0.1% vs +1.1% vs -0.6% vs +1.1%! vs -0.6%; France -0.3% vs +1.6%! vs -0.6% vs +2.3%!!! vs -0.4%; Germany -0.2% vs +1.7%! vs -0.6% vs +2.1%!!! vs -1%; Japan -0.9% vs +0.4% vs +2.7%!!! vs closed vs +4.8%!!! Hang Seng -0.2% vs -0.6% vs -0.3% vs -0.3% vs +1.3%!; Korea +0.3% vs -0.2% vs -0.9% vs -0.4% vs +0.3%; India closed vs +0.2% vs – vs -0.1% vs +1.9%! U.S. equity futures slightly weaker in a narrow range: Dow -13 (range 42); SPX -3.60 (6); NDQ -4 (13).

Some random thoughts:

…gridlock is dead…long live gridlock. That is the topic of an editorial on Bloomberg today but its founder, Michael R. Bloomberg. Think of it: once again a party sweeps and once again they believe they have a mandate. Reince Prince (can you believe that name?) says look at the ‘repudiation’ of Obama’s policies…look at the new Republican governors (one race cost $130 million – for a governor!). Ah, yes, just as when Obama was first elected, the winner declares a mandate, but it is anything BUT! Here’s TB’s take…take it or leave it:

*voters are trying to break the gridlock…and it isn’t happening. They will once again be disillusioned in two years and the mandate (sic) may move back to the Dems…who knows?

*not all the GOP’er’s elected will please the party. Just as with the Tea Party, these people are more independent providing yet another challenge for House Speaker Boehner. McConnell will have it easy…and he, even worse than Reid is an angry old man. Whose idea was it to give these guys pensions? Oh, sorry, it was their idea!…for all their service (which most certainly wasn’t in the military!). An aside: TB is reading For Love of Country, a collection of stories of Iraq and Afghanistan heroism and self-sacrifice, a collaboration of Howard Schultz (Starbuck’s CEO – see not everything they do is bad), and veteran Washington Post war correspondent Rajiv Chandrasekaran (author of Imperial Life in the Emerald City: Inside Baghdad’s Green Zone, and Little America, on Afghanistan). The stories are gut-wrenching – too bad our elected officials who have never served are so ‘hot’ to send our young men and women in harn’s way…watch John McCain as he demands ‘boots on the ground’ to fight ISIL…at least he served and was a POW, yet he wants to commit American lives once again.

*The average age of the newly-elected GOP’er’s is 39, meaning it will be harder to get them to drink the kool-aid. Or how about the ‘cow-castrating’ Joni Ernst, who says she will use that experience to get the Dems in line? Just what America needs now…another ideologue!

*GOP continues to fight the last battle: the deficit, which is lower than when Obama took office. Won’t spend on infrastructure (power grid, highways, bridges), and thanks to their pledge to Grover Norquist, won’t even do it with a small increase in the gas tax! Oh, Sen. Bernie Sanders (I-VT), says that a $1 trillion infrastructure program could create 3 million jobs,,.so what?

*TB’s bet is that once again voters will be disappointed, but not the backers who put up those millions setting the stage for yet another record presidential election expense.

 

That’s enough for now…remember: he who dies with the most toys wins!

 

TB

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