Bloomberg Top Stories:
*Bank of Russia Ready to Increase Interventions at Any Time – how about now???
*Payrolls Gains Top 200,000 Ninth Month as U.S. Jobless Rate Drops to 5.8% – labor force (156.278). household employment (147,283), and participation rate (62.8%), all up ‘slightly’
(note: 214k new jobs…vs 256k in Sept.; Workweek +0.1%; wages +0.2%(+2% 12 mos); REAL unemployment rate including part-time for economic reasons: 11.5% vs 11.8%)
*Dollar Falls as Treasuries Rise With S&P 500 Futures on Jobs Report – ?
*Transocean Takes $2.76 Billion in Writedowns Amid Glut in Drilling Rigs – !!!
*Pimco Offers Extra Bonuses to Keep Talent After Gross’s ‘Surprise’ Departure
*Biggest Weekly Money Flow to Technology Since 2013 Signalling Growth Gain
*Canada Posts Surprise Decline in Unemployment Rate to Six-Year Low of 6.5%
*Fink Says BlackRock Had One ‘Big’ Seller During October Stock Market Rout
*IPO Scandal in Denmark Is ‘Poison’ for Stock Market, Nasdaq Executive Says – No, say no!
*ICE Chosen to Run Replacement for Century-Old London Gold ‘Fixing’ Market
*U.S. Jobs Report Often Seems to Be a Rorschach Test for Nerds – ain’t that the truth!
*Detroit’s Bankruptcy Teaches Municipal Bond Investors Some Painful Lessons – do tell!
*Four Takes on OPEC’s Vienna Decision as Price Plunge for Crude Oil Deepens – none good
*Ukraine Military Says Up to 200 Rebels Killed in Donetsk Airport Fighting – a start!
*Same-Sex Marriage Ban Upheld for First Time by Appeals Court in Cincinnati – get real!
*Berlin to Rebuild Wall’s Outline With Festive Lights on 25th Anniversary – there were two
*Catalans Recast Spanish History as Momentum Builds for Independence Vote
Thursday’s Market Summary:
Who cares…today is the day it counts…after all, it’s Payrolls Friday! At least on the surface it should be a good one for stock indices, all of which were up the nearly identical 0.3%-0.04% – with the exception of Dow Transports +1.3% and Dow Utillties DOWN 1.8% BUT vs +2%! Volume was slightly lower but still ‘average’; A/D’s and Breadth were moderately positive again; new 52 week highs slipped but remain solid, as did new lows. The VIX declined to a more ‘neutral’ 13.67 -.50 but top of the range in a wild session was 15.08!?! A lot to digest along with payrolls…hmmm
Total NYSE Volume slipped again to 3.6B shares vs 3.76B vs 3.92B vs 3.53B vs 4.26B: 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 again but still above average at 752M shares vs 796M vs 833M vs 794M vs 1.04B. For comparison purposes, for the prior 12 months it is a historically weak 712M shares…but since 10/1: 860 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 moderately (?) positive: NYSE: +1.3x vs +1.4x vs -1.8x v -1.1x vs +3.3x; Nasdaq +1.4x vs +1.1x vs -1.3x vs -1.2x vs +2.3x. Breadth was similar: NYSE +1.4x vs +1.7x vs -2.3x vs -1.1x vs +4x! Nasdaq +1.5x vs +1.4x vs -1.2x vs +1.4x vs +3.3x! New 52 Week Highs lower at 328 vs 390 vs 316 vs 416 vs 612 – their range for the year is now 39-612!!! New Lows also a tad lower at 145 vs 155 vs 155 vs 94 vs 137. The 2014 range is 24-1043!!! S&P VIX closed lower at 13.67 -.50 for its 8th 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 weaker for a second day. The recent 12 month low yields (10’s 2.09%; 30’s 2.87%; and long TIP 0.83%), 10’s closed at 2.39% -3/8; 30’s 3.10% -7/8; and the long TIP 0.98% -13/16. Surprisingly better following payrolls??? 10’s 2.36% +1/4; 30’s 3.09% +5/16; and long TIP 0.97% +3/8. 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 0.10% one year!!! Foreign bond yields little changed and mixed (Benchmark is 10yr): Germany 0.84% +1; UK 2.24% –; France 1.19% –; Italy 2.36% -2; Spain 2.14% -1; Portugal 3.22% +1; Greece 7.82% +5. 10/16’s close was 8.54%! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.47% +1.
Gold closed slightly lower at $1142.60 -$3.10, lowest since 6/30/10! This only after a plunge to $1137.20, just 10 cents above thus weeks low, not seen since June 2010. Now off $77 in six sessions! The recent intraday high of $1255.60, highest since 9/10/14, has been totally rejected. The last 8 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 $1216, the 50 day $1225, and the 200 day at $1281, and accelerating to the downside. 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 a NEW low of $1130.40 but bounced back and is now $1150.80 +$8.20??? Go figure! Silver remains weak and with Wednesday’s low of $15.12 holding, more than a five year low and heading towards $14.65, a multi-decade low!!! Hanging on by a thread.
Crude closed lower at $77.91 -.77 in an ‘inside’ session, 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 ($86.50), then the 50 day ($87.93), and lastly the 200 day (97.86), all accelerating to the downside. The range is now $75.84-$112.24 since 3/1/12. Overnight it is slightly better at $78.23 +.33 in another inside session.
European equities mostly weak, ex-UK, Asia mixed: UK +0.3% vs -0.1% vs +1.1% vs -0.6% vs +1.1%! France -0.9% vs -0.3% vs +1.6%! vs -0.6% vs +2.3%! Germany -0.7% vs -0.2% vs +1.7%! vs -0.6% vs +2.1%! Japan +0.5% vs -0.9% vs +0.4% vs +2.7%!!! vs closed vs +4.8%!!! Hang Seng -0.4% vs -0.2% vs -0.6% vs -0.3% vs -0.3% vs +1.3%!; Korea +0.2% vs +0.3% vs -0.2% vs -0.9% vs -0.4%; India -0.2% vs closed vs +0.2% vs – vs -0.1% vs +1.9%! U.S. equity futures slightly weaker again (?), ex-NDQ: Dow -21 (range 74); SPX -2.40 (9); NDQ +2.75 (17). U.S. Market opening mixed: Dow -33; Trans +20; SPX -4; Utilities +2; Nasdaq Composite -4
Some random thoughts:
…if Congress won’t protect the American people, who will? The Obama/Holder Justice Dept? You have to be kidding! The Surpreme Court? Anything but! The SEC? Hah! But worst it the Federal Reserve…thanks to revelations in Rolling Stone, Salon, and growing. Their head lawyer, whose name you have never heard of, Scott Alvarez (appointed by anti-regulationist, Alan Greenspan, took the side of AIG in the recent trial…in other words, for the plaintiffs, who are arguing the Fed’s takeover was illegal! This of course, is unprecedented, but then he did it in a manner that only Goldman Sachs’ CEO Lloyd Blankfein can appreciate (note he, another lawyer and Harvard Law #1 in his class…under cross-exam by another Harvard Law #1, Sen. Carl Levin, turned into mincemeat yet nothing happened to Lloyd or Goldman except one lowly employee being held accountable). Alvarez mumbled, contradicted his own deposition (or at least is you could decipher what he said, that was what he did), and this under the questioning of David Boies, who frequently had to rephrase the question and insist on “yes, no, or I don’t recall” for an answer which Alvarez was incapable of doing…as stated earlier: he ain’t no dummy either!).
The point is that Janet Yellen has to throw this bum out if the Fed is to regain any of its credibility (sic). More on this next week…enjoy your weekend – you are on your own – literally!