11/10/14 – winners and losers…including us!

Quote of the Day from the Friars Club Encyclopedia of Jokes: “A friend of mine willed her body to science, but science is contesting the will.” – Joey Adams

Bloomberg Quote of the Day: “Too much of a good thing can be wonderful.” – Mae West

This week’s economic calendar is fairly light. The highlight of the week will be the October Retail Sales (Friday). We will also get September Wholesale Trade (Wednesday), September JOLTs Job Openings and October Treasury Budget (Thursday), October Import & Export Prices, November Consumer Sentiment Preliminary and September Business Inventories (Friday). Courtesy of Economic Data Service

Bloomberg Top Stories:

*Russia Sees Stagnation Amid Sanctions as Ruble Rallies on Vow of Support – from record low!

*Dollar Weakens as Emerging-Market Stocks Advance With Natural Gas, Ruble

*Macro Hedge Funds That Lamented Boring Markets Suffer Worst Month of Year! HAH!!!

*Great Crash Predictors See 65% Chance of 2015 Recession With Levy Model – count TB in!

*McDonald’s October Same-Store Sales Top Estimates After U.S. Declines Slow – yawn

*Global Banks Face 25% Loss-Buffer Rule as Regulators Fight Too-Big-to-Fail – they should!

*Failed Hedging Positions by bankrupt OW Bunker Provoke Investor Rebuke – oh oh…

*Russia Business Hits Global Companies Suffering Ruble Shrinking to Record Low

*Canadian Hedge Funds Morphing Into Bond Dealers in Post-Crisis Market

*Pink Floyd’s Weekend Wasn’t Quite as good as New York Jets – but Niner’s beat Saints!

*Ma Says Alibaba Shareholders Should ‘Feel the Love’ After Disappointments – he should!

*Xi Meets Abe as Pragmatism Returns to Relations Frayed by Territorial Spat – some bedfellows!

*Ukrainian Rebel Leader Purgin Meets Russian Senators as Fighting Flares

*First Abe-Putin Summit in Eight Months Yields Pledge on Better Relations – making nice?

*Rajoy’s Legal defenses Breached as Mas Unleashes Catalan Independence Vot

Friday’s Market Summary:

Looks like the October Payrolls rally came early – like the day before! As a result EVERY major index closed +/-0.1%??? Oh, forgot again: Dow Utilities rose 0.9% in what was a very volatile week for it! Huge swings but at the end of the day…er, for the week…it was UP 1%, along with the Dow! Dow Transports gained 2.1% on the week; S&P 500 +0.5%; the two Nasdaqs -0.1% and flat; and the Russell 2000 off 0.3%. Hmmm. As for those payrolls sure they looked good for the past four months but are tapering, but that isn’t the point: while jobs are being created, anyone working over 35 hours is considered a full-time job…but in some (many?) instances that can mean three jobs with no benefits so the data is highly suspect and even questionable. Productivity gains are being on the backs of labor where incomes are up just 0.3% for the past 12 months. You want to jumpstart the economy? Pay people more…got that Waltons?  

Total NYSE Volume slipped again to 3.45B shares vs 3.6B vs 3.76B vs 3.92B vs 3.53B vs 4.26B (monthend!): Average volume since 9/30 is about 3.7B shares, or about 700M more than the 12-month average. Shares traded on the NYSE floor – affectionately referred to by TB as REAL volume slightly higher (but volume at the closing bell was just 610M shares – lowest of the week), vs 752M shares vs 796M vs 833M vs 794M vs 1.04B. For comparison purposes, for the prior 12 months it is a historically weak 713M shares…but since 10/1: 8578 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 mixed: NYSE: +1.6x vs 1.3x vs +1.4x vs -1.8x v -1.1x vs +3.3x; Nasdaq -1.1x vs +1.4x vs +1.1x vs -1.3x vs -1.2x vs +2.3x. Breadth was somewhat positive: NYSE +1.9x vs +1.4x vs +1.7x vs -2.3x vs -1.1x vs +4x! Nasdaq +1.1x vs +1.5x vs +1.4x vs -1.2x vs +1.4x vs +3.3x! New 52 Week Highs slightly lower at 313 vs 328 vs 390 vs 316 vs 416 vs 612 – their range for the year is now 39-612!!! New Lows also lower at 114 vs 145 vs 155 vs 155 vs 94 vs 137. The 2014 range is 24-1043!!! S&P VIX closed lower (on a nothing day???) at 13.12 -.55 for its 9th 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 almost made it to a ‘12’ handle: 13.01-14.16. Remains slightly bearish and well above 9/18’s 12.03 low close. The average of the past 12 months is 13.97, with a low of 10.28!…high close of 26.25 on 10/15/14!

U.S. bond market closed strong, wiping out the losses of the week. The recent 12 month low yields (10’s 2.09%; 30’s 2.87%; and long TIP 0.83%), 10’s closed at 2.29% +3/4; 30’s 3.03% +1-3/8; and the long TIP 0.92% +1-3/4!!! So much for those payrolls??? Overnight little changed: 10’s 2.29% +1/16; 30’s 3.03% -1/32; and long TIP 0.91% +1/32. QE’s may end, but dump $4.3 trillion???…is there an App for that?  

Libor update: 0.233% 3 mos.; 0.327% 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 lower continuing Friday’s late rally, ex-Greece – slightly (Benchmark is 10yr): Germany 0.81% -1; UK 2.17% -3; France 1.17% -1; Italy 2.34% -3; Spain 2.12% -3; Portugal 3.22% -3; Greece 7.83% +2. 10/16’s close was 8.54%! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.45% -3.

Gold had a surprise rally surging to $1176.70 and a positive key reversal (session low was $1130.40, a new recent low!) before closing at $1169.80 +$27.20!!!, a day after its lowest close since 3/14/14. The recent intraday high of $1255.60, highest since 9/10/14, was rejected. The last 9 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 $1215, the 50 day $1223, then the 200 day at $1281, all declining. The 12-month high is $1392.60 on 3/17, highest high since 9/4/13. $1130.40. 11/7’s low was $1130.40! Silver also closed higher but failed to reach even $16 and remains weak and with 11/5’s low of $15.12 holding, more than a five year low. But the positive key reversal (higher high, lower low, and close above prior day’s high should set at least a near-term floor.

Crude closed higher at $78.65 +.74, negating a week of losses with higher lows following last Monday’s intraday low of $75.84, lowest since 10/14/11!!! 10/25’s high was $84.83. There have been 32!!! handles since peaking at $107.73 on June 13th, highest since 9/19/13. 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 ($86.16), then the 50 day ($87.61), and lastly the 200 day (97.77), all plunging and accelerating to the downside. The range is now $75.84-$112.24 since 3/1/12. Overnight it is higher at $79.63 +.98 with a high of $79.85.

European equities higher, Asia mixed: UK +0.5% vs +0.3% vs -0.1% vs +1.1% vs -0.6% vs +1.1%; France +0.3% vs -0.9% vs -0.3% vs +1.6% vs -0.6% vs +2.3%; Germany +0.3% vs -0.7% vs -0.2% vs +1.7% vs -0.6% vs +2.1%; Japan -0.6% vs +0.5% vs -0.9% vs +0.4% vs +2.7%!!! vs closed vs +4.8%!!! Hang Seng +0.8% vs -0.4% vs -0.2% vs -0.6% vs -0.3% vs -0.3% vs +1.3%; Korea +1%! vs +0.2% vs +0.3% vs -0.2% vs -0.9%; India flat vs -0.2% vs closed vs +0.2% vs – vs -0.1% vs +1.9%. U.S. equity futures slightly higher and waffling: Dow +15 (range 58); SPX +2.10 (9); NDQ +9.25 (8!).


Some random thoughts:

…oh yes, there was a winner…but not the GOP which now has the largest majority in the House since Herbert Hoover (how’s that for a bad omen?). No sir, the winner was Karl Rove whose PAC (American Crossroads – how appropriate!), won six congressional seats! Followed closely by…the Koch Brothers PAC (American’s for Prosperity – whose???), with five. This is a dark day for America…precipitated by an ultra-conservative Supreme Court that feels any individual or corporation may spend as much as they want – anywhere – period! Now we are going to get a chance to see just how conservative (reactionary?) they can be if they take on the challenge to the ACA, and rule it invalid. We are seeing the destruction as a country ‘of the people, by the people, and for the people’ and being replaced with ‘of the richest, by the richest, for the richest’ and that is truly a pity…this 238 years after the Declaration of Independence…and the longest run of any country. It is up to you…and me…to stop this. We are truly on ‘the road to serfdom’ – not the way Frederik von Hayek saw it either!

The worst part of the Citizens United decision is that it only allows ‘informational’ ads without naming the candidate it is for…thus it is entirely negative ads (which eat up air time for the candidates themselves), aimed at the opponent of THEIR candidate. ‘Most’ of these ads have a snippet of truth (misinformation), and many provide ‘disinformation’ that only the former Soviet Union could be proud of.

The Koch brothers with a combined net worth of $84 billion rank as the 4th richest Americans and are determined to give libertarians a bad name. Interestingly, Karl Rove made it on his own and has an estimated net worth of ‘just $6.6 million (not a billionaire), but that’s coming from nothing. Guess we can call that ‘free enterprise’ and quite ‘Christian’.

FYI, six members of the Walton family are on the list of wealthiest Americans, which is headed by Bill Gates at $76 billion but who chooses to do good for humanity with his billions, but if you combine the six, their combined net worth of $114.5 billion! Some say, don’t blame them, the Walton’s took a good idea and ran with it…no, suckers…Sam Walton did that…these are leeches! Not only are they the wealthiest family in America, each year they earn (sic) more than the bottom 40% of Americans combined! …and again, WE, the people are subsidizing them by paying their employee’s health insurance AND providing food stamps. Is this a great country or what??? …or what!!!

Of course, the GOP is hell-bent on repealing the ACA…and ‘perhaps’ replacing it with ‘something better’ – but will they? First, they cannot override Obama’s veto, but they should shut up about that (if they want to win again in 2016…why is TB helping them???), and instead ‘fix’ what is wrong with it…something they have had the power to do for the last two years! They have never put one idea down on paper or even expressed it. They will see the wrath of the people if they are able to significantly change it. As for immigration reform…that too, they had better think hard about before the next election! Isn’t it odd that Republicans win in years with low turnouts? You don’t think that is why they are pushing for oppressive voter ID laws do you??? No, they couldn’t.

Then there is the ‘master of denial’, Barrack Obama…are you having trouble seeing his ‘clothes’ too? The naked truth??? Wake up, and tell it like it is: you got your butt kicked…show it!

Well, TB got a lot off his chest this morning…during the first snowfall in the Twin Cities…not a bad one either. Have a great week!



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