Published late to focus on Vets NOT markets! TB
Quote of the Day from the Friars Club Encyclopedia of Jokes: “I once shook hands with Pat Boone and my whole right side sobered up.” – Dean Martin
Bloomberg Quote of the Day: “Great necessities call out great virtues.” – Abigail Adams…at least in her time they did and for the one percent of Americans who are protecting us, still do.
Bloomberg Top Stories:
*European Shares Advance as U.S. Stocks Fluctuate While Yen, Ruble Retreat
*Goldman Partners Profit From Private Investment Funds That Charge No Fees
*Poor Are Cut Off From Banks as U.S. Lags Behind Most Developed Economies – and Vets!
*Bond ETF’s $1 Billion Score in Single Day Shows Right Mix Found for Buyers
*IEX Reaches 1% Share of U.S. Trading Amid Quest to Blunt Speedy Strategies – a good thing!
*Alibaba Is Open to PayPal Cooperation as Singles’ Day Shopping Sets Record
*Swiss Franc Intervention Looms on UBS Radar as Exchange-Rate Cap Gets Near
*Obama’s Web Rules Seen Furthering $1.3 Trillion Connected-Device Industry
*Claren Road Losses a Result of Surprise High Volatility, Rubenstein Says – Surprise!
*OPEC’s Choice Is Retaining Price Power or Sales in New Oil Order
*Duke University’s Fuqua Captures Top Spot in 2014 Business-School Ranking – Fuqua you too!
*New York Ebola Patient Spencer Leaves Hospital After 20 Days of Treatment
*FCC Chair Thrown Under Bus with Obama’s Call for Strict Web Traffic Rules
Monday’s Market Summary
Another nothing day with all indices up from 0.2% (Dow) to 0.6% (Dow Utilities) EXCEPT Dow Transports which rose 1.3%! Volume lower, A/D’s and Breadth positive but nothing to shout about; new 52 week highs jumped to 368 while new lows fell back to 85. The VIX declined modestly but the main point it is closed below ‘13’ and is in bull territory: 12.67 -.45.
Volume should be light today due to the partial holiday (a disgrace…can’t we have one day off for our vets???).
Total NYSE Volume slightly lower again at 3.24B shares vs 3.45B 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 a weak 577M shares – lowest in weeks), 717M shares (lowest since 10/6!) vs 752M vs 796M vs 833M vs 794M vs 1.04B. For comparison purposes, for the prior 12 months it is a historically weak 711M shares…but since 10/1: 8528 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 slightly positive: NYSE: +1.3x vs +1.6x vs 1.3x vs +1.4x vs -1.8x; Nasdaq +1.6x vs -1.1x vs +1.4x vs +1.1x vs -1.3x. Breadth was similar: NYSE +1.1x vs +1.9x vs +1.4x vs +1.7x vs -2.3x; Nasdaq +1.4x vs +1.1x vs +1.5x vs +1.4x vs -1.2x. New 52 Week Highs rose to 368 vs 313 vs 328 vs 390 vs 316 vs 416 vs 612 – their range for the year is 39-612!!! New Lows sharply lower at 85 vs 114 vs 145 vs 155 vs 155. The 2014 range is 24-1043!!! S&P VIX closed lower for a 2nd day at 12.67 -.45 and closed a gap from 9/19/-9/22 and its 10th sub-15 close since peaking on 10/15. Back in bull territory from those bearish extremes that had a high of 31.06 (highest since 11/28/11!!!). The range was 12.38-13.25….just 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 weak giving back Friday’s gains and more. The recent 12 month low yields (10’s 2.09%; 30’s 2.87%; and long TIP 0.83%), 10’s closed at 2.36% -9/16; 30’s 3.09% +1-3/4; and the long TIP 0.97% -1-1/2. Overnight – closed for Vets Day: 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 little changed and mixed – Japan higher! (Benchmark is 10yr): Germany 0.83% –; UK 2.22% +2; France 1.18% +1; Italy 2.33% -3; Spain 2.09% -2; Portugal 3.17% -5; Greece 7.88% +2. 10/16’s close was 8.54%! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.48% +4!
Gold had a gave back over a third of Friday’s gain on Monday closing at $1159.80 -$10.00 in an ‘inside’ session following Friday’s surprise rally to $1176.70 culminating in a positive key reversal (session low was $1130.40, a new recent low!), 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 $1213, the 50 day $1220, then the 200 day at $1288, 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! Overnight weaker at $1155.10 -$4.70. Silver remains weak but in mid-15’s following 11/5’s low of $15.12, more than a five year low, but with the positive key reversal (higher high, lower low, and close above prior day’s high), that should be at least a near-term floor.
Crude closed lower again making Friday’s $78.65 an outlier, closing at $77.40 -$1.15, and struggling following 10/31’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 ($85.77), then the 50 day ($87.24), and lastly the 200 day (97.67), all plunging and accelerating to the downside. The range is now $75.84-$112.24 since 3/1/12. Overnight it is weaker again at $76.98 -.42 with a low of $76.42.
Global equities higher: UK +0.2% vs +0.5% vs +0.3% vs -0.1% vs +1.1%; France +0.7% vs +0.3% vs -0.9% vs -0.3% vs +1.6%; Germany +0.4% vs +0.3% vs -0.7% vs -0.2% vs +1.7%; Japan +2.1%!!! vs -0.6% vs +0.5% vs -0.9% vs +0.4% vs +2.7%!!! vs closed vs +4.8%!!! Hang Seng +0.3% vs +0.8% vs -0.4% vs -0.2% vs -0.6%; Korea +0.2% vs +1%! vs +0.2% vs +0.3% vs -0.2% vs -0.9%; India +0.1% vs flat vs -0.2% vs closed vs +0.2% vs – vs -0.1% vs +1.9%. U.S. equity futures were slightly weaker: Dow -18 (range 72!?!); SPX -0.60 (7); NDQ -2.25 (18).
Current Market: Dpw +15; Dow Transports +20; S&P 500 +2.38; Nasdaq Comp +3.75; 100 +4.59; Russell 2000 +0.50.
Some random thoughts on Veterans Day:
“Without heroes, we are all plain people and don’t know how far we can go.” – Bernard Malamud
…today’s title and commentary is meant as a tribute to those who serve and have served. A play on the title of Ernest Hemingway’s book, and later movie, To Have and Have Not.
Our great country, the first ever to be ‘of the people, by the people, and for the people’, was created by self-sacrifice. Sadly, ‘we’ have forgotten what that means. As Howard Schultz and Rajiv Chandrasekaran remind us in their recently released collaboration, For Love of Country: What Our Veterans Can Teach Us About Citizenship, Heroism, and Sacrifice, there are many ways to ‘serve’.
The first part of their book is devoted to stories of heroism, heroism isn’t something you do, it is something instilled in you. Some of these heroes didn’t know this but for love of their comrades they took risks and paid dearly, yet they don’t consider themselves heroes, they just did what they had to do. That is true love of one’s fellow man. It was touching and painful to read.
The second part focuses on what people can do to help our heroes, through fundraising, and working with our veterans either directly or fighting for their rights…often giving up lucrative job opportunities to fight for them or taking time from their own families. This left me on a very ‘uplifted’ note, and wishing I had done more…and now aware that I can do more.
Viet Nam was a great national tragedy. It was a war for ‘selfish’ reasons: to stop the Red Peril, and it brought out the worst in our government, the best in those who accepted their service, and even those who protested as I, a vet of that conflict, was to learn after the fact. Like veterans of the Korean conflict, we returned home not to ‘thank you for your service’ but to derision. Sure I fought, but from the relative safety of my ship, while several of my high school classmates died believing they were protecting our country and fighting for the freedom of another country.
The biggest problem facing our country is our government and those in it who believe they are doing ‘public service’ – first, most of them, and even their sons and daughters, have never served in the armed forces. They have the gall to use the threat of war for political purposes…to put us in conflicts yet again, on false claims of risk to our national security (ISIL is not one of those false claims yet it too is being used for political gain as Sen. Cruz and Sen. Paul are declaring that it is an ‘illegal act’ by President Obama to engage. It is a fine line but if we are to prevent any president from acting – without committing troops to combat – until Congress can act, then pity us. That is what is destroying us – not from the outside, but from within.
Yet, young people continue to volunteer, for any number of reasons: to do the right thing; to do something that will benefit them by getting a college education and thus a better life after (there is nothing wrong with this as a reason given the risks that one assumes in doing so, and of course family tradition which is becoming less and less common due to the number of Americans who have never served, breaking the chain of veterans in a family.
As voters, we deserve the government we get…or do we? If the wealthiest of Americans flood the airwaves with negative advertising (thank you Supreme Court!), misinformation, and worse, disinformation, how are people supposed to decide when the real candidates have trouble buying time to state their views? The game gets worse as one party tries to limit voters on the pretext of fraud, and the other tries to recruit the uninformed.
Back to those ‘public servants’ who spend the most of their time ‘dialing for dollars’ and once you accept money, you are obligated to do their bidding, be they banks, farmers, or wealthy people who call themselves ‘libertarians’. How did we ever decide to give them retirement compensation. It was never considered that elected officials would remain in office for the rest of their useful lifes (and more!), and that was the beauty of two-year terms in the House and six-year terms in the Senate. They were then ‘supposed’ to go back home and thus not lose touch with the voters. Lose touch with voters? Not a problem when you are inside the Beltway.
Hopefully, you see TB’s point: no country can continue on the path we are going and prosper, or for that matter survive. We are already the first generation (and second?) to leave our kids worse off than ourselves…yes, those who grew up in the Great Depression were the ‘greatest generation’. They knew what sacrifice was and put country above themselves.
Agree or not, please spend some time reflecting on the meaning of service, responsibility, and heroism…not just today but always. As Howard Schultz observed, it is “disrespectful” to see Veterans Day “turned into a four day sale”.
Thank you for reading!