11/17/14….stocks and oligarchs

Quote of the Day from the Friars Club Encyclopedia of Jokes: “Wives are people who feel they don’t dance enough.” – Groucho Marx
Bloomberg Quote of the Day: “Color is my day-long obsession, joy and torment.”
– Claude Monet

Bloomberg Top Stories:
*Halliburton Agrees to Acquire Baker Hughes in $34.6 Billion Transaction. – do they watch crude?
*S&P 500 Index Futures Fall With Crude Oil on Growth Concern as Bonds Climb – see above!
– HELLO!!!
*Japan Unexpectedly Sinks Into Recession as Abe Weighs Tax Delay, Election
*World’s Biggest Wealth Fund Outsmarts Flash Boys as Algorithms Abandoned – follow this!
*Doctor Dies of Ebola in Nebraska After Contracting Virus in Sierra Leone
*Draghi Seen Bypassing Quantatative Easing Qualms to Hit Balance-Sheet Goal
*Pfizer’s Cancer Accord With Merck KGaA May Show Waning AstraZeneca Pursuit
*EU to Blacklist More Ukraine Separatists, Skip wider Sanctions on Russia
*Big Oil Mergers Are Back as Halliburton Makes First Move – and the beat goes on…
*Volvo Said to Be Close to Deal With DHL to Deliver Packages to Parked Cars
*Oil Rout Liberating S&P 500 From Energy Influence as Tech Stocks Reach 20% -see comments
*Mounting Pressure on OPEC Spurs More Wagers on a Crude-Oil Rebound – worth a shot here!
*Russia Seen as Greatest Threat in Global Poll as Oil Erodes Putin’s Power
*London Homebuyers Vanish as Surging Property Prices Outpace Wage Growth
*Money Flows Into Emerging Market ETFs Slide 80% as Investors Avoid China – !!!
*Tax-Break Arms Race Across U.S. Spurs Push to Disclose Deals
*Drugmakers Racing to Get Frozen Ebola Vaccine to Coolers, Kerosene Fridges
*Scott Navigates Republican Climate Politics as Rising Seas Menace Florida

Friday’s Market Summary

Beats TB! The VIX declining in a session that ranged from -0.3% to +0.2%…it had traded as high as 14.15, was 13.55 just before the close and then settled at 13.31 – the session low? Could it be due to options expiry this Friday?…could well be! Volume was a weak of late 3.2B shares and just 705M on the NYSE floor. A/D’s and Breadth were of no consequence but mostly slight positives. New 52 week highs continued their slide to 207 as did new lows to 127 (about average). Financials were weak especially bank stocks. BofA 5th most active -0.5% and could break $17.

Total NYSE Volume fell back to 3.2B shares vs 3.46B vs 3.25B vs 2.93B vs 3.24B. Average volume since 9/30 is about 3.7B shares but now falling, or about 700M more than the 12-month average. Shares traded on the NYSE floor – affectionately referred to by TB as REAL volume steady for a second day at 705M shares vs 708M vs 718M vs 614M (lowest since 9/15),vs 717M – still trending lower. For comparison purposes, for the prior 12 months it is a historically weak 712M shares…but since 10/1: 832B shares (and falling) – 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 minimal and mixed: NYSE: +1.1x vs -1.8x vs +1.2x vs +1.1x vs +1.3x; Nasdaq -1.1x vs -2x vs +1.6x vs -1.1x vs +1.6x. Breadth was slightly positive: NYSE +1.5x vs -2x vs 1:1 vs +1.1x vs +1.1x; Nasdaq +1.4x vs -1.2x vs +1.6x vs +1.1x vs +1.4x. New 52 Week Highs sharply lower again to 207 vs 249 vs 276 vs 339 vs 368 – their range for the year is 39-612!!! New Lows fell back to 127 vs 146 vs 113 vs 100 vs 85. The 2014 range is 24-1043!!! S&P VIX declined but remains in bear territory at 13.31 -.48 with a range of 13.31 (due to call buying at the end of the session which pushed it down from 13.55 near the bell, and a high of 14.15. Friday is another options expiry…heed! This is its 14th sub-15 close since peaking on 10/15. Heading back toward those bearish extremes that had a high of 31.06 (highest since 11/28/11!!!)? you decide. 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 higher. The recent 12 month low yields (10’s 2.09%; 30’s 2.87%; and long TIP 0.83%), 10’s closed at 2.32% +3/16; 30’s 3.04% +7/16; and the long TIP 0.97%! +5/8. Overnight still rallying but well off session highs: 10’s 2.31% +1/8; 30’s 3.03% +5/16; and long TIP 0.97% +1/4.
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 0.09-0.10%. T-Bills still acting screwy: 0.04%, one-month, 0.01% 3 mos, 0.14% +.04 one year???
Foreign bond yields mixed (Benchmark is 10yr): Germany 0.78% –; UK 2.08% -4; France 1.15% +1; Italy 2.35% –; Spain 2.13% +2; Portugal 3.17% +1; Greece 7.88% +5. 10/16’s close was 8.54%! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.48% –.

Gold closed strong at $1185.60 +$24.10! Session high was $1192.90 – highest since 10/31 AND a ‘positive key reversal for 2nd time in six sessions. 11/7’s low was $1130.40, a new recent low!). The recent intraday high of $1255.60, highest since 9/10/14, was rejected. The last 13 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 $1207, the 50 day $1213, then the 200 day at $1279, 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, it is slightly higher at $1187.20 +$1.60 with a session high of $1193.60! Silver also broke out rising to $16.38, highest since 10/31 and has been as high as $16.46 overnight! This following 5 straight ‘lower highs’ taking it to the low-15’s and near 11/5’s low of $15.12, more than a five year low.

Crude traded down to $73.25 before coming back to close at $75.82 +$1.61 a day after setting a new recent low of $74.07, lowest since 9/17/10!!! 10/25’s high was $84.83. There have now been 33!!! 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 ($84.03), then the 50 day ($85.82), and lastly the 200 day (97.25), all continuing to plunge and accelerating to the downside. If it fails here we are now looking at $70! The recent range is now $74.07-$112.24 since 3/1/12. Overnight it is slightly weaker at $75.12 -.71.

European equities little changed, Asia weak! UK -0.1% vs -0.1% vs -0.1% vs -0.4% vs +0.2%; France – vs +0.4% vs -0.4% vs -1.1% vs +0.7%; Germany – vs +0.1% vs -0.2% vs -1.3% vs +0.4%; Japan -3%!!! vs +0.6% vs +1.1%! vs +0.5% vs +2.1%!!!; Hang Seng -1.2%! vs +0.3% vs +0.3% vs +0.8% vs +0.3%; Korea -0.1% vs -0.8% vs -0.3% vs +0.2% vs +0.2%; India +0.5% vs +0.4% vs -0.2% vs +0.4% vs +0.1%. U.S. equity futures weaker after ‘gapping down’: DOW -34 (range 62 plus 63 on gap!); SPX +2 (6!); NDQ +4 (9!).
Some random thoughts:

…anyone remember Jonathan Clements, who wrote for the WSJ? He has been back writing for the Sunday edition and yesterday’s column boldly stated how the stock market is overvalued and desperately in need of a 25% correction to provide value. Here is the link to his article and rationale: Clements: why-we-need-stock-prices-to-fall-25%
(Note if they did decline 20-25% you could safely convert your IRA/401(k) to a Roth – if you have the cash to do it! TB)

Lastly, Moyers & Co. had Lawrence Lessig on again along with Zepher Teachout (I kid you not). Lessig has been mentioned in this blog before and is a well-respected lawyer, professor and ethics expert (didn’t know lawyers ever took that course…especially conflicts of interest).
Teachout ran against Cuomo for governor of New York, and while she was soundly defeated she garnered 35% of the vote in the primary scaring him out of his wits! How dare she!
Their fight is against the oligarchs who not only ‘buy’ the elections but determine who their candidate will be before you even have a chance to express your opinon – or vote. Perhaps mom and pop still have a chance…after all, the Tea Party (with the help of the Koch brothers, however), did make it rough for them. Here is the link: Moyers and Lessig and Teachout

That’s enough for one day to digest…enjoy (if you can!),

TB

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