Quote of the Day from the Friars Club Encyclopedia of Jokes: “I used up all my sick days so I’m calling in dead.” – anon
Bloomberg Quote of the Day: “Both following and leading are skills to be learned.” – David Zane Fleisher…note he said ‘both’! TB
Bloomberg Top Stories:
*Russia Sees First Recession Since -09 as Oil Plunge Compounds Sanctions-self-inflicted
*European Stocks Follow China Higher as Ruble Weakens While Oil, Gold Fall – wait China is only gaining back half of what it lost Monday! Gold still holding on to 12/1 gain
*Draghi Treads Path of ECB Powerlessness Toward QE Without Economy Overhaul !!!
*General Motors November U.S. Sales Gain of 6.5% Surpasses 2.6% Estimate – don’t buy presents…buy a new car!
*European Banks Seen Afflicted by $82 Billion Capital Gap in Leverage Test – !!!
*Carter Said to Be Obama’s Choice as Defense Secretary – Ashton not Jimmy!
*Oil Investors Risk Being Left Stranded by Swing to Tougher Climate Rules – aww!
*Saudi-Venezuela Split Revealed Behind Closed Doors as OPEC Emerges Divided – 8 countries led by Venezuela voted to reduce; Saudi’s and 3 others to maintain! NOTE: a cut requires a ‘unanimous’ vote!?!
*Bond Investors Funding Shale Boom Face $8.5 Billion Losses on Junk Debt – EGAD
*Online Consumers Stretch U.S. Holiday Shopping Season Beyond Cyber Monday – ugh!
*Andurand Hedge Fund Is Said to Expand 18% During Oil Plunge
*BlackRock’s Vecht Says Falling Oil Prices Leave Many Portfolios Outdated – and long!
*Israel Early Elections Seen Hurting War-Torn Economy as Overhauls Halted
*Houston Stadium Debt Misfire Spurs $689 Million Bond Overhaul – oops!
Monday’s Market Summary
What a difference a day makes! Bonds had a great rally on Friday – reversed yesterday! Gold plunged $34 on Friday to it low since 11/14 – yesterday hit a new low of $1141.70 the climbed to $1220.40 a HUGE ‘key reversal’ that partially closed a gap to the 10/29 low: $1226.40 before settling up $42.60!!! Crude continued on its downward trajectory with a new 5-year low of $63.72 before closing at $69.00 +$2.85, but with a ‘lower high as well as a ‘lower low.’ What about stocks? Thought you would never ask…and ugly day where a 0.1% gain for Dow Utilities took honors, the only index in the black: Worst was Dow Transports -2.7%!!!, followed by the Russell 2000 -1.6%, the two Nasdaq’s (-1.3% and 1.1% respectively)! S&P 500 was off 0.7% and the Dow 30 lost 0.3%. Ugly!!! A/D’s and Breadth were ‘super’ negative, new 52 week highs plunged back to 201 from a huge 515! New lows nearly doubled from a strong 276 to 447!!! Oh yeah, all this was validated huge volume of 4.14B shares (on the first of the month???) and by the S&P VIX which closed in very bearish territory at 14.29 +.96! Still long? Hmmmm…kind of a ‘cyber Monday’, no?
Total NYSE Volume exploded to 4.14B shares vs 2.5B vs 2.73B vs 3.36B vs 3.1B. Average volume since 9/30 is about 3.6B shares or about 600M more than the 12-month average. Shares traded on the NYSE floor (aka REAL) also rose sharply to 877M shares vs 649M shares (lowest since 11/11 and unusual for a monthend) vs 700M vs 846M – the ONLY 800+ session of Nov. – vs 707M vs 1.04B, highest since 10/31. For comparison purposes, for the prior 12 months it is a historically weak 717M shares…but since 10/1: 816B 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 11/1’s 619M share session. April 30 – September 30 we had just SEVEN 800M shares…since 10/1: 17 – just one in Nov, and FIVE 900M+ days. Add one 800M day for 12/1. A/D’s were highly negative: NYSE: -3.5x vs -1.6x vs +1.6x vs +1.2x vs +1.6x; Nasdaq -3.5x vs -2x vs +1.6x vs 1:1 vs +2.4x. Breadth was even worse: NYSE -3.8x!!! vs -2.4x! vs +1.3x vs -1.1x vs +1.1x; Nasdaq -4.7x!!! vs -1.1x vs +2.2x vs +1.1x vs +3.1x! New 52 Week Highs more than reversed to 201! vs 515! vs 321 vs 296 vs 280 – their range for the year is 39-612!!! New Lows were VERY BEARISH at 447!!! vs 276 vs 84 vs 80 vs 68. The 2014 range is 24-1043!!! S&P VIX ranged from 13.94-14.75, befoe closing at 14.29 +.96!!! Kiss ’12’ and 13’ goodbye! This six days after hitting a very bearish 15.74, highest since 11/4! Now well back in those bearish extremes that had a high of 31.06 (highest since 11/28/11!!!). The average of the past 12 months is 14.00, with a low of 10.28!…high close of 26.25 on 10/15/14! Friday is the payrolls report and a lot of data in between!
U.S. bond market closed WEAK totally reversing Friday’s STRONG session?!? The recent 12 month low yields (10’s 2.09%; 30’s 2.87%; and long TIP 0.83%), 10’s closed at 2.23% vs 2.16% -5/8; 30’s 2.96% vs 2.89% -1-1/2!, and the long TIP 0.96% vs 0.90% -1-1/2! Overnight weaker: 10’s 2.26% -3/16; 30’s 2.98% -1/4; and long TIP 0.97% -5/16. Can you ‘splain it, Lucy??? Libor update: 0.234% 3 mos.; 0.326% 6 mos. – still near their new record lows! The Fed Funds rate has averaged 0.09% and is currently 0.11-0.13%. T-Bills: 0.02% one-month, 0.02%! 3 mos, 0.11% one year.
Foreign bond yields higher except Greece which is sharply lower for a 2nd day after being hammered (Benchmark is 10yr): Germany 0.74% +1; UK 1.97%! vs 1.89%! +7!; France 1.01% vs 0.97% +2; Italy 2.01% –; Spain 1.85% +2; Portugal 2.80% -1; Greece 7.59%! -22 vs 7.85%! -28!!! 10/16’s close was 8.54%! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.41% –.
Gold was slammed early in the session falling to $1141.70 before turning dramatically and creating a HUGE ‘key reversal’ with a high of $1220.40 that almost closed a gap going back to 10/28 ($1226.40) and closed at $1218.10 +$42.60!!! – highest since 10/28 and only the 2nd time above the 40/50 day since 10/21! 11/7’s low was $1130.40, a new 12-month low!). The last 23 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/Sup is at $1200 (psych), then the 40 day at $1202, the 50 day $1204, then the 200 day at $1275. The 12-month high is $1392.60 on 3/17, highest high since 9/4/13. 11/7’s low was $1130.40! Overnight SHARPLY lower again with a session low of $1191.40?!?, and is currently $1200.30 -$17.80?!? There have now been just 7 highs above $1200 since 10/31. Silver also plunged to $14.15 yesterday before bouncing and is currently $16.32 -.37?!? Wednesday’s high close was $16.61! 12/1’s low was $14.12, more than a five year low. CRAZY and crazy if you think you can outguess it…not another ‘Libor’?
Crude continued to freefall, bottoming out a $63.72 – a new five year plus low (6/2010)! It then came back but with a ‘lower high’ before closing at $69.00 +$2.85? lowest since June 2010! Friday’s session high was $77.83. 7 days ago it set a new recent low of $74.07, lowest since 9/17/10!!! 10/25’s high was $84.83. There have been 43!!! 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 ($79.45!), then the 50 day ($81.95!), and lastly the 200 day (95.98!), all increasing their rate of decline! A failure here could take us to $59!!! The recent range is now $63.72-$112.24 since 3/1/12. Overnight it is volatile wth a range of $69.32-66.54, and is currently $68.04 -.96! Note that following the financial crisis it traded down to $32.40 on 12/31/08 from a high of $147.27 just three months earlier (-78%!!!).
Global equities mostly higher, led by UK?, Japan up for a 3rd session! Hong Kong recovering; India weaker: UK +1.2% vs -0.9% vs -0.2% vs +0.2% vs +0.3%; France +0.3% vs –0.3% vs -0.3% vs -0.1% vs +1.4%; Germany – vs –0.2% vs -0.1% vs +0.6% vs +1.4%; Japan +0.4% vs +0.8% vs +1.2% vs -0.1% vs +0.3%; Hang Seng +1.2% vs -2.6%!!! vs -0.1% vs +1.2% vs -0.2% vs +2%; Korea – vs -0.8% vs -0.1% vs – vs +0.1%; India -0.4% vs -0.5% vs +0.9% vs +0.2% vs -0.6%. U.S. equity futures somewhat higher: DOW +27 (range 80); SPX +2.50 (8); NDQ +8.25 (16). Could be an interesting day!
Some random thoughts:
…to those of you who said, ‘Aha! TB’s a Democrat’, think again. The Dems have done their own damage but on a much smaller scale than the GOP.
Sadly, they had a chance for change and blew it…in fact, Obama ran on doing just that but then got caught up in healthcare: he won…but at what cost? (Don’t count on his stand on immigration hurting the Dems though). Many of those who voted for him saw him as our last ‘great white/black hope’ – TB included. As for his management skill, is it likely that three Defense secretaries all said they were ‘out of the loop’ as he ran policy with his group of insiders (cronies?). In case you missed it, here is a link to Charlie Rose’s interview of Secretary Hagel – just before he was canned. You decide if he was incompetent: Charlie Rose/Hagel. Also note that yesterday, the FBI said that ISIS is a threat in the U.S. NOW! …isn’t that what Obama got mad at him for suggesting? Yep!
As for the ‘Citizens United’ decision, while there are some Dem PACS they are dwarfed by those run by the GOP (Rove/Koch Brothers, etc). The IRS scandal was about a ridiculous as the GOP constant attacks on Benghazi: if you have a huge number of conservative PAC’s doesn’t it stand to reason you will have more inquiries into them?
As for the success of the PAC’s, consider that for all their billions, Koch brothers got six elected and Rove followed with 5…at what cost? The Senate race in North Carolina cost $100 MILLION…governor of Oklahoma $130 MILLION, both records…and shameful.
Why aren’t people voting? Because by the time a name gets on the primary ballot the outcome is assured…with a good chance of them winning in the primary if they have the PAC money behind them. Why aren’t we up in arms about the ‘selling’ of America (selling out?)? We are well on our way to a plutocracy and with a wealth gap that is the worst since before the Great Recession.
Didn’t any of you question how Mitt Romney got $101 million in his 401(k)? Well, did ya? Turns out he is one of a ‘select group’ – mostly Wall Street types who have an ‘edge’ that shouldn’t be and finally the IRS and Congress (one can hope) are doing something about it. Before a company goes public and share price is say $0.00125 a share, they buy the shares before the IPO and put them in their 401(k), thus avoiding taxes for years (if ever). That’s how they do it! IRA’s were created in 1974 and followed with 401(k)’s in 1978 and designed for the worker. Instead, it helped senior management and precipitated the move to stock options and grants over cash bonuses. It is a travesty. Note also that the ‘carried interest’ provision which allows ordinary income of hedge fund operators to get capital gains tax rates…thus avoiding payroll taxes and Medicare.
We have become a nation, of the wealthy, by the wealthy, and for the wealthy, and if that is not changed soon (and it sure won’t be with a GOP-controlled Congress), we will go the way of all the past leaders of the ‘world order’ – and deservedly so. Jefferson: your ‘great experiment’ is in danger of failing.
As stated earlier, TB is NOT a democrat. Watch this episode of Moyers & Co. to see the evils that ‘some’ Democrat politicians are allowing: Moyers/plutocracy
Note that the ‘special’ taxation of NYC High Rise Condos (only the new ‘monsters that cost from $10-30 million – each get), was ‘bought and paid for by campaign contributions – right before the last gubernatorial election. Prior to that Gov. Andrew Cuomo had created a commission on corruption with carte blanche to investigate any area of state government. BUT just before the election…less than a week…he received contributions from condo developers to sign a law which would reduce a $200,000 tax on one of these $20 million condos – one, not the entire building – to $20,000! When the commission decided to investigate the governor’s office – Cuomo disbanded it! Now THAT’s chutzpah!
Republicans? Feel better now? …or just as digusted as TB is?
God Bless America…please!