Quote of the Day from the Friars Club Encyclopedia of Jokes: “I Hate to advocate drugs, alcohol, violence, or insanity to anyone, but they’ve always worked for me.” – Hunter S. Thompson – HE hates to advocate it???
Bloomberg Quote of the Day: “All men who have achieved great things have been great dreamers.” – Orisen Swett Marden – does he mean like Rip Van Winkle?
U.S. Non-Farm Payrolls rose in November by 321,000 (private +314,000, govt. +7,000), highest since January 2012 and well above the 230,000 median forecast! Additionally, September was revised upwards by 15k to 271k, and October +29k to 243k??? Hello??? Get this the report also praised the increase in wages of 0.4% – laudable, but for the 12-months? Up just 2.1%! Now get this? The Household survey increased by just 4,000!!! Over the past 3 months it increased by 719k vs the revised 835k total so not that different. Manufacturing added just 28k jobs – 60k for the three months! Construction? 20k and 45k! Services you ask…+266k and 687k!!! Most of those (86k/204k) were in Business Services (temporary help 23k/66k), Trade/Transportation (71k/175k), Retail (50k/114k). Education (38k/110k), Leisure/Hospitality (32k/134k). You don’t think a lot of those jobs are seasonal do you? FinancialServices just 20k/40k!
Unemployment Rate was steady at 5.8%? The Labor force grew by 119k in Nov. – 538k for the three months, but the Participation Rate was steady at 62.8% – just above a multi-decade low! The average work week was steady at 34.6 hours, up just 0.1% while Manufacturing hours increased to 41.1 +0.2 – overtime hours just 3.5 +0.1%. (note that none of these are above the 12-month high – none! No meaningful change in the number not in the labor force average still around 92,400. Now let’s look at the REAL unemployment rate: 11.4% vs 11.5% at low of range which is still 11.4-12.2%. Ugh!
Upshot? Sounds impressive but we are hardly making a dent…and for them to claim wage increases is a joke. Want to see wage increases? Pass the minimum wage increase!
Market Reaction (9am EST): Bond weaker with the long bond off 5/8; long TIP down 7/8. Commodities weaker; Dollar slightly higher. Stocks only slightly higher – not a good thing, right? Hmmm…time to head for the doors again…nothing to see here! TB
Bloomberg Top Stories:
*Payrolls in U.S. Increase by Most Since Early 2012 Amid Pickup (?) in Salaries – sure!
*Dollar Jumps a Treasuries Fall on U.S. Payroll Data; European Stocks Rise-BEFORE!
*Trade Gap in U.S. Little Changed in October as Imports, Exports Increase – but oil???
*New York City Throngs Lead Demonstrators in Police Protests Across US – surprised?
*ECB Said to Prepare QE Plan as Draghi Builds Support for January Meeting
*Russia Interest-Rate Increase Seen by Investors After Days of Ruble Buying – rubble?
*Ex-UBS Trader Darin Says He’s in ‘Kafkaesques Situation’ Amid Libor Probe – he is!
*Basel Regulators Fault EU for Deviations From International Bank Standard
*New York City Police Chokehold Evidence to Stay Secret as Protests Spread – idiots!
*Canadian Unemployment Fell in November Amid Declines in Service Industries – ?
*Deadliest Kashmir Attack This Year Kills 17 Before Modi Visit to the State – sad
*Bill Cosby Says Woman Who Sued for Molestation First Tried to Extort Him (isn’t that interesting from a man who paid off several women to keep quiet? Believe him?)
Thursday’s Market Summary
May the insanity in intransigence STOP HERE! Now! It could as we get the payrolls reports this morning (will be reported in the headlines section). It was up, down, all around yesterday but within very narrow ranges. Guess the worst performer? Russell 2000 small cap -0.5%…BUT next was the NDQ 100 FLAT! The rest? Something TB has never before witnessed: every index was down 0.1%! That should tell you a lot hinges on today’s payrolls reports, no?Volume slipped to a slightly below average 3.37B shares. Despite the ‘neutral’ day, A/D’s and Breadth were both negative? New 52 week highs down slightly to 302 but new lows jumped to a high 248! Now get this: the S&P VIX traded intraday as high as 13.21,plunged to 12.09 and closed LOWER at 12.41 -.06?
Total NYSE Volume dipped to a below average 3.37B shares vs 3.58B vs 3.64B vs 4.14B vs 2.5B. 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) actually rose to 798M shares (?) vs 776M vs 809M vs 877M (is that a trend?) vs 649M (lowest since 11/11 and unusual for a monthend). For comparison purposes, for the prior 12 months it is a historically weak 718M shares…but since 10/1: 815B 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: now at 19 – just one in Nov, and FIVE 900M+ days. Two 800M days for Dec.
A/D’s were negative…on a ‘neutral’ session? NYSE: -1.7x vs +1.8x vs +2x vs -3.5x vs -1.6x; Nasdaq -1.5x vs +1.6x vs +2.1x vs -3.5x vs -2x. Breadth was similar: NYSE -2.4x vs +2.4x vs +1.3x vs -3.8x!!! vs -2.4x; Nasdaq -1.5x vs +2.2x vs +2.1x vs -4.7x!!! vs -1.1x. New 52 Week Highs slipped to 302 vs 328 vs 197 vs 201! vs 515! – their range for the year is 39-612!!! New Lows increased to a high 248 vs 185 vs 253 vs 447!!! vs 276. The 2014 range is 24-1043!!! S&P VIX topped out at13.21 with a low of 12.09 before closing at 12.41 -.06? – leaving just one session without a ‘13’ print? Whats a mutthah to do? This 10 days after hitting a very bearish 15.74, highest since 11/4, and just 4 days ago 14.75! We may again see those bearish extremes that had a high of 31.06 (highest since 11/28/11!!!). 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! TODAY is the closely watched payrolls report! Stay tuned.
U.S. bond market closed up for a second session following two VERY WEAK sessions which more than reversed last 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 2.24% +3/8; 30’s 2.94% +15/16, and the long TIP 0.94% +1-3/16!. Overnight slightly weaker ahead of payrolls: 10’s 2.95% +1/16; 30’s 2.95% -1/4; and long TIP 0.95% -3/8.
Libor update: 0.235% 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% – a 9-month high. T-Bills: 0.02% one-month; 0.01%! 3 mos; 0.12% one year.
Foreign bond yields lower – especially the PIIGS (Benchmark is 10yr): Germany 0.76% -1; UK 1.97%! -1; France 1.01% -2; Italy 1.96%! -7!!!; Spain 1.82%! -7!!!; Portugal 2.72%! -6!; Greece 7.06%! -28!!! This vs 07.47%??? – WOW! Not for the faint of heart! 10/16’s close was 8.54%! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.41% -2.
Gold had another ‘inside session’ making it 3 in a row for all intents and purposes. This, however followed two sessions which with huge swings. It closed at $1207.50 -$1.40 – still holding on to Monday’s HUGE ‘key reversal’ that had a high of $1220.40 and almost closed a gap going back to 10/28 ($1226.40), and now only the 3rd time above the 40/50 day since 10/21! 11/7’s low was $1130.40, a new 12-month low!). The last 26 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 $1273 – bottomed??? The 12-month high is $1392.60 on 3/17, highest high since 9/4/13. 11/7’s low was $1130.40! Overnight very tight ahead of payrolls at $1203.60 -$3.90. There have now been 10 highs above $1200 since 10/31. Silver still holding in mid-$16’s with a slight new high of $16.68! 12/1’s low was $14.12, more than a five year low.
Crude closed lower at $67.38 +.50 in a narrow outside session that was technically a negative key reversal (ignore), following two straight ‘inside sessions’. Monday’s range was $69.62-$73.64 – 4 handles – with a low of $63.72 – a new five year plus low (6/2010)! Friday’s session high was $77.83. 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 ($77.80!), then the 50 day ($80.44!), and lastly the 200 day (95.44!), 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 weaker again at $66.49 -.31 – with a low of $66.03 – tight! 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 strong (India weaker)– ahead of U.S. payrolls? UK +0.8% vs -0.2% vs -0.3% vs +1.2% vs -0.9%; France +1.3% vs -0.9% vs – vs +0.3% vs –0.3%; Germany +1.3% vs -0.6% vs +0.3% vs -0.2% vs -0.1%; Japan +0.2%? vs +0.9% vs +0.3% vs +0.4% vs +0.8% vs +1.2%; Hang Seng +0.7% vs +1.7%!!! vs -1%! vs +1.2% vs -2.6%!!! – what a week due to ending of riots???; Korea –? vs +0.9% vs +0.2% vs – vs -0.8%; India -0.4% vs +0.4% vs – vs -0.4% vs -0.5% vs +0.9%. U.S. equity futures higher but no opening gap up: DOW +36 (range 38); SPX +2.20 (4!); NDQ +7.75 (4!?!). This just ahead of payrolls release…update will be up with headlines.
Some random thoughts:
…so you want to be a billionaire? What kind of billionaire will you be? Pick one: a) Bill Gates. or b) Koch brothers, Walton’s and a host of others.
Ah, you picked ‘b’ – good for you…after all you did it on your own with no help from anyone, certainly not any of the benefits the government (we, the people) provided you.
What are you going to do? Buy a $20 million aircraft? …a $5 million yacht…a $10 million mansion in the Hamptons?…or how about one of those nifty NYC condos that cost $10-30 million (and only pay tens of thousands instead of hundreds of thousands in property taxes thanks to the government being bribed!)…of course you don’t want to live their…just visit it with your birds-eye view of Central Park so you don’t see the adjacent poverty…you certainly don’t want to look towards midtown!
It used to be when one became a ‘millionaire’ (talk about archaic!…in a nation of billions in GDP becoming trillions – what comes after trillions?), that one’s preoccupation was in not losing it! Buy government and muni bonds…real estate…a few stocks. But now it has shifted to not only the items listed above but to tax avoidance, cutting your own taxes as, after all, you don’t use the public…schools, libraries, medical services…no sir, those are frivolous. But you must increase your standing on the Forbes wealthiest Americans, right? That is soooo important!
How do you assure that you can accomplish those goals? Well, for one fight an increase in the minimum wage with the argument that it hurts small businesses which you don’t give a damn about…nor does your Rep/Senator…or even Obama who made tax-dodging GE’s CEO, Jeffrey Immelt chairman of a commission on small business…hear! hear!
Next you either create a superpac and pay yourself millions to run it (Karl Rove), or fund one (Koch brothers), or you contribute big-time to one and of course to the limit to individual politicians that you want to know your name…and answer your phone calls.
That, folks, is what being a ‘b’ billionaire is all about. OR you can choose door number ‘a’ and do good with your money (doing good does not mean going to a $100,000 charitable ball that spends half of it on food/drink, and entertainment.
(By the way if you are one of those grossly overpaid CEO’s attaining billionaire status is much easier…and faster…and don’t worry, if you screw up at first, some other company with your cronies on the board will hire you…if you scratch their back too, right?)
But what is sad…truly sad…is the number of people of middle or little means who put in countless hours helping those even less fortunate than they. Not by writing checks but by volunteering, etc. They are the backbone of America and if you are a ‘b’ type: screw ‘em.
After all ‘he who dies with the most toys wins’, right? Hopefully that is dead wrong.
Will close with a parable of sorts attributed to the legendary ‘Bama coach Bear Bryant:
You have a chance to win a game…and with a great prize: each and every day for the rest of your life $86,400 will be deposited in your bank account to do with as you wish…with only one caveat: what you don’t spend that day will be withdrawn – spend it or lose it.
What would you spend it on? The items listed at the top of this piece, or…
Guess what the results are in …and each and every one of you has won! Fantastic. Oh, but TB erred…it isn’t dollars it is ‘seconds’ as 86,400 is the total number in a day and each one not use productively (hopefully for good purposes), is lost at the end of the day.
Use them prudently. Have a great weekend…and don’t waste those seconds.