Quote of the Day from the Friars Club Encyclopedia of Jokes: “I play golf in the low 80’s. If it’s any hotter, I don’t play.” – Joe E. Lewis
Bloomberg Quote of the Day: “Love is a chain of love as nature is a chain of life.” – Truman Capote…indecipherable to TB but then he always was…
Bloomberg Top Stories:
*U.S. Stock Futures Decline With European Equities as Oil Fall Below $60 – $58.70!
*IEA Lowers Forecast for Global Oil Demand for Fourth Time in Five Months – Egad!
*Wholesale Prices in U.S. DECLINED MORE Than Economists Forecast on Energy!
*Investors Dash for Europe – U.S. Debt as Moribund Inflation, Oil Spur Demand
*U.S. Spending Fight Moves to Senate as House Passage Caps Day of Discord – sick!
*Two Sigma Returns 47% as Hedge Fund Machines Beat Humans Confounded by Oil – !
*Junk-bond Well Runs Dry as Oil Shock Quells Debt Issuance – bet GE sells bonds!
*Record Oil Tankers seen Sailing to china Signals Price-Slump Stockpiling – not good!
*Democrats Find Voic in Proxy Fights With Wall Street After Election Loss
*$70 Oil Is Norway’s Break-Even for Policy Setting, Central Banks Says – $48 for shale!
*The New Guide to Trading on Insider Information Without the Risk of Prison – SICK!!!
*Mexico Shale Boom Outlook Dims as U.S. Drillers Struggle with Rout at Home – oops
Thursday’s Market Summary:
Hah, TB you don’t know your tail from a hole in the ground…idiot! See, the end of the world didn’t materialize…we had a nice rally! Is that so? Early in the morning, this scribe might have agreed while he scratched his head pondering the meaning of the word ‘huh’. Let’s recap: Gold still holding steady above $1200, Crude continuing to plunge – could we see gas below $2???; Bonds. which had been up slightly overnight as they probed their low recent yields, turned turtle on the stock rally which took the Dow up over 210 points…then stagnated…as if afraid to look down…and then it did, nearly back to ZERO on the day, before closing up 63, or 0.4% – weakest of the indices along with the Russell 2000. The rest were ALL up 0.5% and you know how TB feels about coincidences! Ok, Dow Transports were up 0.8%, but the winner was once again, the affable (not laughable) Dow Utilities +1%! YTD, w/divvies reinvested they are up 29% despite a few minor setbacks. Compare to second place Dow Transports +28.7% – the winner until this month…December can be a very cold month. NDQ 100 is up 24.7%; Dow +10.9%, and S&P 500 15.4%. Still pretty good but think how much better you would sleep at night collecting those dividends. Speaking of dividends, honk if you think ‘tax-dodging’ IBM is going to the several billion dollar increase by repatriating dollars…no way…they will issue debt here to pay for them, further insuring they pay no U.S. taxes…thanks, Jack Welch and his clone Jeff Immelt…you know, the guy Obama appointed to head his commission on ‘small businesses’ – isn’t that like making Count Dracula head of a blood bank? You bet! …and they are the last honest ‘big’ bank left in the country! Now look at Volume…3.9B steady, while A/D’s and Breadth were barely positive in comparison to yesterday’s NYSE Breadth of MINUS 15.5x!!! Ne 52 week highs steady at a feeble 201 while new lows declined but just to a still high 364! Saving the best for last, the S&P VIX dropped sharply on the open BUT just to 15.94 which is still very bearish, then, even as the market sat indecisive slowly began to rise, accelerating into the close ending at a HUGE 20.08 +1.55 (+8%)…and from the session low: up 26%!!! Unheard of! What a setup for next Friday’s options expiration…quadruple witching and the last one of the year. Could be downright ugly!
Total NYSE Volume near even at 3.93B shares vs 4.05B vs 3.95B vs 3.72B vs 3.36B. Average volume since 9/30 remains about 3.6B shares or about 600M more than the 12-month average. Shares traded on the NYSE floor (aka REAL) slipped but remains high at 824M shares vs 913M (1st 900M day since October!) vs 834M vs 770M vs 755M, For comparison purposes, for the prior 12 months it is a historically weak 721M shares…but since 10/1: 814B 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 21 – just one in Nov, and SIX 900M+ days. Now FOUR 800M days and one 900M day for Dec.
A/D’s unimpressive: NYSE: +1.4x vs -4.6x!!! vs +1.5x vs -2.3x vs +1.1x; Nasdaq +1.5x vs -4.6x!!! vs +2.1x vs -2.9x vs +1.9x. Breadth was similar: NYSE +1.2x vs -15.5x!!! (Unbelievable!) vs +1.4x vs -3.8x!!! vs 1:1; Nasdaq +2.2x vs -2.5x vs +2.1x vs -3.3x vs +1.6x. New 52 Week Highs steady at a weak 201 vs 215 vs 207 vs 386 vs 363 – their range for the year is 39-612!!! New Lows fell back but remain strong at 364 vs 460 vs 467! vs 416 vs 283. The 2014 range is 24-1043!!! S&P VIX attempted to decline but only made it to 15.94 – this despite the early rally – then worked its way back to 20.13, highest since 10/10 before closing at 20.08 +1.55 or +26%!!! Those bearish extremes that had a high of 31.06 (highest since 11/28/11!!!), are now a big possibility with options expiry just a week away. The average of the past 12 months is 13.98, with a low of 10.28!…high close of 26.25 on 10/15/14!
U.S. bond market closed mixed but after being hit early in the session. Note on 12/2, the 30 yr bottomed at 3.01%. Updating the recent 12 month low yields (10’s 2.09%; 30’s 2.80%!; and long TIP 0.83%), 10’s closed at 2.16%! -1/32; 30’s 2.80%! NEW LOW +5/16, and the long TIP 0.85%!!! +1/2. Overnight rallying strong: 10’s 2.12%! +3/8; 30’s 2.77%!!! ANOTHER LOW +3/4; long TIP 0.83% +7/16 – tied for low!
Libor update: 0.240% 3 mos.; 0.338% 6 mos. Both still near their recent record lows! The Fed Funds rate has averaged 0.09% and is currently 0.11-0.13% – a 9-month high. T-Bills: 0.01%! one-month; 0.03% 3 mos; 0.19%!!! – why is it rising?
Foreign bond yields lower, ex-Greece which is nearing 9%!!! (Benchmark is 10yr): Germany 0.63%! -5!; UK 1.82%! -8!; France 0.89%! -5!; Italy 2.03% -2; Spain 1.86% -1; Portugal 2.93% -1; Greece 8.88%!!! vs 8.70%! vs 8.24%! vs 7.71% vs 7.03% +8. Not for the faint of heart! 10/16’s close was 8.54%! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.39 -1.
Gold is holding nicely safely above $1200 closing at $1225.60 -$3.30 – a ‘temporizing bid’ again two days after that strong rally and close that had a session high of $1238.00 – highest since 10/22 and the first REAL $1200+ close since the selloff began. Well above the 40/50 day again for just the 6th time since 10/21! 11/7’s low was $1130.40, a new 12-month low!). This was only the 2nd time in 31 sessions without a print below $1200. Last close above $1300 was on 8/15. 7/17’s session high was $1346.60, highest since March 19th!!! Support is at $1200 (psych) and the 40 day, the 50 day $1203, RES at the 200 day $1270 – all have 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 it is slightly weaker at $1223.90 -$1.70 – holding nicely with a low of just $1218! There have now been 13 highs above $1200 since 10/31. Silver trading near its $17.27 high at $17.08! This following a $14.12 recent low, not seen in more than five years!
Crude dove yet again to yet a new low 5+ year low (7/09), of $59.32 –it’s 6th straight ‘lower low’ before closing at $59.95 -$1.79! Consider: 10/25’s high was $84.83. There have now been 46!!! 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 5/15/09 is $56.07: $89.85 is the average! Recent rally high and close are $110.70 and $110.53 respectively. RES at the 40 day ($75.11!), then the 50 day ($77.45!), and lastly the 200 day (94.48!), all STILL increasing their rate of decline! We are now headed for $50!!! The recent range is now $59.32-$112.24 since 3/1/12. Overnight it is plunging through support again with another new low of $58.56 (now its 47th handle)!_It is now $58.70 -$1.25!!! 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%!!!).
Overnight Global Markets:
European equities EXTREMELY weak – now three days! Asia mixed, Japan higher? UK -1.5%! vs -0.8% vs +0.1% vs -1.5%!!! vs -0.9%; France -1.5%! vs -0.4% vs +0.1% vs -1.8%!!! vs -0.9% vs +1.3% vs -0.9%; Germany -1.4%! vs +0.1% vs +0.6% vs -1.6%!!! vs -0.5% vs +1.3%; Japan +0.7% vs -0.9% vs -2.3%!!! vs -0.7% vs +0.1%; Hang Seng -0.3% vs -0.9% vs +0.1% vs -2.3%!!! vs +0.2%; Korea +0.3% vs -1.5%!!! vs -1.3%! vs -0.4% vs -0.4%; India -0.9% vs -0.8% vs +0.1% vs -1.2%! vs -1.2%! U.S. equity futures SLAMMED – and yes, Thursday WAS a dead cat bounce? DOW -105 (124); SPX -10.70 (140; NDQ -24 (44). Worse, it is ‘orderly’!
Some random thoughts:
…with oil plunging…$58.56 overnight…and shale drillers requiring $48 to breakeven (not tht that matters because they will have to keep pumping to service debt and other expenses), Norway, and now Mexico are in trouble…and not related to oil is Greece which may have to tap the well yet again (ECB not ‘oil’). Note that Greek 10-year bond yields have risen to near 9% from 7% in just FOUR days! Also, Wholesale Prices are plunging now on Crude (gasoline is in CPI not in WPI), and imagine IF the Fed had tightened in its ill-advised inflation concerns! They (like Obama should have done), had better stay focused on jobs…and note that a lowering of inflation brings them closer to that zero inflection point that Bernanke so feared.
Meanwhile, Congress is now in a battle…actually two over the debt ceiling: the first along party lines (GOP outcasts objecting), and second, Dems and ‘across-the-aisle’ Republicans joining hands over the absurd and criminal idea of increasing political contribution amounts for the wealthy – their base! Boehner continuing to be a jerk while McConnell and Obama seem to be in détente. Technically the government is out of money but that will be solved today at the last possible minute…unless Sen. Ted Cruz holds sway.
Meanwhile the stock market is more volatile than nitro glycerine – a fool’s pastime.
Get out of here while you can and enjoy your weekend!
TB
Traderbill's Financial Markets Weblog 