2/6/15…more jobs but still working for peanuts (cachuetes)!

TB’s Wine Quote of the Day: “I never met a bottle of wine I didn’t like…okay, mostly.” TB

Bloomberg Quote of the Day: “Self-expression must pass into communication for its fulfillment.”    – Pearl S. Buck …send me a text so we can discuss it…don’t have time to talk. TB

U.S. Non-Farm Payrolls increased by 257k vs consensus 228k. December was boosted to 329k, making it the biggest three-month gain in 17 years!

The Unemployment Rate was steady at 5.7%, due to an increase in the labor force as peple became more optimistic on jobs. Youth unemployment ‘dipped’ to 22%. Average hourly earnings rose by 0.5%, the most since November 2008, BUT for the past 12 months up just 2.2% – why do people keep getting excited about these numbers? Pathetic! No self-respecting (narcissistic?) CEO would accept that!

(Bloomberg is not provide full data – will update later if and when it becomes available. TB)

Note: Yellen testifies before Congress next week in her semi-annual appearance.

Market Reaction (8:45am EST): Winners: Dollar Index higher at 94.296 (Euro the loser $1.1370 -0062); U.S. Stocks doubled their gains but remain small…watch and wait! Losers: Gold went from a slight gain to $1249.30 -$13.40! Crude holding on to earlier gains, now $51.70 +$1.22; Treasury’s ‘knee-jerked’ down giving up modest o/n gains but not THAT weak: 10’s 1.86 -3/8; 30’s 2.45% -5/16; long TIP 0.65% -1/4 – not bad…perhaps numbers aren’t as good as they looked at first glance? December revision is what made them look so good…Jan. unimpressive.

Overnight Global Markets:

European equity markets weaker for a third day following the Greek concessions they later reneged on, Asia mixed: UK -0.2% vs -0.2% vs -0.6% vs +1.1% vs –; France –0.3% vs -0.1% vs -0.3% vs +1.1% vs –0.2%; Germany –0.6% vs -0.1% vs -0.4% vs +0.7% vs +0.4%; Japan +0.8% vs -1% vs +2%!!! vs -1.3%!!! vs -0.7%; Hang Seng -0.4% vs +0.4% vs +0.5% vs +0.3% vs –0.1%; Korea +0.1% vs -0.5% vs +0.6% vs – vs +0.2%; India -0.5% vs -0.1% vs -0.4% vs -0.4% vs -0.2% vs -1.7%!!! U.S. equity futures modestly higher ahead of payrolls: DOW +29 (range 47); SPX +2.60 (6!) NDQ +5 (6!). As one economist wrote today: “prepare to be underwhelmed” by the payrolls reports! Sit back and take a look-see!

Global Money Markets: Libor: 0.255% 3 mos; 0.361%; 6 mos – still inching up!…but remain near their recent record lows! The Fed Funds rate has averaged 0.09% and is now 0.12-0.14% – 0.14% is the 9-month high! T-Bills: 0.01%, 1 mo; 0.01%, 3 mos; 0.06% 6 mos; 0.20% 1-yr – 0.25% is the 12-month high!

U.S. Treasury Bonds are slightly higher o/n ahead of payrolls…but then they were up the prior evening – we all know how that turned out…a lot is hanging on payrolls today: 10’s 1.81% +1/8; 30’s 2.42% +3/8; Long TIP: 0.62% +7/16 – meaningless drivel!

European Bonds: little changed again…except Greece which remains VOLATILE! Germany 0.34% -2; UK 1.54% -1; France 0.57% -1; Italy 1.54% +1; Spain 1.44% —; Portugal 2.36% -5!; Greece 9.66% +27 – yesterday’s range was 9.92% to 9.39%!!! Recent range is: 7.03% to 10.79%!!! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.33% -2; low is 0.19%!

Dollar Index quiet for a 3rd day and a tad weaker following the reaction to Greece’s ‘dramatic’ move. This could change after today’s payrolls report Last Monday’s 95.527 is highest since 9/30/03! Currently 93.62 +.05. Euro slightly better: 1.1463 -.0030, following last Monday’s 1.1098 – an 11-year low!!! Sterling 1.5332 +.0087, that is another new high, after bottoming out last Monday at $1.4952, with critical support at $1.48, a double-bottom from 3/29-31/2013! Yen stabilizing at $117.27 -0.15, in quiet trading – support is 119, the 40/50 day m/a’s! 1/15’s 115.86 was best since 12/17/14’s 115.57 – weak since peak Oct. ‘14: 105.23; recent best 2/4/14 @ 100.76!!! Record: 12/30/11: 75.35!!!

Commodities: Gold waffling again in an ‘inside session’ at $1264.30 +$1.60; last Thursday it bounced off the 200 day ($1253.62). Silver slightly better and still oblivious to Gold’s problems. It is currently $17.29 +.09 in an inside session too. Crude is trading higher in a narrow range after squandering Tuesday’s Greek rally and is currently $51.98 +$1.50 with support/resistance at $51.73; o/n high $52.68 Caveat emptor! That goes for buying gas too! Those higher prices will not hold – hopefully. HUGE volatility!

Thursday’s Market Summary:

Yesterday? Who cares…most likely a lot of short-covering ahead of payrolls but who carees? This isn’t a market…it’s a lottery! All indices up, volume broke below 4B shares, A/D’s and Breadth positive but new highs AND lows went nowhere! Disregard and wait!

Total NYSE Volume declined to 3.8B shares – not good when there is a rallyslipped back to 4.12B shares from 4.6B vs 3.98B vs 4.54B vs 4.1B vs 4B – ytd low is 2.7B on Jan. 2; while 12/24’s 1.4B shares is the 12-month low. Shares traded on the NYSE floor were lowest of the week at a slightly above average 794M shares vs 900M vs 981M (2nd highest of ’15) vs 912M vs 1.22B (highest since 8/8/11!!!) – 646M is the ytd low while 12/24’s 349M is the 12-month low…average is 742M shares! Since 1/5 the average is 866M shares. The average for Dec. peaked at 979M shares on Dec. 22nd.

Advance/Declines were positive for only the 8th time in 18 sessions! NYSE: +3.1x! vs -1.8x vs +3.8x! vs +2.7x vs -2x; Nasdaq +2.8x vs -1.6x vs +2.7x vs +1.8x vs -2.9x! Breadth was better still: NYSE +4.2x! vs -1.9x vs +7.4x!!! vs +4.5x! vs -2.6x; Nasdaq +3x! vs +1.04x vs +3.8x! vs +2.4x vs -3.1x! New 52 Week Highs slightly higher at 242 vs 215 vs 290 vs 239 vs 294 vs 457 – their range for the last 12 mos. is 39-612!!! New Lows were steady at 56 vs 58 vs 55 vs 162 vs 275 – 2015 high is 386 (12/16’s high was 712!!!) The 12-month range is 24-1043!!! S&P VIX traded with a lower low and lower high for a second straight session with a range of 16.67-17.43 before closing at 16.85 -1.48 – but of course that is still very bearish lending credibility of short-covering today. The recent high is 12/16’s 25.20, second only to 10/17’s (31.06!) – highest since 11/2/11!!! Average of the past 12 months is 14.59 and slowly climbing, with a low of 10.28!…high close was 26.25 on 10/15/14!

U.S. Bond Market traded very weak as traders most likely unloaded ahead of Friday’s payrolls reports, and took out Tuesday’s high yields! 10’s 1.82% -5/8 (1.64% low yield); 30’s 2.43% -1-15/16 (2.22% new low!); Long TIP 0.64% -2-3/8 (0.49% new low!), the weakest link. Watch closely!

Gold was lethargic again, with a ‘slight outside’ session. It has been morose since last Friday’s biggest daily gain to the high since 2012 ($28.10) on Friday, but well below the highs of a week ago. This was the first time in 7 sessions without a lower high since peaking at $1307.80 on 1/22, and the session low was less than $4 above the 200 day – it closed at $1262.70 +$1.80. Last Thursday’s low was $1251.00, $3 BELOW the 200 day ($1254) and the close that day of $1254.60 was lowest since 1/14 when the rally began. 11/7’s low, $1130.40 is the current 12-month low! 7/17’s session high was $1346.60, highest since March 19th!!! Support is the 200 day, $1254, followed by the 40 day $1233, and the 50 day at $1226, both slowing rising. The 12-month high is $1392.60 on 3/17/14, highest high since 9/4/13. Silver continues to ignore gold and closed at $17.28 -.12. The 200 day ($18.44) is resistance with support at the 40 day, $16.83, then the 50 day, $16.75. $14.12 is the recent low (12/1/14), first time in more than five years!

Crude put in its third straight ‘lower high and lower low’ – never a good thing before closing at $50.48 +$2.03. Last Thursday’s new low was $44.08, lowest since 3/09. $50-52 is now resistance/support. 12/17’s high was $58.98. Consider: 10/25/14’s high was $84.83. There have been 64!!! handles since peaking at $107.73 on June 13th, highest since 9/19/13, and if is off 59% since then! The record high of $147.27 was on 9/30/08. RES at the 40 day ($51.34!!!), then the 50 day ($54.85!!!), and lastly the 200 day ($85.04) – all continue to fall and WILL SOON become support – albeit the hard way! The range is now $43.58-$112.24 since 3/1/12. 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%!!!). Recall TB’s prediction of a bounce at $43.83? It WILL test that $32.40 March ’09 low…by the way the decline from the 9/20/08 high to the low took EXACTLY 6 months – we are now in the 8th month of decline!!!

Enjoy your weekend and don’t spend all those terrific wage increases just reported. Oh, you already did? In December???

TB

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