Quote of the Day from the Friars Club Encyclopedia of Jokes: “Baseball’s been called the national pastime. It’s just the kind of game someone deserves who has nothing better to do than try to pass his time.” – Andy Rooney
Bloomberg Quote of the Day: “I had all the disadvantages required for success.”
– Larry Ellison…and one VERY BIG EGO!!! Mr.A.H.
Bloomberg Top Stories
*U.S. Stocks Fall for Second Day as Wal-Mart Misses, Factory Output Tumbles – see Walton’s if you paid your employees a LIVING WAGE you would have higher sales AND earnings ! Idiots!
*Industrial Output in U.S. Unexpectedly Shrinks, Led by Plunge at Utilities – duh Winter is kaput!
*Consumer Prices in U.S. Rise by Most in 10 Months After Weak First Quarter – well I’’ be…
*Appaloosa’s Tepper Says Investors Should Hold Cash With Markets Dangerous – so does TB!
*Russian Holdings of U.S. Treasuries Decline 20% to Lowest Level Since 2008 – THINK!
*U.S. May Philadelphia Fed Index Falls to 15.4 from 16.6, Topping Estimate – ?
*Nickel Plunges by Most in More Than Two Years in Reversal of Metal’s Rally
*France Fortifies Tool to Thwart Foreign Takeovers as GE-Siemens Eye Alstrom
*Nice Proves Tough Sell in Nebraska as State Ads Battle for Tourist Trade
*Ukraine Pushes On With Eastern Offensive After Russia Warns on Election
*Turkey Unions Strike After Nation’s Worst Mine Accident Kills at Least 282
*Obama Joining Families of Sept/ 11 Victims to Dedicate Museum in New York
Wednesday’s Market Summary and more changes since 4/23:
Hey, bulls…you rock!!!! NOT!!! As those of you who read this may have discerned, TB is concerned about setting new record highs on ridiculously low volume…and barely setting them at that. Not that that concerns the talking heads on CNBC of course…or the fact that the p/e of the S&P 500 is 17.4x…and forget that Ibbotson and Peter Lynch crap that ‘over any 20 year period’ you wouldn’t have lost money in stocks…pure unadulterated bullshit! But don’t take TB’s word for it…go to http://www.crestmontresearch.com and there you will find tables of returns, inflation adjusted returns and after tax returns of the S&P 500 that go back 110 years…set up like a matrix so you can see the returns between any two years…and guess what? If the p/e is above 13x the returns don’t come up green…just a thought…but a useful one!
Total NYSE Volume dropped even further yesterday to 2.81B shares…vs 2.86B vs 2.98B vs 3B vs 3.37B vs 3.6B – that was the last time we had ‘above’ average volume which is about 3.5B shares. Worse…even this is due to high freaks playing games with your money! Here’s why: shares traded on the NYSE floor are roughly 20% of total volume thanks to those ‘should be illegal’ electronic trading networks (ETN’s). Yesterday’s volume was just 620M shares or about 105M shares BELOW the 12-month average. Since 5/4 the average is just 661M shares with only one day registering more than 700M shares (April 30th’s 908M – monthend!). Since 3/31’s (quarterend) 2.0B shares and one of the highest ever there have been exactly FIVE 800M share days and just that one 908M share day on 4/30. Now look at this: every day trades ‘at the close’ ran 50M shares with 50-100M posted after the close…that is pathetic! – yesterday it was 120M shares!!! HELLO???…suckers! Where the F@#% is the SEC? Wake up Congress…oh, sorry you are but your ‘boss’ says look the other way…and you do!!! A.H.’s!!!
A/D’s had one good day in the last two weeks: Monday…but look: NYSE -2.1x vs -1.2x vs +3.7x; Nasdaq -2.8x vs -1.9x vs +3.7x. Breadth, you ask: NYSE -2.1x vs -1.1x vs +5.2x; Nasdaq -3.3x vs -1.3x vs 5.3x. Oh, wait…there’s more: New 52 Week Highs: vs 208 vs 233 vs 93!!! Now look at New Lows: 102 vs 62 vs 65 vs 214!!! THIS on record highs in the S&P and Dow??? Get real!!!
Oh and on Tuesday the Dow eked out a new record high of 16735…the old one set on 4/4 was 16631 before plunging to 16015 (-4.4%) on 4/11…just SIX days later; S&P was even worse…1902 vs 1897 with the same drop as the Dow to 1814 (-4.4%). The Nasdaq Comp peaked on 3/6 and is off 6.2% since then…the 100 -3.9%. Dow Transports are the only one doing well and had a new high yesterday and still held above the old one but look vulnerable. How about the Russell 2000 small cap – a proxy for broad economic strength vs earnings -peaked on March 4 at 1213 and is now 1103 (-9.1%!!!)As for the winner year to date, Dow Utilities, they peaked on 4/30 and are off 3.6% since then but still positive for the month and quarter.
Now volatility…S&P VIX has been bullish…fell to 12.13 Tuesday, and then up to just 12.17 yesterday…this after gapping down on the open Monday…it is at the lowest since January 17th..but look: it rose then from 12.28 with an 11.88 low! To 21.48 on Feb. 3rd!!! +75%!!! AND it gapped up twice along the way! Then on 4/4 (the highs cited above) it bottomed out again at 13.96 with a 12.60 low and back to 17.03 (high 17.85!) on 4/11 (+22%!!!). Still bullish? If you are you can buy CHEAP puts as a hedge now…and might be smart to do so!!! If history repeats…
Here are the latest ytd’s: Dow +0.2%; Trans +5.9%!; Dow Utilities +9.7%!!!; S&P 500 +2.2%; Nasdaq Comp -1.8%!; NDQ 100 FLAT; Russell 2000 -5.2%!!! (remember this one is supposed to be closest to broad economic growth…got it?). Not commenting much on Financials since TB’s return as they are screwy with the index showing minor changes vs brokers/banks which doesn’t make sense: NYSE Financials -0.3% ytd; KBW Banks -2.3%!?!; Nasdaq Banks -5.8%…guess they weren’t fooled by those ‘special’ dividends…no sir!
…it’s a jungle out there! Still bullish? Then you didn’t read the Bloomberg headlines above!
Overnight Comments:
Bonds had a STRONG session yesterday with the long end up over a point and strong again overnight!!! So much for Monday’s ‘blip’ up. Yield changes from Monday’s close, price was yesterday: the 10 yr closed at 2.54% +9/16 vs 2.66%; 30’s 3.38% +1-5/16! vs 3.50%. The long TIP was as low as 1.05% on 5/2, rose to 1.19% Monday and closed at 1.06% +2 points!!! Overnight strong again: 10’s 2.51% +1/4; 30’s 3.33% +15/16; and long TIP 1.01%!!! +1-7/16. Cycle highs: 30 yr high was 3.97% on 12/31; the 10 yr recent high 3.03%! Long TIP was 1.64%. The (record?) low of 0.36% was set on 4/5/13.
Libor update: 0.227% 3 mos.; 0.324% 6 mos., both just off their record lows, set in past week: 0.222% and 0.320% respectively! NOTE the Fed Funds rate has averaged 0.08% since 5/22/13 and is 0.07% -0.09%. Foreign bond market yields mixed with weaker credits highe after the recent decline…especially Greece!!! Germany 1.33% -3; UK 2.57% -2; France 1.79%! -3; Italy 2.99% +8; Spain 2.91% +6; Portugal 3.60% +11!!!; Greece was coming back from a rough period after hitting 5.83% on 2/24 then rising to 6.33% on 4/28, but look: 6.62%!!! +44!!! vs 6.16%. Range is 5.77% to 12.57%. Japan: 0.59 –.
Gold closed higher after hitting $1309.20 closing at $1305.90 +$11.10….but looks like ‘Memorex’ to TB. It closed above the 40/200 days (locked at $1301), but slightly below the 50 day ($1312…which is above yesterday’s high).remains below all three moving averages and the psych support level of $1300 with first res at the 200 day $1301, then the 40 day $1302, and the 50 day $1313 – following the ‘key reversal’ on 3/17 after printing new recent high of $1392.60, highest high since 9/4/13 – that ended in an outside day and nearly a negative key reversal! Jan. 2’s low was $1181.40 – A MULTI-DECADE LOW!!! Overnight it is WEAK failing to hold the 40/200 and the psychological $1300 at $1296.70 -$9.20 with a low of $1290.90!.
Crude closed higher at $102.37 +.67 with a session high of $102.65 – back to where it was when TB left on 4/23. 3/2’s session low was $97.37, lowest since 2/4! 1/14’s low was worst since 5/2/13: $91.24! The record high of $114.83 was on 5/2/11, the low since on 10/4/11 is $74.95: $93.60 is the midpoint!!! Recent rally high and close are $110.70 and $110.53 respectively. It is back above all three moving averages having taken out $102.20, the 4/29 high and support at the 40 day ($101.33) then the 50 day ($100.97), and 200 day $100.43. The recent range is $85.61-$112.24 since March 1, 2012. Overnight it is giving back most of the gains: $101.90 -.47 with a high of $102.26 and low of $101.74.
European equity markets slightly lower, Asia mixed: UK — vs -0.2% vs +0.1%; France -0.2% vs -0.1% vs +0.3%; Germany – vs -0.1% vs +0.6%; Japan -0.8% vs -0.1% vs +2%!!! Hang Seng +0.7% vs +1%!!! vs +0.4%; Korea – vs +10.4% vs +0.9%; India +0.4% vs -0.2% vs +1.4%! U.S. equity futures lower – range widening: DOW -33 (range 66 vs 31); S&P -4 (7); NDQ -4 (17).
Some random thoughts:
…a sad commentary…you have to watch FRONTLINE’s The United States of Secrecy which aired Tuesday night. You might end with a different opinion of Snowden…TB certainly did…not quite a hero but the only way he could ‘blow the whistle’ – sick…Dubya didn’t have a clue…Cheney and his lawyer in full control…supported by Andy Card. The worst breach of constitutional rights since the internment camps in WWII. Sadly, Obama ‘the champion of change’ has been anything but…in fact he has made it worse! …along with his henchman Eric Holder who chases windmills (leakers who weren’t) instead of Wall Street criminals. TB was sickened!…and there is another part coming. Someone had a lot of guts…watch it and you decide who the traitors were…and you won’t come up with Snowden! Cheney! Haden! …and more!!!
Leaving D.C. we drove to Falling Waters, Frank Lloyd Wright’s signature home…out in the middle of nowhere but well worth the excursion! The falls were running huge due to the rains and runoff. Spectacular! Spent the night at a casino on Wheeling Island, W.Va. Don’t see the attraction.
The next day drove through Canton, Ohio and past the Pro Football Hall of Fame…one of the ugliest edifices TB has ever seen…pass! Then to Cleveland and a most worthwhile stop at the Rock and Roll Hall of Fame…building, setting, and exhibits are incredible!!! A must see!
Then to Flint, Mich with a stop at Ann Arbor to see the campus and the huge stadium. Flint was a client of TB’s 11 years ago and it was rock bottom then…coming back…but selectively. They still have fires every night…arson, as it is the only way to sell a home in a poor area…the Flint Country Club…once almost exclusively GM execs is now the Flint Golf Course…beautiful too. When TB was there last there was a sign: memberships $5,000 – payable over TEN years! Says a lot, no? The once boarded up GM building is now partially filled and the downtown is revitalized…all ready for the growth which continues to escape them. Sad, as they are bankrupt and being run by the state but they did everything right…but the money was wasted as nobody came. Stayed there at the Holiday Inn…new when I was there last and still beautifull…the nicest HI I have ever stayed in…a great steakhouse/brew pub right across the street too!
Next we drove to Traverse City which one could easily confuse with South Lake Tahoe…many more big, nice resorts replacing the two-story motels when TB was there last…then up the lakeshore along Traverse Bay to Potoskey, the Michigan ‘gold coast’ – WOW! I was impressed before but it is now filled with an incredible complex of country clubs of every sort besides the beautiful riding academy I saw when there last time. This is where Madonna is from, fyi.
Spent the night in Mackinaw City…by the bridge that ‘couldn’t be built’ a spitting image of the Golden Gate and 5-1/2 miles long! It was the first bridge there and completed in 1957…they drove across the ice in winter before that! It was still cold so many places were still closed, especially on Mackinac Island so we didn’t go there.
The last day was a drive across the bridge and down Michigan’s Upper Peninsula in the only significant rain we had on the trip!!! About a half day but not torrential…then home that evening. An incredible 19 day trip…lucky on weather and especially on traffic…nice between seasons!
Oh, the 3500 mile trip cost us $350 or ten cents a mile…plus 17 cents for gas…27 cents total!
Highly recommend flying to Florida – from anywhere – in mid-April – rent a car which saves them the cost of ferrying them out of there and no drop-off charges…a great secret!!! Use it!!!
Another nice day in Minnesota…that makes two in a row!!!!
Have a really nice day!
TB
Traderbill's Financial Markets Weblog 