Interdum stultus opportuna loquitur...

Saturday, October 30, 2004

How Convenient...

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Note: just edited this post to check the ping function for a blog aggregator; not large-scale change to content for those who've read the post already.

Osama bin Laden made his pre-election booger-man video last night - waiting politely until after the stock market had closed, of course.

Given the strong ties between his family and that of George Bush (including funding part of Bush's failed Arbusto Oil), I'm not surprised that he decided to do something which appears to be solely designed to boost Bush's electoral chances next Tuesday.

And doing it in a way that it doesn't make the market nervous (coz the market was closed) and gives the White House the whole weekend to spin a fearful frenzy in the closing stages of an apparently-tight campaign? Well that's right neighbourly, as they say in regions where Bush likes to hang out.

I still think Bush is going to lose; the polls are close, but what matters is the polling behaviour of newly registered voters in a handful of key states like Ohio (where the GOP is trying to suppress the vote) and Florida (where Bush at least has the state governor in his pocket).

A guy who cares way more than me about who wins (and has a perfect track record over the last 40 years) reckons Kerry will end up with over 300 Electoral College seats (270 makes you a winner).

Economic Statistics

A mixed-ish bag of results last night, but on the whole the data exceeded (low-ball) expectations. Of particular interest was the "core" Personal Consumption Expenditure Deflator, which at 0.7% was the lowest in 42 years. Phew - lucky nobody buys food or energy...

The Employment Cost Index was softer than expectations at 0.9% (compared with 1.0% consensus) and 3.8% year-over-year. In other words, wages continue to grow such that the bottom two-thirds of all wage-earners are suffering declining purchasing power.

The Gross Domestic Product report showed economic growth (suitably massaged and subjected to the usual 1% hedonics boost) at 3.7% as compared with expectations of 4.3% growth. The GDP deflator came in at 1.3% (consensus guess was 1.5%).

The University of Michgan Index of Consumer Sentiment exceeded expectations by a pretty wide margin - the consensus guess was for a slight improvement to 88 (from 87.5 last month) but the index was actually 91.7.

So you can see - everything is rosy, but you should be very scared of the booger-man... so Vote Dubya or the terrorists will get you.

Thing is, folks are just dumb enough to fall for it.

Federal Reserve Open Market Operations

The Fed's OMO desk did a large repurchase last night - ($8.25 billion overnight) but only $3.712billion was in Treasury-backed collateral.

As a result, we ought not to have expected a market bounce to begin at midnight - and the market did right by us, with midnight being the timing for the session high.

Major US Indices

It was Friday, and there was no repo grease thrown onto the cogs... so no prizes for guessing that equities were pretty boring. After an early spurt which peaked at midnight (our time) the DJIA flopped around 10000 until a little rally in the final 30 minutes which took it up to 10030. By the close the print was 22.93 points (0.23%) higher, closing out the day at 10027.47 points; the broader S&P500 rose 2.76 points (0.24%), to end the session at 1130.2.

Over at Times Square, the Nasdaq Composite dipped 0.75 points (0.04%), to close at 1974.99, while larger-cap technology issues fared better with the Nasdaq100 losing 0.4 points (0.03%), to end at 1486.72 points.

NYSE Volume was above average, with 1.45 billion shares changing hands, and Nasdaq Volume was average, with 1.66 billion shares traded.

Nasdaq Composite1974.99-0.75-0.04%
NYSE Volume1.45bn--
Nasdaq Volume1.66bn--
US 30-yr yld4.79%-0.05%-0.93%

Market Breadth & Internals

On the NYSE advancing Issues exceeded decliners by 1921 to 1363 for a single-day A/D reading of 558; Nasdaq gainers trumped losers by 1550 to 1539.

NYSE advancing volume exceeded volume in decliners by 883.12 to 582.68 million shares; On the Nasdaq declining volume exceeded volume in advancing issues by 474.47 to 457.58 million shares.

135 NYSE-listed stocks rose to new 52-week highs, and 14 posted fresh 52-week lows, while on the Nasdaq there were 113 stocks that hit new 52-week highs, and 30 which fell to fresh 52-week lows

Advancing Volume (m)883.12457.58
Declining Volume (m)582.68474.47
New Highs135113
New Lows1430

Market Sentiment

Recall that I said yesterday that da Boyz had perhaps decided to keep the market in a holding pattern until after next Tuesday's vote: well, the options market is really starting to dry up.

Note again how both put and call volume fell away last night; also volatility rose a tad.

That means that option writers are backing away, forcing bids higher; in other words they are trying to discourage trade by widening bid-ask gaps and forcing bidders to take the running.

That's how you get rising volatility but falling turnover.
Equity Call Volume2.3m-0.43m-15.71%
Equity Put Volume1.57m-0.19m-10.92%
CBOE Volatility Index16.270.885.72%
CBOE Nasdaq Volatility Index21.90.653.06%
Equity Put-Call Ratio0.680.045.68%
SPX-VIX Ratio69.47-3.7927-5.18%


Bonds rose at the long end, with the yield on the benchmark 30-year Treasury bond shedding 0.045 points to 4.794%.

UST 2Y (yld)2.557-0.02-0.93%
UST 5Y (yld)3.285-0.042-1.26%
UST 10Y (yld)4.029-0.04-1.1%
UST 30Y (yld)4.794-0.043-0.89%

The Banks Index advanced 0.33 points (0.33%), at 99.42; within the index,

  • the Derivative King - JPMorganChase advanced $0.12 (0.31%) to $38.60; and
  • Citigroup gained $0.11 (0.25%) ending the day at $44.37

The Broker-dealer Index lost 0.61 points (0.45%), to end the session at 135.9; the ticket clippers lined up as follows -

  • Merrill Lynch dipped $0.42 (0.77%) ending the day at $53.94
  • Morgan Stanley Dean Witter shed $0.74 (1.43%) closing at $51.09
  • Goldman Sachs added $0.95 (0.98%) to end the session at $98.38
  • Lehman Brothers declined $0.20 (0.24%) to end the session at $82.15

The Philadelphia SOX (Semiconductor) index declined 0.11 points (0.03%), at 412.25

  • Triquint slid $0.06 (1.66%) to $3.56
  • Micron Technology dipped $0.07 (0.57%) at $12.18
  • Intel dipped $0.01 (0.04%) to end the session at $22.26
  • Altera dipped $0.02 (0.09%) to $22.71
  • JDS Uniphase gained $0.03 (0.96%) ending the day at $3.17

Gold & Silver

Gold strengthened by $4.50 (1.06%) to $429.50 per ounce. The Gold Bugs Index gained 4.91 points (2.15%), ending the day at 233.6 points.

Silver rose $0.19 (2.59%) to close at $7.32 per ounce. The Gold and Silver Index (XAU) gained 1.81 points (1.78%), closing at 103.42 points.

PHLX Gold and Silver Index103.421.811.78%
AMEX Gold BUGS Index233.64.912.15%


Oil was firmer, rising by $1.12 per barrel, closing at $51.75 per barrel. The Oil and Gas Index (XOI) rose 8.85 points (1.29%), to 695.63 points.

The Oil service stocks (OSX) Index added 1.89 points (1.62%), to 118.53

Reuters CRB2850.250.09%
Crude Oil Light Sweet51.751.122.21%
AMEX Oil Index695.638.851.29%
Oil Service Index118.531.891.62%


The US Dollar Index plumbed its 12-month closing low last night, posting an intraday low of 84.95 (recall that the 12-month intraday low is 84.77).

US Dollar Index84.98-0.37-0.43%
Australian Dollar0.74830.00330.44%
Swiss Franc1.1938-0.0064-0.53%

European Markets

France's benchmark CAC-40 Index declined 15 points (0.4%), closing at 3706.82; the German DAX-30 Index gained 0.66 points (0.02%), to 3960.25; and in the UK, the FTSE-100 Index declined 18.6 points (0.4%), to end the session at 4624.2 points.