Interdum stultus opportuna loquitur...

Friday, November 05, 2004

Is it 1999/2000 again?

Note - from June 24th 2009, this blog has migrated from Blogger to a self-hosted version. Click here to go straight there.

Man, is this thing late, or what? It's not my fault though - Blogger has had server problems all morning. Anyhow, onwards and upwards...

Economic Statistics

  • New Jobless Claims were reported, with the number at 332,000, which was lower than the consensus guess (340,000);
  • Productivity came in at 1.9%, which exceeded the consensus guess (1.7%);
  • Unit Labour Costs rose by 1.6%, which was lower than the consensus guess (2%);

So if you accept the GDP numbers (which is what productivity is calculated from) and the hedonic-indexing that resides there like a troll under a bridge, everything is just fine and dandy (look at the US dollar for evidence of the global vote on that hypothesis).

Federal Reserve Open Market Operations

The Fed's Open Market Operations desk performed 2 repurchase operations last night:

  • a $6.5billion, Overnight repurchase, entirely in T-backed collateral; and
  • a $8billion, 14-day repurchase with $7.935billion in T-backed collateral.

I am fond of saying - no repo grease, no intraday upward momentum. Take a look at a chart of the intraday action. Familiarise yourself with 10 a.m. New York time, and if there's a repurchase agreement which gives more than $5 billion to the vermin who manipulate global financial markets, buy an S&P futures contract.

Major US Indices

The DJIA advanced 177.71 points (1.75%), closing out the day at 10,314.76 points; the broader S&P500 advanced 18.47 points (1.62%), to end the session at 1161.67. Over at Times Square, the Nasdaq Composite posted a rise of 19.3 points (0.96%), to close at 2023.63, while larger-cap technology issues fared worse with the Nasdaq100 adding 12.31 points (0.82%), to end at 1516.2 points.

NYSE Volume was chunky, with 1.79 billion shares crossing the tape, whileNasdaq Volume was chunky, with 1.81 billion shares crossing the tape.

Nasdaq Composite2023.6319.30.96%
NYSE Volume1.79bn--
Nasdaq Volume1.81bn--
US 30-yr yld4.81%-0.01%-0.29%

Market Breadth & Internals

On the NYSE advancing Issues exceeded decliners by 2597 to 747 for a single-day A/D reading of 1850 - the sort of reading you get when everybody has had five tabs of speed, plus some hallucinogens to make the bad valuation vibve go away. Nasdaq gainers trumped losers by 1835 to 1221 - for once the Nasdaq looked saner than the NYSE... we are in the Bizarro world...

NYSE advancing volume exceeded volume in decliners by 1450.51 to 322.04 million shares; that's a 4.5:1 tilt. Mindless enthusiasm is not just for labrador puppies these days. I guess the American Taliban (the nutball fundamentalist Christians) figure that since Jesus gave the White House back to Dubya, them End Times is comin' and so it doesn't matter what stupid thing you do with your money.

Nasdaq advancing volume was greater than volume in decliners by 652.82 to 383.4 million shares.

362 NYSE-listed stocks rose to new 52-week highs, and 7 posted fresh 52-week lows (another maniacal tilt), while on the Nasdaq there were 159 stocks that hit new 52-week highs, and 49 which fell to fresh 52-week lows

Advancing Volume (m)1450.51652.82
Declining Volume (m)322.04383.4
New Highs362159
New Lows749

Market Sentiment

Oh man... we're nearly there. The stats are so one-sided, that if this was a rowboat there would be no-one on the bear side... which means that water will soon be pouring over the gunwales.

Put volume is still too high though. It is really bugging me; it's the one thing that keeps helping the market upwards (because vertical market moves like the last eight days, are not caused by buyers so much as they are caused by short-covering; high put volume is the equivalent of increasing short interest).

To put the "short covering" hypothesis into better context, there is a story on PrudentBear about how a few large hedge funds are turning themselves into long-only funds. In other words, no hedging. (Or at least, no shorts).

Equity Call Volume3.01m-0.1m-3.2%
Equity Put Volume2.28m0.05m2.44%
CBOE Volatility Index13.97-0.07-0.5%
CBOE Nasdaq Volatility Index20.16-0.66-3.17%
Equity Put-Call Ratio0.760.045.83%
SPX-VIX Ratio83.151.73012.12%


Despite strength in stocks, bonds have not taken much of a hit recently. last night the bond market rallied along the curve (are they expecting Bush to be fiscally prudent in his second term? Give me a break). The yield on the benchmark 30-year Treasury bond shed 1.4 basis points to 4.812%.

UST 2Y (yld)2.610.041.44%
UST 5Y (yld)3.3450.020.6%
UST 10Y (yld)4.0710-0.1%
UST 30Y (yld)4.815-0.011-0.23%

The Banks Index advanced 1.92 points (1.91%), to end the session at 102.65; within the index,

  • the Derivative King - JPMorganChase added $0.80 (2.06%) ending the day at $39.65; and
  • Citigroup added $0.80 (1.77%) closing at $46.09

The Broker-dealer Index rose 2.63 points (1.89%), to end the session at 141.53; the ticket clippers lined up as follows -

  • Merrill Lynch added $0.84 (1.52%) ending the day at $56.20
  • Morgan Stanley Dean Witter added $0.86 (1.63%) at $53.78
  • Goldman Sachs advanced $0.63 (0.63%) closing at $100.00
  • Lehman Brothers rose $1.91 (2.3%) to $84.95

The Philadelphia SOX (Semiconductor) index advanced 2.64 points (0.64%), to 412.72

  • Triquint shed $0.02 (0.54%) to $3.66
  • Micron Technology advanced $0.06 (0.51%) closing at $11.74
  • Intel rose $0.21 (0.93%) closing at $22.88
  • Altera added $0.09 (0.4%) ending the day at $22.74
  • JDS Uniphase advanced $0.02 (0.64%) to $3.15

Gold & Silver

Gold strengthened by $2.50 (0.58%) to $430.3 per ounce; it hit $433 intraday, and that is giving me heartburn - only in so far as my "gold pullback" hypothesis is concerned. As an indicator of US economic malaise, it's performing its job perfectly.

The Gold Bugs Index gained 3.93 points (1.71%), closing at 233.72 points.

Silver rose $0.14 (1.94%) to close at $7.36 per ounce. The Gold and Silver Index (XAU) gained 2.47 points (2.42%), to end the session at 104.35 points.

PHLX Gold and Silver Index104.352.472.42%
AMEX Gold BUGS Index233.723.931.71%


Oil lost ground, shedding another $2.49 per barrel 4.9%), closing at $48.55 per barrel. The Oil and Gas Index (XOI) rose 9.32 points (1.33%), closing at 709.46 points.

The Oil service stocks (OSX) Index slid 0.39 points (0.33%), closing at 116.96 points.

Reuters CRB2820.10.04%
Crude Oil Light Sweet48.55-2.49-4.88%
AMEX Oil Index709.469.321.33%
Oil Service Index116.96-0.39-0.33%


The US dollar index is puttering around at its one-year low - last night it made both a new intraday and a new closing low for the 12 months to date.

US Dollar Index84.64-0.12-0.14%
Australian Dollar0.75740.00120.16%
Swiss Franc1.1873-0.0061-0.51%

European Markets

France's benchmark CAC-40 Index slid 7.48 points (0.2%), at 3762.45; The German DAX-30 Index rose 2.34 points (0.06%), ending the day at 4041.38; and in the UK, the FTSE-100 Index added 9.8 points (0.21%), ending the day at 4728.3