Interdum stultus opportuna loquitur...

Wednesday, December 01, 2004

Fly Me to the Moon, Let Me Play Among the Techs...

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Economic Statistics

The MBA Purchase Applications Index fell for the fourth week in a row, dipping 0.6% to 460.3.

Personal Income data showed growth of 0.6%, which exceeded the consensus guess (0.5%). Within the same report, Consumer Spending exceeded income growth - spending rose 0.7% (the consensus guess was 0.6%).

The savings rate dropped again, and the US-as-moocher program of global savings transfer to the Land of the Free Lunch continues.

There was some positive news for manufaturers (the five or six factories that haven't yet been shut down and relocated the Shenzhen). The ISM Manufacturing Index came in at 57.8, which exceeded the consensus guess of 56.8.

The news of the day, though, was the EIA Petroleum Status Report which showed an inventory build of 0.9m barrels of crude, and a rise of 3 million barrels in petroleum inventories. This tennelled the crude oil market, and gave a lift to stocks.

The Beige Book showed continued optimism from the Fed, talking talkie talkie happy talk as only the clots surrounding Greenspan can manage.

Residential construction spending fell 0.3% - 2 months in a row of the same number. Single-family and multi-family construction fell. Nonresidential construction dipped 0.4%, with falls in constructio nspending on office buildings (-1.4%) and commercial buildings (-1.6%). This more than offset a rise in speinging on manufacturing plants, which rose 1.0%.

Forthcoming US Economic Data Tomorrow's US Economic Data Calendar

Federal Reserve Open Market Operations

The Fed's Open Market Operations desk performed 1 repurchase operation last night:

  • a $3billion, overnight repurchase with $2.39billion in T-backed collateral .

The market was in a rip-snorting mood before the repurchase data, and the repo data was well below the required level to "punt" long solely on the basis of the repo.

Major US Indices

Equity markets are in typical "bull run" mentality; they're completely ignoring anything remotely negative, and fixating on any positive glimmer. that's fine, so long as it lasts, but this price action is being heavily driven at the moment by "basket" based program trading.

Dow intraday 5 minute chart...

As can be seen from the chart above, It was a "burst from the blocks and never look back" session last night; the DJIA opened at its low tick for the day, and blasted off - eventually closing at its high tick for the day. By the close the Dowager had posted a rise of 162.2 points (1.56%), closing out the day at 10590.22 points; 29 of teh 30 Dow stocks rose (only ExxonMobil fell, due to the tank-p-rama in the oil price). The broader S&P500 gained 17.55 points (1.5%), at 1191.37; that's its highest close since August 2001.

Over at Times Square, the Nasdaq Composite added 41.42 points (1.98%), to close at 2138.23, while larger-cap technology issues fared better with the Nasdaq100 adding 35.65 points (2.27%), to end at 1607.15 points.

NYSE Volume was chunky, with 1.77 billion shares crossing the tape, while Nasdaq Volume was super-chunky (over 2 bill), with 2.28 billion shares being exchanged in a little orgasm of euphoria on computer screens across the globe. It seems that investors - like consumers - are convinced that if they simply "party like it's 1999" that somehow weight of money will permanently forestall any reckoning... multiples be damned, debt be damned, currency devaluation be damned... in other words, "this time it's different".

Nasdaq Composite2138.2341.421.98%
NYSE Volume1.77bn--
Nasdaq Volume2.28bn--
US 30-yr yld5.03%0.02%0.3%

Market Breadth & Internals

On the NYSE advancing Issues exceeded decliners by 2350 to 1020 for a single-day A/D reading of 1330; Nasdaq gainers trumped losers by 2102 to 1039. Euphoric internals... duh.

NYSE advancing volume exceeded volume in decliners by 1393.47 to 367.82 million shares; Nasdaq advancing volume was greater than volume in decliners by 1080.01 to 211.48 million shares.

392 NYSE-listed stocks rose to new 52-week highs, and 2 posted fresh 52-week lows, while on the Nasdaq there were 288 stocks that hit new 52-week highs, and 16 which fell to fresh 52-week lows.

Advancing Volume (m)1393.471080.01
Declining Volume (m)367.82211.48
New Highs392288
New Lows216

Market Sentiment

The put-call volume numbers still have not properly settled down after the holida yweek, but the overall "read" from the sentiment indicators is that this little rocket is all but played out (that's getting to be a pretty old saw - but very soon it will be time to throw down some actual bets against this sucker (although the last attempt ended in the market winning comprehensively, driving some QQQ puts to zero).

CBOE Equity Call Volume (000)789.34318.5767.67%
CBOE Equity Put Volume (000)407.8879.7324.3%
CBOE Volatility Index12.97-0.27-2.04%
CBOE Nasdaq Volatility Index18.24-0.6-3.18%
Equity Put-Call Ratio0.52-0.18-25.87%
10-day PCR0.550.01252.32%
SPX-VIX Ratio91.863.23.61%

Bond Market Analysis

Bonds fell along the longer-dated strip (5s to 30-yr), with the yield on the benchmark 30-year Treasury bond rising 1.5 basis points to 5.027%.

The market is still somewhat rattled by the news that the US may be forced to re-issue 30-year bonds in order to fund the massive transitional arrangements which would be necessary if any move was made to partially privatise Social Security.

Another lazy trillion dollars or so on the national credit card bill is nothing to Bush's ideologues, but to paraphrase someone... a trillion here, a trillion there... pretty soon you're talking real money.

The December04 30year bond future (ZBZ04) dipped as low as 110 & 24/32 before a little spurt at the close left it unchanged from yesterday.

UST 2Y (yld)2.99300%
UST 5Y (yld)3.7020.0090.24%
UST 10Y (yld)4.3590.010.18%
UST 30Y (yld)5.0140.0090.18%

The Banks Index added 1.78 points (1.76%), to end the session at 102.95; within the index,

  • the Derivative King - JPMorganChase advanced $0.63 (1.67%) ending the day at $38.28; and
  • Citigroup gained $1.19 (2.66%) to $45.94

The Broker-dealer Index advanced 3.69 points (2.56%), to 148.09; the ticket clippers lined up as follows -

  • Merrill Lynch posted a rise of $1.33 (2.39%) ending the day at $57.04
  • Morgan Stanley Dean Witter added $1.23 (2.42%) ending the day at $51.98
  • Goldman Sachs advanced $1.24 (1.18%) to $106.00
  • Lehman Brothers posted a rise of $0.22 (0.26%) closing at $84.00

The "flight to shite" was in full bloom, with the Philadelphia SOX (Semiconductor) index up 16.22 points (3.83%), at 440.09

  • Triquint rose $0.09 (2.08%) closing at $4.42
  • Micron Technology rose $0.36 (3.25%) to end the session at $11.44
  • Intel gained $0.72 (3.22%) to $23.10
  • Altera rose $1.12 (4.94%) ending the day at $23.80
  • JDS Uniphase added $0.02 (0.63%) ending the day at $3.19

Gold & Silver Markets

Gold strengthened by $2.80 (0.62%) to $454 per ounce. The Gold Bugs Index lost 0.42 points (0.18%), closing at 236.52 points.

Silver rose $0.32 (4.08%) to close at $8.03 per ounce. The Gold and Silver Index (XAU) lost 0.04 points (0.04%), closing at 106.71 points.

PHLX Gold and Silver Index106.71-0.04-0.04%
AMEX Gold BUGS Index236.52-0.42-0.18%

Oil Market

The EIA Petroleum Status Report shook the crude market like a gorilla with a rag doll.

Oil tanked, shedding $3.40 per barrel (6.93%), closing at $45.66 per barrel.

The Oil and Gas Index (XOI) lost 14.06 points (1.89%), closing at 729.79 The Oil service stocks (OSX) Index slid 4.83 points (3.85%), at 120.68

Reuters CRB287.75-1.75-0.6%
Crude Oil Light Sweet45.66-3.4-6.93%
AMEX Oil Index729.79-14.06-1.89%
Oil Service Index120.68-4.83-3.85%

Currency Markets

The Euro made another new closing and intraday high against the USD, hitting 1.3370 and closing at 1.3349. the Yen continues to hold up theentire USDX, basically because everyone (including me) anticipates the Bank of Japan jumping in on the Yen sell.

It hasn't happened yet; maybe they've finally woken up to the reality that it would have been far cheaper to simply write cheques directly to importers rather than trying to support them by attempting to keep the currency weak.

Oh wait... bureaucrats? Central Wankers? Waking up to reality? What am I thinking???.

US Dollar Index81.57-0.25-0.31%
Australian Dollar0.77690.00460.6%
Swiss Franc1.1386-0.0011-0.1%
Canadian Dollar0.8450.00220.26%

European Markets

France's benchmark CAC-40 Index posted a rise of 42.96 points (1.14%), at 3796.71; the German DAX-30 Index gained 60.03 points (1.45%), to 4186.03; and in the UK, the FTSE-100 Index added 32.5 points (0.69%), to 4735.7 points.

EuroRant has stalled - the data tables looked "skew-wiff" and so I ditched the attempt to roll it out today. now it can wait unti after Friday's session.

Tonight's Pivots (US Futures Market)

R2106831200.931626111 24/32
R1106321195.471614.5111 11/32
Pivot105481186.731597.5111 1/32
S1104971181.271586110 20/32
S2104131172.531569110 10/32