Interdum stultus opportuna loquitur...

Wednesday, December 15, 2004

USRant: A Lotta Volume, But Not Much Movement

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Economic Statistics

MBA Purchase Applications were weaker than expected at 488.9, although low long-term bond rates continue to provide a floor for the mortgage market.

Within the MBA's report, the Refinance index dipped 2 percent to 1852.4. Refi is now 47% of total mortgage applications, which tells you something about the housing market.

The EIA's Petroleum Status Report showed a surprise decline in Crude oil inventories with crude stocks falling 0.1m barrels to 293.8m barrels - still about the mid-point of the seasonal range. Heating Oil inventories were unchanged at about 119m barrels; given the recent downward spike in temperatures in the NorthEast, this is pretty bullish for crude (which took off today with a gain of over 4%).

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 -

  • a $5b, overnight repurchase with $3.918b in T-backed collateral .
As readers are all aware by now, unless there's $5b or more in T-backed, the stock indices are expected to go nowhere... and although there was an interesting rally from the mid-morning low (8 points in all, half of which came in one 5-minute spurt at the end of lunchtime), there as never going to be genuine traction without some of Uncle Al's Market Elixir and Tonic.

Major US Indices

Well, when the S&P was trading down in the 1180s I flagged 1200 as the minimum target for the next swing, and on Monday I pointed out that 1210 should be hit this week. Toady it hit 1209.50 and I am calling that "close enough". From here there is still the unfinished 1220 mark for any putative year-end rally, however the market looks stale and only concerted efforts by da Boyz are providing any lipstick for the pig.

The DJIA rose 15 points (0.14%), closing out the day at 10691.45 points; the broader S&P500 gained 2.34 points (0.19%), ending the day at 1205.72. If if hadn't been for Lehman Brothers releasing better than expected earnings, the sticky situation that was caused by the spike in Crude Oil might actually have done some genuine damage to the stock indices.

Over at Times Square, the Nasdaq Composite advanced 2.71 points (0.13%), to close at 2162.55, while larger-cap technology issues fared worse with the Nasdaq100 losing 3.83 points (0.24%), to end at 1623.63 points.

NYSE Volume was chunky, with 1.69 billion shares changing hands, while Nasdaq Volume was super-chunky (over 2 bill), with 2.35 billion shares being zapped around cyberspace... to almost nobody's advantage, when you examine the closing print..

Nasdaq Composite2162.552.710.13%
NYSE Volume 1.69b --
Nasdaq Volume 2.35b --


My 9-stock "bellwethers" group rose by an average of 0.38%

  • General Electric Co (GE) +$0.01 (0.03%) to $37.39;
  • Intl Bus Machine (IBM) +$0.02 (0.02%) to $97.33;
  • Ebay Inc (EBAY) +$1.18 (1.02%) to $117.39;
  • Citigroup (C) +$0.44 (0.94%) to $47.31;
  • Cisco Systems (CSCO) +$0.12 (0.62%) to $19.40;
  • Freddie Mac (FRE) +$1.00 (1.45%) to $69.76;
  • Fannie Mae (FNM) +$0.30 (0.43%) to $70.69;
  • Intel Corp (INTC) -$0.10 (0.43%) to $23.14;
  • Wal-Mart Stores (WMT) -$0.35 (0.66%) to $53.03;

Market Breadth & Internals

Advancing issues dominated proceedings on the NYSE, exceeding decliners by 2279 to 1070 for a single-day A/D reading of 1209; Nasdaq gainers trumped losers by 1831 to 1307.

NYSE advancing volume exceeded volume in decliners by 1111.3 to 541.52 million shares - a ratio of over 2:1, despite almost no movement in the headline indices. This pretty much means that tomorrow is likely to be a down day. Nasdaq advancing volume was greater than volume in decliners by 709.74 to 603.95 million shares.

265 NYSE-listed stocks rose to new 52-week highs, and none posted fresh 52-week lows, while on the Nasdaq there were 154 stocks that hit new 52-week highs, and 7 which fell to fresh 52-week lows.

Advancing Volume (m)1111.3709.74
Declining Volume (m)541.52603.95
New Highs265154
New Lows07

Market Sentiment

Equity Call Volume (m) 3.22 0.16 5.11%
Equity Put Volume (m) 1.74 0.05 3.24%
CBOE Volatility Index12.35-0.38-2.99%
CBOE Nasdaq Volatility Index18.770.191.02%
Equity Put-Call Ratio0.54-0.01-1.78%
10-day PCR0.570.0213.81%
SPX-VIX Ratio97.633.13.28%

Bond Market Analysis

The yield curve is getting a bit too flat, in my view; the short end is rising as a result of term structure arbitrage from the new higher Fed Funds rate, but the long end is weakening (in yield terms) as efforts are made to keep the mortgage market afloat.

The yield on the benchmark 30-year Treasury bond shedding 7.3 basis points to 4.705%; bear in mind that it's only a couple of weeks ago that it touched 5%; the 30bps move down smacks of deliberate intervention by somebody.

UST 2Y (yld)2.9240.020.55%
UST 5Y (yld)3.462-0.118-3.3%
UST 10Y (yld)4.068-0.17-3.92%
UST 30Y (yld)4.705-0.2-4.08%

The Banks Index added 0.45 points (0.44%), at 103.18; within the index,

  • MBNA Corp (KRB) +$0.75 (2.78%) to $27.70;
  • State Street (STT) +$1.12 (2.38%) to $48.19;
  • Fifth Third Bancorp (FITB) +$0.60 (1.26%) to $48.10;
  • Northern Trust (NTRS) +$0.61 (1.26%) to $49.17; and
  • Citigroup (C) +$0.44 (0.94%) to $47.31.

The Broker-dealer Index rose 0.57 points (0.37%), to end the session at 152.64; the ticket clippers lined up as follows -

  • Lehman Bros (LEH) +$2.25 (2.63%) to $87.90;
  • Jefferies Group (JEF) +$0.87 (2.18%) to $40.77;
  • Merrill Lynch (MER) +$0.92 (1.53%) to $61.03; and
  • Morgan Stanley (MWD) +$0.82 (1.5%) to $55.53.

The Philadelphia SOX (Semiconductor) index gained 1.02 points (0.24%), to 434.04

  • Freescale Semiconductor B (FSLb) +$0.51 (2.91%) to $18.06;
  • Micron Tech (MU) +$0.19 (1.63%) to $11.84;
  • Marvell Tech (MRVL) +$0.51 (1.46%) to $35.40;
  • Broadcom (BRCM) +$0.45 (1.4%) to $32.55;
  • Infineon Techs (IFX) +$0.15 (1.38%) to $11.05;

Gold & Silver Markets

Gold rose $5.1 (1.17%) to close at $4.41 per ounce. The Gold Bugs Index posted a rise of 3.41 points (1.58%), to end the session at 219.38, led by

  • Iamgold Corp (IAG) +$0.63 (9.65%) to $7.16;
  • Coeur D'Alene (CDE) +$0.17 (4.17%) to $4.25;
  • Meridian Gold (MDG) +$0.66 (3.67%) to $18.66;
  • Hecla Mining Co (HL) +$0.12 (2.04%) to $5.99; and
  • Golden Star Resources (GSS) +$0.06 (1.7%) to $3.59.

Silver rose $0.13 (1.86%) to close at $6.84 per ounce. The Gold and Silver Index (XAU) gained 0.85 points (0.86%), to 100 points.

  • Meridian Gold (MDG) +$0.66 (3.67%) to $18.66;
  • Durban Roodepoert Deep (DROOY) +$0.05 (3.12%) to $1.62;
  • Barrick Gold (ABX) +$0.42 (1.82%) to $23.45;
  • and
  • Goldcorp Inc (GG) +$0.19 (1.38%) to $13.98.
PHLX Gold and Silver Index100-2.4-2.34%
AMEX Gold BUGS Index219.38-5.24-2.33%

Oil Market

Oil was firmer after the unexpected inventory drawdown. The front-month crude oil contract rose $2.26 per barrel on NYMEX, closing at $44.36 per barrel. The Oil and Gas Index (XOI) added 8.32 points (1.16%), at 725.16

  • Sunoco Inc (SUN) +$3.64 (4.51%) to $84.39;
  • Amerada Hess (AHC) +$1.47 (1.76%) to $85.09;
  • Occidental Pete (OXY) +$0.99 (1.75%) to $57.50;
The Oil service stocks (OSX) Index rose 1.92 points (1.57%), to end the session at 124.3
  • Tidewater Inc (TDW) +$1.64 (4.79%) to $35.89;
  • BJ Services Co (BJS) +$1.10 (2.35%) to $47.90;
  • Cooper Cameron (CAM) +$1.05 (2.02%) to $53.00;
Reuters CRB2833.851.38%
Crude Oil Light Sweet44.362.265.37%
AMEX Oil Index725.166.910.96%
Oil Service Index124.324.413.68%

Currency Markets


US Dollar Index81.76-0.68-0.82%
Australian Dollar0.7640.00720.95%
Swiss Franc1.1417-0.0124-1.07%
Canadian Dollar0.81620.00760.94%

European Markets

France's benchmark CAC-40 Index slid 11.4 points (0.3%), to 3802.99 points; the German DAX-30 Index dipped 17.61 points (0.42%), ending the day at 4213.69; and in the UK, the FTSE-100 Index advanced 5.4 points (0.11%), to end the session at 4728.2 points.


Tonight's Pivots (US Futures Market)

R2107491210.971646.33115 7/32
R1107221208.231634.67115 2/32
Pivot106811203.771624.33114 27/32
S1106541201.031612.67114 22/32
S2106131196.571602.33114 15/32