Interdum stultus opportuna loquitur...

Friday, December 24, 2004

USRant: Now We Wait For Santa...

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 ever late... I fell asleep at the wheel after spending a few hours playing around with settings on the forums and giving a few folks some admin privileges.

Well, off we trot...

Economic Statistics

Another data-rich day;

Durable goods rose 1.6% which beat the consensus guess (0.7%) by a wide margin; in fact it was outside the upper boundary of the consensus range (-1.0-+1.5%). The headline number was biased due to a bulge in airline orders; once those were backed out, new orders ex-transportation fell 0.8% - and that's on the heels of a 1.3% drop last month.

Our key measure is (repeat after me)

Non-defence capex ex-aircraft.

They were actually not too bad - up 1.8% for the period.

New Jobless Claims were expected to jump by 17,000, and jump they did. By 17,000, as it happens. 333,000 people filed for unemployment benefits in the last week, and the number of continuing claims was pretty steady at 2.721million (the continuing claims number refers to the prior week).

Personal Income rose 0.3%, beating expectations of a 0.2% rise. Personal Spending also rose 0.2%, which was in line with expectations. The savings rate rose to a mammoth (I'm being sarcastic) 0.3%... and given that the distribution of income and expenditure in the US is monstrously skewed, you can bet that the savings rate is a decent-sized negative number for people on average earnings and below (that's 65% of all income earners, just quietly - although surveys show that 65% of all people think that they are in the top 10%)

The University Of Michigan Consumer Sentiment survey increased to 97.1 (this is the "final" for the month, and is a revision to the mid-month figure of 95.7 which also serves as the consensus estimate).

The real stinker of the day was New Home Sales, which had their biggest fall in 10 years, and was much worse than consensus. They fell 12% overall, but fell 39% (yes, that's 3 lots of ten and 9 lots of one, not 3.9 or 0.39 or anything trivial) in the MidWest.

Did the market care about any of this, do you think? Not one iota, Virginia... not a jot. The market did what RedMenace expected it to do, and did it without any stir.

Forthcoming US Economic Data

Federal Reserve Open Market Operations

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

  • a $4.5billion, 4-day repurchase with $2.779billion in T-backed collateral; and
  • a $10billion. 14-day repo with $7.966 billion in T-backed.

Ah - at last... Uncle Easy turned on the spigots again... which is why the market digested the horrible housing data without even a blink. The repo "buy time" when repo is that large is 10:00 a.m., and the day session low was set at... go on... guess.

Actually the day-session low was set right at the open, but there was dip back towards it which bottomed at.... go on... guess...

That's right... had you bought at 10 a.m. precisely, you would not have experienced no more than a minute underwater for the rest of the session - as the market ground its way toward RedMenace's target of 1216 (expressed in detail in the forums at 7:14 p.m. Australian time - 6 hours before the open).

Examine the chart...

ES 1-minute Intraday Chart

Major US Indices

As you might have expected, once Red's target was reached the market decided it was done for the day. So for the rest of the session the thing flopped around like a landed bass.

The DJIA added 11.23 points (0.1%), closing out the day at 10827.12 points; the broader S&P500 added 0.56 points (0.05%), to 1210.13. Over at Times Square, the Nasdaq Composite advanced 3.59 points (0.17%), to close at 2160.62, while larger-cap technology issues fared worse with the Nasdaq100 adding 0.2 points (0.01%), to end at 1613.77 points.

NYSE Volume was modest, with 0.96 billion shares changing hands, while Nasdaq Volume was also light, with 1.43 billion shares being shuffled in cyberspace.

Nasdaq Composite2160.623.590.17%
NYSE Volume0.96bn--
Nasdaq Volume1.43bn--


My 9-stock "bellwethers" group fell by an average of 0.34% thanks almost entirely to the mortgage sector (Fannie Mae fell 3.2% all by her fat lonesome):

  • General Electric (GE) -$0.07 (0.19%) to $36.77;
  • Wal Mart (WMT) -$0.42 (0.79%) to $52.55;
  • Cisco (CSCO) +$0.13 (0.67%) to $19.45;
  • Intel (INTC) +$0.09 (0.38%) to $23.54;
  • IBM (IBM) +$0.11 (0.11%) to $97.72;
  • Citigroup (C) +$0.44 (0.91%) to $48.75;
  • Ebay (EBAY) -$0.07 (0.06%) to $113.35;
  • Freddie Mac (FRE) -$0.67 (0.92%) to $71.77;
  • Fannie Mae (FNM) -$2.30 (3.2%) to $69.62;

Market Breadth & Internals

On the NYSE advancing Issues exceeded decliners by 1871 to 1398 for a single-day A/D reading of 473; Nasdaq gainers trumped losers by 1732 to 1359; nothing special there, which is no surprise considering that the market is closed tomorrow.

NYSE advancing volume exceeded volume in decliners by 555.65 to 389.92 million shares; Nasdaq advancing volume was greater than volume in decliners by 499.86 to 305.13 million shares.

211 NYSE-listed stocks rose to new 52-week highs, and 1 posted a fresh 52-week low, while on the Nasdaq there were 133 stocks that hit new 52-week highs, and 9 which fell to fresh 52-week lows

Advancing Volume (m)555.65499.86
Declining Volume (m)389.92305.13
New Highs211133
New Lows19

Market Sentiment

The option market has gone all droopy in the last session before Christmas; one interesting thing that smart folks like Bernie Schaeffer have noticed is that the massive open interest in December calls was not entirely rolled over into either the new front month or the December05 period. In other words, big buyers of calls are not opening positions (but nor are big sellers of calls trying to write premium... because volatility is too low).

Equity Call Volume (000)1448.81-565.98-28.09%
Equity Put Volume (000)1000.63-439.37-30.51%
CBOE Volatility Index11.23-0.22-1.92%
CBOE Nasdaq Volatility Index16.8-0.35-2.04%
Equity Put-Call Ratio0.69-0.02-3.37%
10-day PCR0.5700%
SPX-VIX Ratio107.762.122.01%

Bond Market Analysis

Bonds fell at the long end, with the yield on the benchmark 30-year Treasury bond rising 0.9 basis points to 4.838%. the short end rose. The bond market had a half-day, so not much can be read into the outcomes.

UST 13wk (yld)2.152-0.02-0.92%
UST 2Y (yld)2.98300%
UST 5Y (yld)3.5710.010.37%
UST 10Y (yld)4.2140.0170.41%
UST 30Y (yld)4.8380.0120.25%

The Banks Index gained 0.18 points (0.17%), to end the session at 104.41; within the index,

  • Zions Bancorp (ZION) +$0.81 (1.18%) to $69.25;
  • Citigroup (C) +$0.44 (0.91%) to $48.75;
  • Suntrust Banks (STI) +$0.67 (0.91%) to $74.35;
  • Mellon Financial (MEL) +$0.23 (0.74%) to $31.34;
  • M&T Bank Corp (MTB) +$0.54 (0.5%) to $108.01;

The Broker-dealer Index declined 0.03 points (0.02%), at 151.41; the ticket clippers lined up as follows -

  • Ameritrade (AMTD) -$0.16 (1.12%) to $14.09;
  • E*Trade (ET) -$0.12 (0.8%) to $14.88;
  • Charles Schwab (SCH) -$0.06 (0.5%) to $11.95;
  • Legg Mason (LM) -$0.32 (0.45%) to $71.20;
  • Lehman Bros (LEH) -$0.30 (0.34%) to $86.97;

The Philadelphia SOX (Semiconductor) index added 2.38 points (0.56%), at 426.43

  • Marvell Tech (MRVL) +$0.94 (2.72%) to $35.54;
  • National Semiconductor (NSM) +$0.40 (2.28%) to $17.97;
  • Teradyne (TER) +$0.35 (2.16%) to $16.55;
  • Advanced Micro Devices (AMD) +$0.29 (1.33%) to $22.12;
  • Linear Technology (LLTC) +$0.30 (0.79%) to $38.25;

Gold & Silver Markets

Gold rose $1.80 (0.41%) to close at $442.90 per ounce.

Gold Bugs Index added 1.45 points (0.68%), to end the session at 216.09

  • Golden Star (GSS) +$0.26 (6.79%) to $4.09;
  • Randgold (GOLD) +$0.33 (2.95%) to $11.50;
  • Meridian Gold (MDG) +$0.44 (2.4%) to $18.77;
  • Hecla Mining (HL) +$0.14 (2.39%) to $5.99;
  • Coeur d'Alene (CDE) +$0.08 (2.03%) to $4.03;

Silver rose $0.08 (1.17%) to close at $6.92 per ounce. The Gold and Silver Index (XAU) gained 0.18 points (0.18%), to end the session at 99.3 points.

  • Meridian Gold (MDG) +$0.44 (2.4%) to $18.77;
  • Kinross Gold (KGC) +$0.08 (1.15%) to $7.01;
  • Goldcorp (GG) +$0.16 (1.05%) to $15.34;
  • Newmont (NEM) +$0.24 (0.54%) to $44.97;
Gold 442.90 1.80 0.41%
PHLX Gold and Silver Index99.30.180.18%
AMEX Gold BUGS Index216.091.450.68%

Oil Market

Oil shed just 2c a barrel closing at $44.18 per barrel. It traded in a pretty narrow range all night, falling as far as $43.75 and rising as high as $44.38. The Oil and Gas Index (XOI) advanced 4.49 points (0.62%), to 723.08

  • Exxon Mobil Cp (XOM) +$0.68 (1.33%) to $51.97;
  • Total S.A. (TOT) +$1.29 (1.2%) to $109.09;
  • Royal Dutch Pet A (RD) +$0.67 (1.19%) to $56.95;
The Oil service stocks (OSX) Index gained 0.78 points (0.63%), at 125.18

  • Global Inds Ltd (GLBL) +$0.17 (2.07%) to $8.37;
  • Schlumberger Ltd (SLB) +$0.65 (0.98%) to $67.03;
  • Rowan Cos Inc (RDC) +$0.22 (0.85%) to $26.17;
Reuters CRB283.510.35%
Crude Oil Light Sweet0-44.2-100%
AMEX Oil Index723.084.490.62%
Oil Service Index125.180.780.63%

Currency Markets

The Euro hit a new all-time high, and set a record close against the USD, as the housing data made it clear that the Fed's interest rate tightening policy is having pretty dramatic effects on the mortgage market; needless to say, it does not matter a damn what happens to US investment in plant and machinery or to Us incomes, if the housing market falls over with any sort of abruptness: people are so leveraged (particularly those who are in the bottom 70% of income earners, who are the ones who do most of the leveraged spending).

The Yen continues to hold the USD up, although RedMenace managed to nail a half a Yen scalp in the Yen/USD cross last night.

US Dollar Index81.59-0.43-0.52%
Australian Dollar0.76650.00310.41%
Swiss Franc1.144-0.0085-0.74%
Canadian Dollar0.81140.00530.66%

European Markets

France's benchmark CAC-40 Index rose 13.53 points (0.36%), to 3819.68; the German DAX-30 Index posted a rise of 10.34 points (0.24%), closing at 4251.62; and in the UK, the FTSE-100 Index posted a rise of 10.3 points (0.22%), at 4787.7 points.