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Economic Statistics
It was a pretty data-rich night: by and large the data were neutral, with the exception of one number that has the markets fascinated at the moment.
I love the word "fascinated", because it's a pretty twisted little number . It's rude, it's pagan, it's just everything you want to be®.
Why rude? Simply where it comes from - its etymology.
It derives from the Latin fascinum, which was a large pole (I know, it's getting phallic already, and it doesn't stop there, believe me). Devotees (women, mostly - but also some slim and tidy "confirmed bachelors") used to stare at the fascinum for long periods of time, eventually reaching a state of disembodied ecstasy.
So that's what fascinated means. I never get fascinated - I'm neither slim nor tidy.
I promise - no more digressions from now on (until the next one).
MBA Purchase Appplications dropped 3.6% to 471.1; however the Refinancing component rose 5.7%, reversing a 2-week decline. Mortgage rates continue to hold the line, which is the primary reason that everything is not going to hell in the housing (and homebuilding) market.
National Income and Product Accounts (NIPA) After-tax Corporate Profits were reported as growing 5.8% year on year, which is dreadfully slow if it translates into a stock-market earnings growth measure. Thankfully (for the bulls) it doesn't... for a start the whole "after tax" idea implies paying tax, which is only done by doofuses who run hamburger shops and others who can't afford to shift offshore.
The revised GDP numbers came in at 4% "real" growth (which beat expectations by a tick... consensus called for 3.9%). As Bill Gross has previously helped me by pointing out a year after I pointed it out, a number like 4% actually means 2.7%-3% actual "real" growth, but is massaged upwards thanks to hedonic indexing. The GDP deflator came in at 1.4%, was higher than the consensus estimate (1.3%) but lower than reality (which, accounting for hedonics again, was about 2.4% at least).
None of these numbers mattered - everybody is fascinated by all things oil.
The EIA Petroleum Status report showed Crude inventories up 2.1m barrels, which nobody expected. Actually, nobody expected anything, because nobody compiles a consensus estimate for this now-important number. Still, it was the largest inventory build for some time, and the oil market bulls hated it. Everything went berserk as soon as the number was released... or did it?
As it happens, only stocks and oil reacted. Bonds, Gold, Currencies all treated the number with disdain. So the oil market - which has a whole slew of newbie oil longs - got thrashed again, and equity nuffnuffs got talked into "lower oil is good for stocks" by BubbleVision and to rest of the stock pimps.
Tomorrow is a big-ticket day for data as well - the table below shows the release schedule and the consensus estimates.
| Release Time (ET) | Period | Data | Expected | Previous |
| 8:30 | 18-Dec week | Initial Jobless Claims | +18K | -43K |
| 8:30 | Nov | Personal Income | 0.002 | 0.006 |
| 8:30 | Nov | Personal Spending | 0.003 | 0.007 |
| 8:30 | Nov | Durable Goods | 0.006 | -0.011 |
| 9:45 | Dec | Univ of Michigan Consumer Sentiment | 95.8 | 95.7 |
| 10:00 | Nov | New Home Sales | -0.007 | 0.002 |
| 10:00 | 40878 | DJ-BTM Business Barometer | -0.002 |
Federal Reserve Open Market Operations
The Fed's Open Market Operations desk performed a single repurchase operation last night:
- a $3.25billion, 2-day repurchase with a paltry $0.658billion in T-backed collateral .
No sauce for da Boyz, plus the market-fascinating oil inventory report, meant that no longs should have been initiated at 10 a.m.; thatturned out to be a sensible thing to do (there was plenty of time to get long after the oil report).
Major US Indices
As I mentioned above, not a lot happened until the oil inventories report. Then, all hell broke loose (upwards in stocks, and downwards in oil).
To get some idea of just how "single issue" this data was for stocks, check out the series of charts below...
First, the chart that started it all... Oil:
The move in the oil market wasn't a huge surprise; there is a lot of new, dumb money, and most of it is long. Look at any Commitment of Traders report and you will see "non-reportable" long positions climbing... a lot of that is newcomers to the commodities markets, who are thinly funded and don't fully appreciate that leverage can hurt you if you're not diligent.
The Dow & the S&P reacted immediately too...
If the oil number was genuinely important, you would have expected inflation-sensitive and economically-sensitive things to move - like, say, Gold...
Or maybe Bonds...
Hmmm... nothing there... what about currencies (like the Euro?... ...
In other words, the dumber the constituency, the bigger the response. There are some dumb FX, Gold and Bonds traders out there, to be sure - but as a proportion of the total market they are almost insignificant.
By the close, the DJIA had posted a rise of 56.46 points (0.52%), closing out the day at 10815.89 points; that's a new high for the yeasr, albeit a marginal one (the previous year high was the previous session, and you had to go back to the start of the year - when the Dow hit 10753 in traday - to get the prior high.
The broader S&P500 added 4.12 points (0.34%), ending the day at 1209.57; the futures fulfilled out expectations of a move to 1212-1215 perfectly, hitting 1214.50 intraday. The only problem was the lack of a decent pullback - I had expected it to pull back to 1205, but it only got down to 1206.75.
Over at Times Square, the Nasdaq Composite advanced 6.12 points (0.28%), to close at 2157.03, while larger-cap technology issues fared worse with the Nasdaq100 adding 4.31 points (0.27%), to end at 1613.57 points.
NYSE Volume was chunky, with 1.39 billion shares changing hands, while Nasdaq Volume was fairly chunky, with 1.81 billion shares being shifted from one online brokerage account to another (and back again, in all likelihood).
| Index | Close | Gain(Loss) | % |
| DJIA | 10815.89 | 56.46 | 0.52% |
| S&P500 | 1209.57 | 4.12 | 0.34% |
| Nasdaq Composite | 2157.03 | 6.12 | 0.28% |
| Nasdaq100 | 1613.57 | 4.31 | 0.27% |
| NYSE Volume | 1.39bn | - | - |
| Nasdaq Volume | 1.81bn | - | - |
Bellwethers
My 9-stock "bellwethers" group rose by an average of 0.65%, thanks in large part to a bounce in Fannie Mae aftrer it fired its two top honchos (Oh, my mistake... they "retired" - and of course the accounting shenanigans had nothing to do with it). Also, the most manipulated large-cap stock in the entire US market - Citigroup - was also given a damned good goosing.
- Intel (INTC) -$0.04 (0.17%) to $23.45;
- Cisco Sys (CSCO) -$0.04 (0.21%) to $19.32;
- Fannie Mae (FNM) +$1.57 (2.23%) to $71.92;
- Freddie Mac (FRE) +$0.64 (0.89%) to $72.44;
- Wal Mart Stores (WMT) +$0.37 (0.7%) to $52.97;
- Citigroup Inc (C) +$1.12 (2.37%) to $48.31;
- IBM (IBM) +$0.59 (0.61%) to $97.61;
- Ebay Inc (EBAY) -$0.28 (0.25%) to $113.42;
- Gen Electric Co (GE) -$0.11 (0.3%) to $36.84;
Market Breadth & Internals
NYSE advancing issues exceeded decliners by 1977 to 1366 for a single-day A/D reading of 611;that's ebullient, but not utterly mindless. Nasdaq gainers trumped losers by 1733 to 1387.
NYSE advancing volume exceeded volume in decliners by 855.66 to 496.55 million shares; Nasdaq advancing volume was greater than volume in decliners by 602.85 to 385.08 million shares.
291 NYSE-listed stocks rose to new 52-week highs, and 2 posted fresh 52-week lows, while on the Nasdaq there were 147 stocks that hit new 52-week highs, and 7 which fell to fresh 52-week lows
| NYSE | Nasdaq | |
| Advancers | 1977 | 1733 |
| Decliners | 1366 | 1387 |
| Advancing Volume (m) | 855.66 | 602.85 |
| Declining Volume (m) | 496.55 | 385.08 |
| New Highs | 291 | 147 |
| New Lows | 2 | 7 |
Market Sentiment
In the leadup to the long weekend, it's normal for the options volume to dry up - after yesterday's ludicrous 0.39 Put-Call Ratio was replaced by a much tamer 0.71. The VIX and the SPX-VIX ratio are stil screaming "Sell! SELL... FOR GOD'S SAKE, SELLLLLL"... or words to that effect. But we already know that the S&P futures will hit 1220 before year end, so selling would be silly.
| Index | Close | Gain(Loss) | % |
| Equity Call Volume (000) | 2014.79 | -1546.42 | -43.42% |
| Equity Put Volume (000) | 1439.91 | -775.01 | -34.99% |
| CBOE Volatility Index | 11.45 | -0.82 | -6.68% |
| CBOE Nasdaq Volatility Index | 17.15 | -1.45 | -7.8% |
| Equity Put-Call Ratio | 0.71 | 0.09 | 14.91% |
| 10-day PCR | 0.57 | 0 | 0% |
| SPX-VIX Ratio | 105.64 | 7.58 | 7.73% |
Bond Market Analysis
Bonds fell a teensy bit at the long end, with the yield on the benchmark 30-year Treasury bond rising 5 basis points to 4.828%. All in all it was a wash - to be expected when tomorrow is only a half-day in teh bond market.
| Index | Close | Gain(Loss) | % |
| UST 13wk (yld) | 2.172 | -0.02 | -1.14% |
| UST 2Y (yld) | 2.991 | 0.013 | 0.44% |
| UST 5Y (yld) | 3.557 | -0.01 | -0.22% |
| UST 10Y (yld) | 4.197 | 0.012 | 0.29% |
| UST 30Y (yld) | 4.828 | 0.005 | 0.1% |
The Banks Index advanced 0.61 points (0.59%), to 104.23; within the index,
- Citigroup Inc (C) +$1.12 (2.37%) to $48.31;
- US Bancorp (USB) +$0.64 (2.07%) to $31.52;
- Bank Of N Y (BK) +$0.40 (1.2%) to $33.70;
- Washington Mutual (WM) +$0.49 (1.18%) to $42.00;
- Bank Of America (BAC) +$0.49 (1.06%) to $46.80;
The Broker-dealer Index gained 0.64 points (0.42%), to 151.44; the ticket clippers lined up as follows -
- E*Trade (ET) +$0.30 (2.04%) to $15.00;
- Jeffries Group (JEF) +$0.60 (1.54%) to $39.60;
- Morgan Stanley (MWD) +$0.58 (1.06%) to $55.08;
- Merrill Lynch (MER) +$0.31 (0.52%) to $59.56;
- Ameritrade (AMTD) +$0.04 (0.28%) to $14.25;
The Philadelphia SOX (Semiconductor) index dipped 0.35 points (0.08%), closing at 424.05
- Marvell Tech (MRVL) -$0.35 (1%) to $34.60;
- National Semiconductor (NSM) -$0.13 (0.73%) to $17.57;
- ST Microelectronic (STM) -$0.13 (0.67%) to $19.19;
- Freescale Semi (FSL-B) -$0.09 (0.51%) to $17.69;
- K L A-Tencor (KLAC) -$0.23 (0.5%) to $45.83;
Gold & Silver Markets
Gold fell by $3.80 (0.85%) to close at $441 per ounce.
Gold Bugs Index shed 1.58 points (0.73%), closing at 214.64
- Randgold (GOLD) -$0.30 (2.62%) to $11.17;
- Iamgold (IAG) -$0.17 (2.52%) to $6.58;
- Eldorado Gold (EGO) -$0.07 (2.37%) to $2.88;
- Harmony Gold (HMY) -$0.17 (1.81%) to $9.23;
- Newmont (NEM) -$0.72 (1.58%) to $44.73;
Silver fell by $0.04 (0.58%) to close at $6.84 per ounce. The Gold and Silver Index (XAU) lost 0.87 points (0.87%), to end the session at 99.12 points.
- Harmony Gold (HMY) -$0.17 (1.81%) to $9.23;
- Newmont (H (NEM) -$0.72 (1.58%) to $44.73;
- Gold Fields (GFI) -$0.14 (1.1%) to $12.61;
- Placer Dome (PDG) -$0.20 (1.06%) to $18.65;
| Index | Close | Gain(Loss) | % |
| Gold | 441.00 | -3.80 | -0.85% |
| Silver | 6.835 | -0.04 | -0.58% |
| PHLX Gold and Silver Index | 99.12 | 0.86 | 0.88% |
| AMEX Gold BUGS Index | 214.64 | 0.76 | 0.36% |
Oil Market
The AEI oil Inventories data knocked the stuffing out of the oil price; ten minutes before the data, the crude oil front-month was trading up about a dime; five minutes after the data it was trading down about a buck. I've mentioned the possible changes in the picture-word exchange rate before... it was set at 1000 some time ago, and that was the rate quoted by David Gates in 1971 (the year that the US closed its Gold window). Technological change and productivity enhancements have probably altered it, but I still like using graphs, and I think that the little collection earlier in the Rant showed that only equity morons and the oil market itself (now full of new nuffnuffs) thought the AEI data was remotely important.
Oil lost ground, shedding $1.49 per barrel, closing at $44.20 per barrel. The Oil and Gas Index (XOI) dipped 5.86 points (0.81%), to end the session at 718.59, led lower by -
- Kerr Mcgee (KMG) -$1.60 (2.67%) to $58.27;
- Unocal (UCL) -$0.83 (1.91%) to $42.55;
- Sunoco (SUN) -$1.03 (1.24%) to $81.85;
- Varco (VRC) -$0.78 (2.6%) to $29.17;
- Transocean (RIG) -$1.07 (2.49%) to $41.92;
- Nabors (NBR) -$1.26 (2.37%) to $51.82;
| Index | Close | Gain(Loss) | % |
| Reuters CRB | 282.5 | 1 | 0.36% |
| Crude Oil Light Sweet | 44.20 | -1.49 | -3.26% |
| AMEX Oil Index | 718.59 | 2.33 | 0.33% |
| Oil Service Index | 124.4 | 0.76 | 0.61% |
Currency Markets
| Index | Close | Gain(Loss) | % |
| US Dollar Index | 82.02 | -0.05 | -0.06% |
| Euro | 1.3388 | 0.0025 | 0.19% |
| Yen | 104.21 | -0.15 | -0.14% |
| Sterling | 1.9139 | -0.013 | -0.67% |
| Australian Dollar | 0.7637 | -0.0008 | -0.1% |
| Swiss Franc | 1.1526 | -0.001 | -0.09% |
| Canadian Dollar | 0.8053 | -0.0064 | -0.79% |
European Markets
France's benchmark CAC-40 Index added 36.12 points (0.96%), to 3806.15 points; the German DAX-30 Index advanced 26.89 points (0.64%), at 4241.28; and in the UK, the FTSE-100 Index added 44.4 points (0.94%), to 4777.4 points.
| Index | Close | Gain(Loss) | % |
| CAC-40 | 3806.15 | 36.12 | 0.96% |
| DAX-30 | 4241.28 | 26.89 | 0.64% |
| FTSE-100 | 4777.4 | 44.4 | 0.94% |
