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Economic Statistics
There was a sew of economic data released before the market opened last night - a good deal of it was positive for the stocks of home-builders, which are an important guage (at the moment) for the drama unfolding in the US mortgage market.
The Mortgage Bankers Association's Purchase Applications Index leapt a massive 14% to 448.1, and the refinancing component of the index shot up 19% to 2,048.6.
Housing starts rose 10.9% in December to 2.004 million units (annualised), exceeding expectations of 1.9million by a wide mark. That's the biggest increase since 1998, and October and November were revised upwards as well. Housing completions rocketed 12.5% to an annualised rate of 1.946 million, and homes under construction rose by a little over 1% to 1.278 million annnualised. The Housing completion rate is the highest in 34 years.
Single-occupancy starts rose 13.1%, and all regions had strong gowth.
Permits - for which there is no consensus guess - fell 0.3% but are still showing an annualised rate of 2.021 million units.
ISCS-UBS Chain Stores Sales data indicated that sales dropped for the second week in a row, down 0.9% for the week, which dragged the year-on-year comparison down 0.3% to 4.1%y/y.
The weekly Redbook data measures similar spending to the ICSC-UBS data, but with a different sample; it disagreed with the ICSC numbers, and actually showed an increase in sales. However the Redbook - despite showing sales as being slightly above plan for the year so far, also shows annual growth of just 3.3%. In other words (see the CPI report below) chain store sales are only growing in line with inflation.
You can bet your sweet bippy that a whole lot of the post-Christmas sales volume was undertaken at steep discounts - which will impact retailer margins. Still, since those numbers aren't in the data release table, no journalist is going to bother thinking that hard.
The Consumer Price Index fell 0.15 at the headline levels as compared with expectations for a rise of 0.1%. The "core" CPI - excluding food and energy - rose 0.2% which was in line with consensus (0.2%). The headline CPI is 3.3% higher than a year ago (i.e., the "looking backwards" inflation rate is 3.3%).
Energy prices - which declined in a pretty-much orchestrated election feelgood manipulation - dropped 1.8% for the month, which is what contributed heavily to the headline decline in the monthly number. The CPI Energy component is sitll up over 16% for the year, and Crude Oil prices are no longer on the wane.
The core CPI is now showing a 2.2% annual rate.
New Jobless Claims data showed that 319000 new folks lined up to collect unemployment insurance last week - this was well below the expected 345,000, and in fact was below the bottom end of the consensus range (333,000 to 355,000).
Continuing claims rose strongly, however - up 47,000 to 2.694 million (the continuing claims data always cover the prior week).
The Treasury held its routine 4-week bill auction, and demand for the
reduced amount (only $8 billion) was reasonably strong. The auction cleared
at 1.91%, 7 basis points lower than the prior week. The bid-to-cover was was
very strong at 3.54x - but it has been at or above 3x since the fall in weekly
auction size from the $18 billion level.
Federal Reserve Open Market Operations
The Fed's Open Market Operations desk performed 1 repurchase operation last night:
- a $5.5billion, overnight repurchase with $4.381billion in T-backed collateral .
The rule is (loosely) that if the Fed doesn't provide $5 bill in T-backed collateral, the market has almostr zero hope of rising meaningfully during the day session. And so it proved to be: despite data that was pretty positive, the market opened with a hiss and a roar (putting the "dumb money at work" sign out), but the futures market failed to get past the high it had set during the overnight (Globex) session.
From there on out, it was weak, weak, weak. As I outlined in the Weekly Sentiment e-mail, this week was supposed to be characterised by early strength which would fail to hold intraday - especially if Uncle Easy doesn't play nice with the repo dough.
Major US Indices
Check out the chart - opening orgasm, no Fed Pump at 10 a.m. NY time, and then just a sagging sad bendejo of a day.
Intraday 15 minute chart
If you thought that the intraday price action was bad, you should see what happened after the close - the S&P futures re-opened down over 6 points, back to 1176 and change, and Nasdaq futures are down 16 as I write.
The afternoon selling wasn't so much "relentless" as "inescapable". And there is no way it could be characterised as a "selling panic" or a "capitulation", either - TICK wasn't negative enough. It was just a slow bleed, and - reference the sentiment e-mail - everything about this week so far was pretty predictable given the tensions in the market (weekly overbought, daily oversold)... "an early bounce that fail..." is the only quote that springs immediately to mind.
DJIA dipped 88.82 points (0.84%), closing out the day at 10539.97 points; the broader S&P500 shed 11.35 points (0.95%), ending the day at 1184.63.
Over at Times Square, the Nasdaq Composite slid 32.45 points (1.54%), to close at 2073.59, while larger-cap technology issues fared worse with the Nasdaq100 losing 27.84 points (1.77%), to end at 1545.65 points.
NYSE Volume was chunky, with 1.5 billion shares changing hands, while Nasdaq Volume was super-chunky (over 2 bill), with 2.24 billion shares being shifted from one online brokerage account to another (and back again, in all likelihood).
| Index | Close | Gain(Loss) | % |
| DJIA | 10539.97 | -88.82 | -0.84% |
| S&P500 | 1184.63 | -11.35 | -0.95% |
| Nasdaq Composite | 2073.59 | -32.45 | -1.54% |
| Nasdaq100 | 1545.65 | -27.84 | -1.77% |
| NYSE Volume | 1.5bn | - | - |
| Nasdaq Volume | 2.24bn | - | - |
Bellwethers
My 9-stock "bellwethers" group fell by an average of 1.88%; not a single one of them rose, and the more suspect the business, the less freidnly the price was to a portfolio which includes them (and no portfolio should include any of them, in my view: they are speculation bellwethers).
- IBM (IBM) -$1.80 (1.9%) to $93.10;
- Ebay (EBAY) -$3.32 (3.12%) to $103.05;
- Freddie Mac (FRE) -$0.72 (1.03%) to $69.41;
- Wal Mart (WMT) -$0.71 (1.3%) to $53.78;
- General Electric (GE) -$0.52 (1.45%) to $35.44;
- Citigroup (C) -$0.13 (0.27%) to $48.01;
- Intel (INTC) -$0.34 (1.48%) to $22.60;
- Cisco Systems (CSCO) -$0.59 (3.15%) to $18.15;
- Fannie Mae (FNM) -$2.27 (3.26%) to $67.43;
Market Breadth & Internals
NYSE declining issues beat out advancers by 2047 to 1330, for a single-day A/D reading of -717; Nasdaq losers exceeded gainers by 2126 to 995.
On the NYSE declining volume was greater than volume in advancing issues by almost 3:1, 1112.03 to 362.31 million shares; On the Nasdaq declining volume exceeded volume in advancing issues by over 3:1 - 939.87 to 279.1 million shares.
123 NYSE-listed stocks rose to new 52-week highs, and 12 posted fresh 52-week lows, while on the Nasdaq there were 65 stocks that hit new 52-week highs, and 21 which fell to fresh 52-week lows
| NYSE | Nasdaq | |
| Advancers | 1330 | 995 |
| Decliners | 2047 | 2126 |
| Advancing Volume (m) | 362.31 | 279.1 |
| Declining Volume (m) | 1112.03 | 939.87 |
| New Highs | 123 | 65 |
| New Lows | 12 | 21 |
Market Sentiment
| Index | Close | Gain(Loss) | % |
| Equity Call Volume (000) | 2962.4 | 390.84 | 15.2% |
| Equity Put Volume (000) | 2199.82 | 110.95 | 5.31% |
| CBOE Volatility Index | 13.18 | 0.62 | 4.94% |
| CBOE Nasdaq Volatility Index | 19.24 | -0.04 | -0.21% |
| Equity Put-Call Ratio | 0.74 | -0.07 | -8.58% |
| SPX-VIX Ratio | 89.88 | -4.68 | -4.95% |
Bond Market
Bonds rose pretty strongly at the long end, with the yield on the benchmark 30-year Treasury bond shedding a whopping 10.8 basis points to 4.66%. The short end is looking toward the next Fed meeting (February 1st), where another 25bps tightening is being priced in.
| Index | Close | Gain(Loss) | % |
| UST 13wk (yld) | 2.345 | 0.03 | 1.08% |
| UST 2Y (yld) | 3.208 | 0.006 | 0.19% |
| UST 5Y (yld) | 3.701 | 0 | 0.05% |
| UST 10Y (yld) | 4.173 | -0.063 | -1.49% |
| UST 30Y (yld) | 4.66 | -0.108 | -2.27% |
The Banks Index declined 1.01 points (0.99%), to end the session at 100.85; within the index,
- Bank Of NY (BK) -$1.44 (4.37%) to $31.50;
- State Street (STT) -$1.46 (3.14%) to $45.06;
- Northern Trust (NTRS) -$1.14 (2.42%) to $45.90;
- North Fork Bancorp (NFB) -$0.54 (1.93%) to $27.49;
- Mellon Financial (MEL) -$0.53 (1.76%) to $29.63;
The Broker-dealer Index dipped 2.8 points (1.88%), to end the session at 146.09; the ticket clippers lined up as follows -
- Jeffries Group (JEF) -$1.62 (4.03%) to $38.54;
- Raymond James (RJF) -$0.98 (3.28%) to $28.90;
- Ameritrade (AMTD) -$0.39 (3.04%) to $12.46;
- E*Trade (ET) -$0.39 (2.87%) to $13.18;
- Morgan Stanley (MWD) -$1.02 (1.81%) to $55.43;
The Philadelphia SOX (Semiconductor) index declined 8.66 points (2.13%), ending the day at 397.89
- Teradyne (TER) -$0.98 (6.39%) to $14.36;
- Marvell Tech Grouo (MRVL) -$1.43 (4.03%) to $34.08;
- Xilinx Inc (XLNX) -$0.88 (3.24%) to $26.29;
- Applied Materials (AMAT) -$0.52 (3.15%) to $16.01;
- Novellus Systems (NVLS) -$0.82 (3.06%) to $26.00;
Gold & Silver Markets
Gold was basically unchanged at $423.3 per ounce, although it managed an early spike to $327.00. The Gold Bugs Index shed 0.5 points (0.24%), ending the day at 204.3
- Freeport Mcmoran (FCX) -$1.04 (2.72%) to $37.16;
- Coeur d'Alene (CDE) -$0.09 (2.42%) to $3.63;
- Hecla Mining (HL) -$0.10 (1.79%) to $5.48;
- Harmony Gold (HMY) -$0.15 (1.71%) to $8.64; and
- Eldorado Gold (EGO) -$0.03 (1.08%) to $2.74.
Silver fell by $0.05 (0.74%) to close at $6.62 per ounce. The Gold and Silver Index (XAU) lost 0.49 points (0.52%), ending the day at 93.53 points.
- Freeport Mcmoran (FCX) -$1.04 (2.72%) to $37.16;
- Harmony Gold (HMY) -$0.15 (1.71%) to $8.64;
- Durban Roodepoert Deep (DROOY) -$0.02 (1.43%) to $1.38; and
- Anglogold Ashanti (AU) -$0.32 (0.97%) to $32.82.
| Index | Close | Gain(Loss) | % |
| Gold | 423.3 | 0 | 0 |
| Silver | 6.615 | -0.05 | -0.74% |
| PHLX Gold and Silver Index | 93.53 | -1.49 | -1.57% |
| AMEX Gold BUGS Index | 204.3 | -1.47 | -0.71% |
Oil Market
Oil was weaker, falling by $0.56 per barrel, closing at $47.84 per barrel (note: in the NYMEX access market is has fallen to as low as $47.07). The Oil and Gas Index (XOI) slid 2.85 points (0.39%), at 724.8.
- ConocoPhillips (COP) -$0.85 (0.94%) to $89.27;
- Total S.A. (TOT) -$0.93 (0.88%) to $105.27;
- Exxon Mobil (XOM) -$0.45 (0.87%) to $51.05;
- Rowan Cos Inc (RDC) +$0.40 (1.5%) to $27.10;
- Halliburton (HAL) - war profiteer and former employer of Vice President Dick Cheney - +$0.38 (0.91%) to $42.20;
- BJ Services Co (BJS) +$0.34 (0.74%) to $46.20;
| Index | Close | Gain(Loss) | % |
| Reuters CRB | 283 | 1.25 | 0.44% |
| Crude Oil Light Sweet | 47.84 | -0.56 | -1.2% |
| AMEX Oil Index | 724.8 | 11.36 | 1.59% |
| Oil Service Index | 126.53 | 4.06 | 3.32% |
Currency Markets
| Index | Close | Gain(Loss) | % |
| US Dollar Index | 83.65 | 1.45 | 1.76% |
| Euro | 1.3011 | -0.0244 | -1.84% |
| Yen | 102.7 | 0.35 | 0.34% |
| Sterling | 1.8715 | -0.0193 | -1.02% |
| Australian Dollar | 0.7606 | -0.0058 | -0.76% |
| Swiss Franc | 1.185 | 0.0173 | 1.48% |
| Canadian Dollar | 0.8144 | -0.0178 | -2.14% |
European Markets
France's benchmark CAC-40 Index slid 6.01 points (0.16%), closing at 3869.01; the German DAX-30 Index declined 5.16 points (0.12%), at 4245.55; and in the UK, the FTSE-100 Index dipped 5.6 points (0.12%), to 4818.3.
| Index | Close | Gain(Loss) | % |
| CAC-40 | 3869.01 | -6.01 | -0.16% |
| DAX-30 | 4245.55 | -5.16 | -0.12% |
| FTSE-100 | 4818.3 | -5.6 | -0.12% |
Tonight's Pivots (US Futures Market)
| Dow | S&P500 | Nasdaq | Bonds | |
| R2 | 10665 | 1200.53 | 1588.83 | 114 31/32 |
| R1 | 10598 | 1191.87 | 1565.17 | 114 15/32 |
| Pivot | 10562 | 1187.53 | 1553.33 | 114 |
| S1 | 10495 | 1178.87 | 1529.67 | 113 16/32 |
| S2 | 10459 | 1174.53 | 1517.83 | 113 1/32 |
