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Economic Statistics
Economic Data Released Today - North America
| Country | Period | Data | Expected | Actual |
| Canada | Nov | Building Permits | 0.5% | 9.3% |
| US | Nov | Wholesale Inventories | 0.8% | 1.1% |
| US | Dec | Kansas City Fed Index | 2 |
Comments
Canada
Canadian construction plans for November exceeded expectations by a very wide margin, rising more than 18 times the consensus estimate.
The value of building permits issued rose 9.3% to C$5.00 billion in November; consensus had expected just a 0.5% increase.
Residential permits rose 3.5% month-on-month to total C$3.15 billion in November. As with the US, single-family dwellings actually declined, but multi-family units more than compensated for that: this is a manifestation of the "buy to let" market, which is concentrated in apartments.
British Columbia was by far the stand-out province, with permits up 37.5%. Quebec rose 22.8%, followed closely by Alberta with a rise of 21%. Permits in Ontario actually fell 3.3%.
US
The Kansas City Fed report was weaker than the prior month's reading of 6, but to be frank I don't pay any attention to anything produced by the Soviet-syle central planners at any of the Federal meddlers. If Alan Greenspan or any of his "can't survive in the private sector" doofus-chums said it was raining, I would stick my head out the window to check. Then I would buy sunscreen and head to the beach, because in all likelihood they would be wrong. That's why they're bureaucrats - they have a go at being in the private sector, then they fail because of DNA-level incompetence, so they suck at the public teat for the rest of their lives.
But I digress...
Apart from the Fed-warbling (Fed Governor Guynn also babbled incoherently for a while intraday), there was the Wholesale inventories data, which was stronger than expected. Consensus was looking for a rise of 0.8%, but the number arrived and it was 1.1%. Why it's positive for wholesalers to be stocking their shelves rather than actually selling stuff, is beyond me, but there you have it.
There were 2 bond auctions held;
- $19 bill in 3-month bills, which cleared at a yield of 2.33% (up 5.5 basis points from last week's auction) and a bid-to-cover ratio of 2.15x - weaker than the prior week's reading of 2.26x; and
- $16 bill in 6-month bills, which cleared at a yield of 2.60% (up 4bps from the prior week) and a bid-to-cover ratio of 2.48x - down sharply from the 2.80x of the previous week.
Bond Auction Announcements
| Date | Instrument | Amount ($b) |
| Jan-13 | 10-year TIPS | 10 |
| Jan-11 | 4-week bills | 8 |
| Jan-12 | 5-year Notes | 15 |
Data Calendar - Rest of Week
| Day | Time (GMT) | Period | Data | Expected | Actual | |
| Tue | 315 | Canada | Dec | CMHC Housing Starts | 229500 | 238300 |
| Tue | 745 | US | Jan 8th week | ICSC-UBS Store Sales Index | 0.2% | |
| Tue | 855 | US | Jan 8th week | Redbook Retail Sales Index | 0.2% | |
| Tue | 1000 | US | Dec | Richmond Fed Mfg Index | -3 | |
| Tue | 1830 | US | Jan 8th week | ABC/Washington Post Consumer Confidence | -9 | |
| Wed | 330 | Canada | Nov | Trade Surplus | C$4.03B | C$4.35B |
| Wed | 330 | Canada | Nov | New House Prices | 5.2% | 0.2% |
| Wed | 700 | US | Jan 8th week | MBA Refinancing Index | -5.7% | |
| Wed | 830 | US | Nov | Trade Balance | -$53.6B | -$55.46B |
| Wed | 900 | US | Dec | Treausry Budget | -$57.88B |
Federal Reserve Open Market Operations
The Fed's Open Market Operations desk performed a single repurchase operation last night: $7.25billion, overnight repurchase with the entire amount in Treasury-backed collateral.
Well, we know what that means for 10 a.m. NY time, don't we, boys & girls? Yes, the Repo Moonshot. Sure enough, up she went at 10 a.m. on the dot.
Major US Indices
With a decent amount of repo liquor under the belt, the market was likely to start breaking some furniture to the upside starting at 10 a.m.: the better-than-expected Wholesale inventories data provided the journalistic excuse (there has to be a reason for every wiggle...
"Stocks Fall on Rising Oil Prices" and
"Stocks Rise as Rising Crude Helps Oil Majors"
can happen in the same session).
But we know better: no repo - no momentum, and last night there was plenty of repo cash sloshed into the system, so of course the market was going to have a little gyration upwards.
It got through some important resistance levels, too - with the S&P futures breaching 1194 (and 1194.50 - Friday's high) on its way to a high of 1196.75. It got to that level on a massive TICK "spike" to over +1200, which is a dead giveaway of a program trade (and one based on a stop entry, too - short-covering, probably)... the fact that it happened during the lunchtime lull indicates that it was simply a "running of the stops". Check out the chart: Repo Pump, sideways, stop tickling & TICK extreme, then a weak close. 1187 needs to hold during Globex tonight, or the thing will tank tomorrow. If 1187 holds, 1200 will be hit tomorrow. Check out the chart:
S&P Futures Intraday 5 minute chart
The DJIA added 17.07 points (0.16%), closing out the day at 10621.03 points; the broader S&P500 advanced 4.06 points (0.34%), closing at 1190.25. The market faded quite hard in the afternoon, which has been the modus operandi since December 30th.
Over at Times Square, the Nasdaq Composite rose 8.43 points (0.4%), to close at 2097.04, while larger-cap technology issues fared worse with the Nasdaq100 adding 0.11 points (0.01%), to end at 1564.92 points.
NYSE Volume was chunky, with 1.49 billion shares changing hands, while Nasdaq Volume was super-chunky (over 2 bill), with 2.11 billion shares traded.
| Index | Close | Gain(Loss) | % |
| DJIA | 10621.03 | 17.07 | 0.16% |
| S&P500 | 1190.25 | 4.06 | 0.34% |
| Nasdaq Composite | 2097.04 | 8.43 | 0.4% |
| Nasdaq100 | 1564.92 | 0.11 | 0.01% |
| NYSE Volume | 1.49bn | - | - |
| Nasdaq Volume | 2.11bn | - | - |
Bellwethers
My 9-stock "bellwethers" group fell by an average of 0.06%
- General Electric (GE) -$0.09 (0.25%) to $35.91;
- Freddie Mac (FRE) -$0.21 (0.29%) to $71.50;
- Intel (INTC) +$0.08 (0.35%) to $22.88;
- Fannie Mae (FNM) +$0.17 (0.24%) to $70.17;
- Cisco Systems (CSCO) -$0.00 (0%) to $18.72;
- Ebay (EBAY) +$0.73 (0.68%) to $107.31;
- IBM (IBM) -$0.10 (0.1%) to $95.68;
- Wal Mart (WMT) -$0.27 (0.5%) to $53.72;
- Citigroup (C) -$0.31 (0.64%) to $48.34;
Market Breadth & Internals
NYSE advancing Issues exceeded decliners by 2097 to 1244 for a single-day A/D reading of 853; Nasdaq gainers trumped losers by 1690 to 1411.
NYSE advancing volume exceeded volume in decliners by 930.56 to 529.4 million shares; Nasdaq declining volume exceeded volume in advancing issues by 623.71 to 484.16 million shares.
42 NYSE-listed stocks rose to new 52-week highs, and 5 posted fresh 52-week lows, while on the Nasdaq there were 69 stocks that hit new 52-week highs, and 22 which fell to fresh 52-week lows.
| NYSE | Nasdaq | |
| Advancers | 2097 | 1690 |
| Decliners | 1244 | 1411 |
| Advancing Volume (m) | 930.56 | 484.16 |
| Declining Volume (m) | 529.4 | 623.71 |
| New Highs | 42 | 69 |
| New Lows | 5 | 22 |
Market Sentiment
Put volume spiked - and did so pretty much at the low (at some stage I will start posting intraday volume changes for options, but right now it's a pain to do so). Effectively, smart money sold puts into the bid, at or near the low of the day. That gels nicely with my "support at 1187 hypothesis, which will be the working hypothesis for the Globex session (and the early part of tomorrow's day session at this stage).
Volatility is still low enough to mean that long-side trades are very much of the "scalp" variety, though.
| Index | Close | Gain(Loss) | % |
| Equity Call Volume (000) | 2430.8 | -219.37 | -8.28% |
| Equity Put Volume (000) | 1586.13 | -419.71 | -20.92% |
| CBOE Volatility Index | 13.23 | -0.26 | -1.93% |
| CBOE Nasdaq Volatility Index | 19.61 | 0.46 | 2.4% |
| Equity Put-Call Ratio | 0.65 | -0.1 | -13.79% |
| 10-day PCR | 0.57 | 0 | 0% |
| SPX-VIX Ratio | 89.97 | 2.03 | 2.31% |
Bond Market Analysis
Bonds rose at the long end, with the yield on the benchmark 30-year Treasury bond shedding 1.7 basis points to 4.821%. When Fed Governor Gyunn was shooting off his bureaucratic trap, the bond market didn't like what it was a-hearin', and sold off for a while (contrariwise, the stock market liked hearing from one of the market's Fed pom-pom girls). The damage in either direction wasn't too marked, however.
| Index | Close | Gain(Loss) | % |
| UST 13wk (yld) | 2.282 | 0 | -0.17% |
| UST 2Y (yld) | 3.201 | 0.025 | 0.79% |
| UST 5Y (yld) | 3.725 | 0.01 | 0.38% |
| UST 10Y (yld) | 4.273 | 0.002 | 0.05% |
| UST 30Y (yld) | 4.821 | -0.016 | -0.33% |
The Banks Index advanced 0.05 points (0.05%), closing at 102.14; within the index,
- Bank Of America (BAC) +$0.56 (1.25%) to $45.29;
- M&T Bank Corp (MTB) +$1.23 (1.19%) to $104.72;
- Wachovia (WB) +$0.36 (0.69%) to $52.34;
- Comerica (CMA) +$0.37 (0.62%) to $59.63;
- Mellon Financial (MEL) +$0.17 (0.57%) to $30.17;
The Broker-dealer Index added 0.25 points (0.17%), ending the day at 148.29; the ticket clippers lined up as follows -
- Lehman Bros (LEH) +$0.62 (0.7%) to $88.84;
- Jeffries Group (JEF) +$0.25 (0.65%) to $38.58;
- Charles Schwab (SCH) +$0.07 (0.61%) to $11.54;
- Ameritrade (AMTD) +$0.06 (0.46%) to $13.22;
- E*Trade (ET) +$0.04 (0.29%) to $13.69;
The Philadelphia SOX (Semiconductor) index slid 1.31 points (0.32%), to 406.25
- KLA-Tencor (KLAC) -$0.72 (1.68%) to $42.25;
- Texas Instruments (TXN) -$0.31 (1.35%) to $22.61;
- Teradyne (TER) -$0.14 (0.9%) to $15.36;
- Freescale Semiconductor (FSL-B) -$0.10 (0.58%) to $17.00;
- Marvell Tech Group (MRVL) -$0.20 (0.58%) to $34.30;
Gold & Silver Markets
Gold meandered around like a drunken chimpanzee, before settling $0.70 (0.17%) higher at $420.30 per ounce. Frankly, it looks decidedly weaker technically than it has for some time.
Gold Bugs Index posted a rise of 2.42 points (1.2%), to end the session at 204.75
- Coeur d'Alene (CDE) +$0.13 (3.68%) to $3.66;
- Hecla Mining (HL) +$0.17 (3.14%) to $5.59;
- Iamgold (IAG) +$0.19 (3.04%) to $6.45;
- Eldorado Gold (EGO) +$0.07 (2.61%) to $2.75;
- Golden Star (GSS) +$0.08 (2.23%) to $3.67;
Silver rose $0.02 (0.31%) to close at $6.47 per ounce. The Gold and Silver Index (XAU) gained 0.76 points (0.81%), closing at 94.15 points.
- Placer Dome (PDG) +$0.49 (2.8%) to $18.01;
- Meridian Gold (MDG) +$0.34 (2.01%) to $17.28;
- Kinross Gold (KGC) +$0.13 (1.95%) to $6.78;
- Barrick Gold (ABX) +$0.37 (1.68%) to $22.35;
| Index | Close | Gain(Loss) | % |
| Gold | 420.3 | 0.7 | 0.17% |
| Silver | 6.47 | 0.02 | 0.31% |
| PHLX Gold and Silver Index | 94.15 | 0.76 | 0.81% |
| AMEX Gold BUGS Index | 204.75 | 2.42 | 1.2% |
Oil Market
Oil was firmer - but by bugger-all at the end of the session - rising by $0.03 per barrel, closing at $45.18 per barrel. Someone big sat on Oil's chest part-way through the session. On no identifiable news, the crude contract started plummeting, mostly due to heavy-ish selling in forward months. That means that someone was DRAGGING the front-month crude contract down n a "low cost" way - selling in the forwards (which are thinner than the front month) means that you get a bigger decline for your buck than trying to muscle the front-month own. Arbitrage (adjustments to futures calendar spreads, mostly) does the bulk of the work for you.
At one stage oil was up nicely and looking bullish - check out the chart below:
Oil Futures Intraday 5 minute chart
The Oil and Gas Index (XOI) posted a rise of 3.04 points (0.43%), closing at 703.23
- Marathon Oil Corp (MRO) +$0.46 (1.25%) to $37.27;
- Sunoco Inc (SUN) +$0.82 (1.06%) to $78.24;
- ConocoPhillips (COP) +$0.77 (0.91%) to $85.63;
- Global Industries (GLBL) +$0.37 (5.02%) to $7.74;
- Smith International (SII) +$1.24 (2.34%) to $54.24;
- Rowan Inc (RDC) +$0.42 (1.68%) to $25.35;
| Index | Close | Gain(Loss) | % |
| Reuters CRB | 279 | 0 | 0% |
| Crude Oil Light Sweet | 45.18 | 0.03 | 0.07% |
| AMEX Oil Index | 703.23 | 3.04 | 0.43% |
| Oil Service Index | 119.49 | 1.1 | 0.93% |
Currency Markets
Not a lot to talk about on a closing basis - the Euro rose back above 1.3100 for a while, but sank back by the close.
| Index | Close | Gain(Loss) | % |
| US Dollar Index | 83.38 | -0.35 | -0.42% |
| Euro | 1.3081 | 0.0029 | 0.22% |
| Yen | 104.29 | -0.47 | -0.45% |
| Sterling | 1.8754 | 0.0053 | 0.28% |
| Australian Dollar | 0.7578 | 0.0005 | 0.07% |
| Swiss Franc | 1.1819 | -0.0023 | -0.19% |
| Canadian Dollar | 0.8172 | 0.0057 | 0.7% |
European Markets
France's benchmark CAC-40 Index declined 0.14 points (0%), at 3877.82; the German DAX-30 Index shed 9.03 points (0.21%), to 4307.37; and in the UK, the FTSE-100 Index declined 13.4 points (0.28%), closing at 4840.7 points.
| Index | Close | Gain(Loss) | % |
| CAC-40 | 3877.82 | -0.14 | 0% |
| DAX-30 | 4307.37 | -9.03 | -0.21% |
| FTSE-100 | 4840.7 | -13.4 | -0.28% |
Tomorrow's Pivots (US Futures Market)
| Dow | S&P500 | Nasdaq | Bonds | |
| R2 | 10716 | 1202.57 | 1592.83 | 112 21/32 |
| R1 | 10672 | 1197.23 | 1580.67 | 112 16/32 |
| Pivot | 10629 | 1191.37 | 1572.33 | 112 10/32 |
| S1 | 10585 | 1186.03 | 1560.17 | 112 5/32 |
| S2 | 10542 | 1180.17 | 1551.83 | 111 31/32 |
