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Economic Statistics
The preliminary reading of the University of Michigan's Consumer Sentiment Index came in at 95.8, which fell short of the consensus guess (97.1) but was within the central band of the consensus range (93.8 to 98.9).
There is absolutely nothing that can be read from this index - which is correlated with nothing except a 2-week lag of the S&P500 (i.e., if stock prices were rising in the 2 weeks prior to the survey, the "current conditions" component of the survey will be broadly positive). It is certainly not correlated with future consumption spending. Anybody who bases their expectations of the US economy on any of the survey-based statistics, is an idiot - because surveys are stupid since the people who answer them tend, on the whole, to give answers that they think the survey wants. (For example, in surveys, 65% of US income earners respond that they are in the top income decile)
Federal Reserve Open Market Operations
The Fed's Open Market Operations desk performed 1 repurchase operation last night:
- a $1.75billion, overnight repurchase with $1.75billion in T-backed collateral.
Well, they wuz warned. I said on Monday that if Greenstain and his central wanker pals don't play nice with the repo dough, this week would be a dud. $1.85 bill is an insult to da Boyz - how on earth are they supposed to push the market higher with that sort of paltry amount?
Major US Indices
Three down weeks in a row at the start of the year... any guesses as to the last time that happened?
The answer isn't 2000, or 2001... it's 1982. 23 years ago was the last time the US market posted three consecutive losing weeks in January.
And in 1982, the trailing PE of the S&P500 was... 8.2; the dividend yield was double-digits, and stillnobody wanted to own stocks. From there, rose a bull market unprecedented in human history, and a bubble thatsaw its only historical analogues in South Sea Bubble period of the 1620s (although John Law's stewardship of the French central bank was almost as absurdly overrated as Greenspasm's).
The DJIA slid 78.48 points (0.75%), closing out the day at 10392.99 points; the broader S&P500 dipped 7.54 points (0.64%), closing at 1167.87. For the week, the Dow dropped 1.6% and the S&P fell 1.4 percent - to their lowest levels in 2 and a half months. That's despite good news from United Tech and GE, two Dow components that posted better-than-expected earnings. (GE dropped 0.7% and UTX managed a 0.7% gain). Another Dow component - Johnson and Johnson (JNJ) - 'fessed up that in clinical trials of its new anti-Alzhemiers drug, there was a pacebo effect... whereby people treated with a placebo tended to die less than people treated with Reminyl. Terrific - unless you weren't one of the control group.
Of course they stated it differently - that "more people died when treated with Reminyl than when treated with a placebo": the US is not yet totally under the thrall of Orwellian TruthSpeak, notwithstanding the nonsense spouted by the retard-in-Chief (and the nonsense spouted by the third wheel in the Crawford three-way...Condoleeza Rice telling her confirmation hearing not to impugn her integrity? Talk to the hand, girlfriend - you ain't gots no integrity).
"A fire in men's hearts"? Give me a break. As Justin Raimondo points out, the quote is stolen from Dostoyevsky and the original uses it to indicate "crowd rage". I suppose the quotation is more apt if - like me- you view US foreign policy as a species of globe-trotting mob violence, but I won't press the point.
Over at Times Square, the Nasdaq Composite lost 11.61 points (0.57%), to close at 2034.27, while larger-cap technology issues fared worse with the Nasdaq100 losing 10.92 points (0.72%), to end at 1503.64 points. The Nasdaq Composite fell 2.6% for the week, posting its lowest close in nearly three months.
NYSE Volume was chunky, with 1.64 billion shares changing hands, while Nasdaq Volume was pretty chunky (over 2 bill), with 2.06 billion shares being shifted from one online brokerage account to another (and back again, in all likelihood).
| Index | Close | Gain(Loss) | % |
| DJIA | 10392.99 | -78.48 | -0.75% |
| S&P500 | 1167.87 | -7.54 | -0.64% |
| Nasdaq Composite | 2034.27 | -11.61 | -0.57% |
| Nasdaq100 | 1503.64 | -10.92 | -0.72% |
| NYSE Volume | 1.64bn | - | - |
| Nasdaq Volume | 2.06bn | - | - |
Bellwethers
My 9-stock "bellwethers" group fell by an average of 0.53%, with a dead-cat bounce in eBay offsetting part of the overall decline.
- Intel (INTC) -$0.16 (0.71%) to $22.42;
- Cisco Systems (CSCO) -$0.31 (1.69%) to $18.01;
- Citigroup (C) +$0.16 (0.33%) to $47.93;
- IBM (IBM) -$0.62 (0.67%) to $92.38;
- Wal Mart (WMT) -$0.36 (0.67%) to $53.01;
- Ebay (EBAY) +$2.72 (3.26%) to $86.05;
- General Electric (GE) -$0.24 (0.68%) to $35.13;
- Freddie Mac (FRE) -$1.27 (1.87%) to $66.70;
- Fannie Mae (FNM) -$1.35 (2.04%) to $64.85;
Market Breadth & Internals
NYSE declining Issues beat out advancers by 1716 to 1584, for a single-day A/D reading of -132; that's not nearly as negative as you might expect from the headline falls in the indices. Nasdaq losers exceeded gainers by 1764 to 1315.
NYSE declining volume was greater than volume in advancing issues by just under 2:1, 1030 to 567.59 million shares; On the Nasdaq declining volume exceeded volume in advancing issues by 642.09 to 411.44 million shares. Again - not overwhelmingly nearish stats, and certainly not an indication of a selling washout.
58 NYSE-listed stocks rose to new 52-week highs, and 18 posted fresh 52-week lows, while on the Nasdaq there were 45 stocks that hit new 52-week highs, and 42 which fell to fresh 52-week lows
| NYSE | Nasdaq | |
| Advancers | 1584 | 1315 |
| Decliners | 1716 | 1764 |
| Advancing Volume (m) | 567.59 | 411.44 |
| Declining Volume (m) | 1030 | 642.09 |
| New Highs | 58 | 45 |
| New Lows | 18 | 42 |
Market Sentiment
With the put-call ratio climbing back towards unity, it seems that the curent selloff might have limited legs left. Still, there's some technical damage done to the market that will mean that bounces are just that - at least for the time being. That is by way of background: this Rant does not "trump" the Weekly Sentiment missive (sign up here), which is written after I have a long hard think (and some decent sleep).
| Index | Close | Gain(Loss) | % |
| Equity Call Volume (000) | 2539.07 | -1272.76 | -33.39% |
| Equity Put Volume (000) | 2146.83 | -1125.96 | -34.4% |
| CBOE Volatility Index | 14.36 | 0.53 | 3.83% |
| CBOE Nasdaq Volatility Index | 19.37 | -0.13 | -0.67% |
| Equity Put-Call Ratio | 0.85 | -0.01 | -1.52% |
| SPX-VIX Ratio | 81.33 | -3.66 | -4.31% |
Bond Market Analysis
Bonds rose along the curve, and also flattened somewhat with stronger rises in the belly (2-10yrs). The yield on the benchmark 30-year Treasury bond shed 0.8 basis points to 4.646%.
| Index | Close | Gain(Loss) | % |
| UST 13wk (yld) | 2.307 | -0.01 | -0.22% |
| UST 2Y (yld) | 3.138 | -0.041 | -1.29% |
| UST 5Y (yld) | 3.635 | -0.04 | -1.03% |
| UST 10Y (yld) | 4.142 | -0.023 | -0.55% |
| UST 30Y (yld) | 4.646 | -0.008 | -0.17% |
The Banks Index declined 0.47 points (0.47%), closing at 100.09; within the index,
- P N C Financial Services (PNC) -$1.80 (3.29%) to $52.85;
- Comerica Inc (CMA) -$1.08 (1.82%) to $58.20;
- US Bancorp (USB) -$0.36 (1.19%) to $29.96;
- JPMorganChase C (JPM) -$0.40 (1.07%) to $36.85;
- Northern Trust (NTRS) -$0.46 (1.03%) to $44.29;
The Broker-dealer Index declined 0.67 points (0.46%), to end the session at 144.48; the ticket clippers lined up as follows -
- Charles Schwab (SCH) -$0.23 (2.04%) to $11.05;
- Merrill Lynch (MER) -$0.94 (1.62%) to $56.94;
- A G Edwards (AGE) -$0.59 (1.42%) to $40.94;
- Raymond James (RJF) -$0.28 (0.93%) to $29.67; and
- Bear Stearns (BSC) -$0.81 (0.81%) to $99.25.
The Philadelphia SOX (Semiconductor) index shed 5.15 points (1.3%), at 389.66
- Micron Technology (MU) -$0.61 (5.54%) to $10.41;
- Broadcom (BRCM) -$1.38 (4.33%) to $30.49;
- Marvell Tech Group (MRVL) -$1.23 (3.71%) to $31.88;
- Freescale Semiconductor (FSL-B) -$0.60 (3.48%) to $16.63; and
- Novellus Systems (NVLS) -$0.56 (2.17%) to $25.27.
Gold & Silver Markets
Gold rose $4.80 (1.14%) to close at $427.3 per ounce.
Gold Bugs Index gained 5.45 points (2.67%), to end the session at 209.9
- Meridian Gold (MDG) +$0.80 (4.41%) to $18.95;
- Hecla Mining (HL) +$0.22 (4.01%) to $5.70;
- Coeur d'Alene (CDE) +$0.14 (3.81%) to $3.81;
- Iamgold (IAG) +$0.23 (3.8%) to $6.28; and
- Golden Star (GSS) +$0.14 (3.59%) to $4.04.
Silver rose $0.24 (3.65%) to close at $6.81 per ounce. The Gold and Silver Index (XAU) gained 1.94 points (2.08%), to end the session at 95.06 points.
- Meridian Gold (MDG) +$0.80 (4.41%) to $18.95;
- Harmony Gold (HMY) +$0.30 (3.47%) to $8.95;
- Goldcorp (GG) +$0.46 (3.21%) to $14.79; and
- Kinross Gold (KGC) +$0.22 (3.21%) to $7.08.
| Index | Close | Gain(Loss) | % |
| Gold | 427.3 | 4.8 | 1.14% |
| Silver | 6.81 | 0.24 | 3.65% |
| PHLX Gold and Silver Index | 95.06 | 1.94 | 2.08% |
| AMEX Gold BUGS Index | 209.9 | 5.45 | 2.67% |
Oil Market
Oil was firmer, rising by $1.04 per barrel, closing at $48.65 per barrel, after a government survey showed a larger-than-expected drawdown in energy inventories. The Oil and Gas Index (XOI) advanced 4.74 points (0.66%), at 721.69
- RoyalDutchShell (RD) +$1.17 (2.11%) to $56.74;
- Kerr Mcgee (KMG) +$1.19 (2.03%) to $59.78; and
- TotalFina ElfS.A. (TOT) +$1.63 (1.57%) to $105.72.
- Global Industries (GLBL) +$0.19 (2.49%) to $7.82;
- Rowan Cos (RDC) +$0.47 (1.71%) to $27.95; and
- BJ Services (BJS) +$0.61 (1.35%) to $45.82.
| Index | Close | Gain(Loss) | % |
| Reuters CRB | 0 | -284 | -100% |
| Crude Oil Light Sweet | 48.65 | 1.04 | 2.18% |
| AMEX Oil Index | 721.69 | 4.74 | 0.66% |
| Oil Service Index | 126.29 | 0.48 | 0.38% |
Currency Markets
Well, the headline change might make it appear that there was not an intervention (which I mooted as a possibility yesterday), but if you think that you would be wrong. The thing is, it (the intervention) didn't do anything after the initial push (to about 84.05 - well short of the 84.45-84.50 that would have triggered stops). It's hard to see the USD weakening much further from here in the short term though - everyone who is likely to want to short USd has already done so, and all that's left now is for a large enough herd of nuffies to short the low (thereby providing plenty of covering to give the rally some real zip).
Seriously though, I've got valid USDX targets at and above 86 that could be hit in a small number of weeks. Conversely, a break below 80 (coming as it would on the heels of a breach of 100 Yen) would herald a test of 70 before the half-way mark of the year.
| Index | Close | Gain(Loss) | % |
| US Dollar Index | 83.34 | -0.61 | -0.73% |
| Euro | 1.3039 | 0.0083 | 0.64% |
| Yen | 102.67 | -0.68 | -0.66% |
| Sterling | 1.8771 | 0.0049 | 0.26% |
| Australian Dollar | 0.7691 | 0.0107 | 1.41% |
| Swiss Franc | 1.1849 | -0.0054 | -0.45% |
| Canadian Dollar | 0.8179 | 0.0074 | 0.91% |
European Markets
France's benchmark CAC-40 Index rose 11.75 points (0.31%), at 3854.19; the German DAX-30 Index lost 6.73 points (0.16%), to 4213.7; and in the UK, the FTSE-100 Index advanced 2.5 points (0.05%), ending the day at 4803.3
| Index | Close | Gain(Loss) | % |
| CAC-40 | 3854.19 | 11.75 | 0.31% |
| DAX-30 | 4213.7 | -6.73 | -0.16% |
| FTSE-100 | 4803.3 | 2.5 | 0.05% |
Monday's Pivots (US Futures Market)
| Dow | S&P500 | Nasdaq | Bonds | |
| R2 | 10560 | 1185.43 | 1537.67 | 114 25/32 |
| R1 | 10477 | 1176.97 | 1523.33 | 114 18/32 |
| Pivot | 10429 | 1172.23 | 1514.67 | 114 7/32 |
| S1 | 10346 | 1163.77 | 1500.33 | 114 |
| S2 | 10298 | 1159.03 | 1491.67 | 113 21/32 |
