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Federal Reserve Open Market Operations
The Fed's Open Market Operations desk performed 1 repurchase operation last night:
- an $8.25billion, weekend repurchase with $7.339billion in T-backed collateral .
Recall from previous missives that the mail-list "tone" for the week was to buy pullbacks - especially if the Fed bellied up to the crack-pipe and doled out a good dollop of repo juice.
Well, the market was back on song - a pullback that hit the low at 10 a.m. NY time... the usual time that the rubber strap is loosed off the vein into which the repo speedball is injected. (An unwieldy metaphor, to be sure, but it's a good fit).
Major US Indices
The DJIA added 44.85 points (0.43%), closing out the day at 10596.79 points; it took a concerted push into the close to muscle the indices up, and it was clearly another "ego hand-job" - this time for Bush's State of the Onion speech.
Perhaps it's time to start thinking about changing the bias (although the present behaviour could, in theory, proceed all the way to 1200 and higher... but last night's behaviour indicates to me that it's getting worn out). There's still the payrolls report this week, which is likely to surprise on the upside (payroll reports routinely surprise on the upside when Bush needs a public opinion bounce - that's the advantage of having political appointees in charge of statistical authorities... Stalin never had a failed Five Year Plan either).
The broader S&P500 gained 3.78 points (0.32%), at 1193.19. Over at Times Square, the Nasdaq Composite added 6.36 points (0.31%), to close at 2075.06, while larger-cap technology issues fared worse with the Nasdaq100 adding a measly 1.44 points (0.09%), to end at 1525.1 points.
NYSE Volume was chunky, with 1.59 billion shares changing hands, while Nasdaq Volume was also pretty solid, with 1.99 billion shares flicking on screens around the cyberverse.
| Index | Close | Gain(Loss) | % |
| DJIA | 10596.79 | 44.85 | 0.43% |
| S&P500 | 1193.19 | 3.78 | 0.32% |
| Nasdaq Composite | 2075.06 | 6.36 | 0.31% |
| Nasdaq100 | 1525.1 | 1.44 | 0.09% |
| NYSE Volume | 1.59bn | - | - |
| Nasdaq Volume | 1.99bn | - | - |
Bellwethers
My 9-stock "bellwethers" group fell by an average of 0.16%, thanks largely to the weakness in Fannie Mae, which was one of only two stocks that fell (the other, GE, fell less than a nickel).
- General Electric (GE) -$0.03 (0.08%) to $36.25;
- Citigroup (C) +$0.20 (0.4%) to $49.68;
- Wal Mart (WMT) +$0.45 (0.86%) to $53.06;
- I.B.M. (IBM) +$0.44 (0.47%) to $94.30;
- Intel (INTC) -$0.05 (0.22%) to $22.58;
- Cisco Systems (CSCO) +$0.02 (0.11%) to $18.15;
- eBay (EBAY) +$0.87 (1.12%) to $78.80;
- Fannie Mae (FNM) -$1.75 (2.64%) to $64.42; and
- Freddie Mac (FRE) -$0.95 (1.42%) to $66.05.
Market Breadth & Internals
NYSE advancing Issues exceeded decliners by 2112 to 1214 for a single-day A/D reading of 898; Nasdaq gainers trumped losers by 1777 to 1307
NYSE advancing volume exceeded volume in decliners by 1043.44 to 519.27 million shares; Nasdaq advancing volume was greater than volume in decliners by 610.7 to 446.8 million shares.
262 NYSE-listed stocks rose to new 52-week highs, and 4 posted fresh 52-week lows, while on the Nasdaq there were 125 stocks that hit new 52-week highs, and 21 which fell to fresh 52-week lows.
| NYSE | Nasdaq | |
| Advancers | 2112 | 1777 |
| Decliners | 1214 | 1307 |
| Advancing Volume (m) | 1043.44 | 610.7 |
| Declining Volume (m) | 519.27 | 446.8 |
| New Highs | 262 | 125 |
| New Lows | 4 | 21 |
Market Sentiment
I said in the e-mail earlier this week that sometime this week the daily and weekly charts would both reconnect at overbought levels - that has just about happened. Throw in low implied option volatility and a huge surge in call volume, and you have a recipe for a market that is ripe for a good sized correction. (I'm still pretty sanguine about the AAPL $75 puts too, in case you're wondering!!).
| Index | Close | Gain(Loss) | % |
| Equity Call Volume (000) | 3033.63 | 523.74 | 20.87% |
| Equity Put Volume (000) | 1731.49 | -121.11 | -6.54% |
| CBOE Volatility Index | 11.66 | -0.37 | -3.08% |
| CBOE Nasdaq Volatility Index | 17.3 | -0.46 | -2.59% |
| Equity Put-Call Ratio | 0.57 | -0.17 | -22.67% |
| SPX-VIX Ratio | 102.33 | 3.4616 | 3.5% |
Bond Market Analysis
The Fed did as expected, but the key thing to notice is that, ever so slowly,l the yield curve is flattening. The Fed's rate hikes are not being taken by the bond market as a sign of increased money-spinning. In cases where the Fed tightens but the long end of the bond market flattens, I will take the bond market's forecast any day the bond market's forecast is - in a flattening environment - one of economic stagnation.
Bonds rose at the long end, with the yield on the benchmark 30-year Treasury bond shedding 1.4 basis points to 4.581%.
| Index | Close | Gain(Loss) | % |
| UST 13wk (yld) | 2.467 | 0 | -0.16% |
| UST 2Y (yld) | 3.296 | 0.024 | 0.73% |
| UST 5Y (yld) | 3.715 | 0.01 | 0.38% |
| UST 10Y (yld) | 4.14 | 0 | 0% |
| UST 30Y (yld) | 4.581 | -0.014 | -0.3% |
The Banks Index was basically unchanged for the session - which ought to be of concern The index shed 0.1 points (0.1%), to end the session at 101.99; within the index,
- PNC Financial Services (PNC) -$0.50 (0.93%) to $53.50;
- Regions Financial (RF) -$0.29 (0.9%) to $31.97;
- Wells Fargo (WFC) -$0.54 (0.88%) to $60.78;
- Northern Trust (NTRS) -$0.38 (0.86%) to $43.67; and
- State Street (STT) -$0.32 (0.7%) to $45.23.
The Broker-dealer Index lost 1.02 points (0.68%), at 149.93; the ticket clippers lined up as follows -
- Ameritrade (AMTD) -$0.33 (2.62%) to $12.25;
- A G Edwards (AGE) -$0.60 (1.4%) to $42.17;
- Raymond James (RJF) -$0.36 (1.15%) to $30.91;
- Charles Schwab (SCH) -$0.07 (0.63%) to $11.09; and
- Legg Mason (LM) -$0.45 (0.58%) to $77.64.
The Philadelphia SOX (Semiconductor) index lost 2.63 points (0.64%), closing at 405.83
- ST Microelectronic (STM) -$0.34 (1.99%) to $16.78;
- Novellus Systems (NVLS) -$0.33 (1.24%) to $26.21;
- Linear Technology (LLTC) -$0.47 (1.23%) to $37.65;
- Maxim Integrated (MXIM) -$0.48 (1.22%) to $38.93; and
- Freescale Semiconductors (FSL-B) -$0.21 (1.21%) to $17.19.
Gold & Silver Markets
Gold rose $0.50 (0.12%) to close at $423.50 per ounce.
Gold Bugs Index advanced 0.57 points (0.28%), to 203.46
- Meridian Gold (MDG) +$0.50 (2.74%) to $18.74;
- Coeur d'Alene (CDE) +$0.10 (2.73%) to $3.76;
- Glamis Gold (GLG) +$0.39 (2.44%) to $16.37;
- Freeport McMoran (FCX) +$0.59 (1.59%) to $37.66; and
- Goldcorp (GG) +$0.17 (1.2%) to $14.35.
Silver rose $0.04 (0.52%) to close at $6.77 per ounce. The Gold and Silver Index (XAU) gained 0.66 points (0.72%), at 92.34 points.
- Meridian Gold (MDG) +$0.50 (2.74%) to $18.74;
- Placer Dome (PDG) +$0.31 (1.83%) to $17.28;
- Freeport McMoran (FCX) +$0.59 (1.59%) to $37.66; and
- Barrick Gold (ABX) +$0.32 (1.47%) to $22.06.
| Index | Close | Gain(Loss) | % |
| Gold | 423.5 | 0.5 | 0.12% |
| Silver | 6.77 | 0.035 | 0.52% |
| PHLX Gold and Silver Index | 92.34 | 0.66 | 0.72% |
| AMEX Gold BUGS Index | 203.46 | 0.57 | 0.28% |
Oil Market
[Commentary]
Oil lost ground, shedding $0.57 per barrel, closing at $46.61 per barrel. The Oil and Gas Index (XOI) advanced 6.34 points (0.84%), closing at 765.25
- Amerada Hess (AHC) +$2.27 (2.59%) to $89.87;
- Marathon Oil (MRO) +$0.82 (2.09%) to $40.00; and
- Unocal (UCL) - former employer of US Afghan stooge Hamid Karzai - up $0.74 (1.55%) to $48.50.
The Oil service stocks (OSX) Index advanced 2.38 points (1.83%), at 132.13
- Varco International (VRC) +$0.99 (3.21%) to $31.79;
- Schlumberger (SLB) +$1.79 (2.62%) to $70.12; and
- Weatherford International (WFT) +$1.36 (2.5%) to $55.86.
| Index | Close | Gain(Loss) | % |
| Reuters CRB | 284 | 0 | 0% |
| Crude Oil Light Sweet | 46.61 | -0.57 | -1.21% |
| Heating Oil | 1.2976 | -0.02 | -1.24% |
| Natural Gas | 6.42 | 0.104 | 1.65% |
| Unleaded Gas | 1.2917 | -0.02 | -1.73% |
| AMEX Oil Index | 765.25 | 6.34 | 0.84% |
| Oil Service Index | 132.13 | 2.38 | 1.83% |
Currency Markets
[Commentary]
| Index | Close | Gain(Loss) | % |
| US Dollar Index | 0 | -83.46 | -100% |
| Euro | 1.3027 | -0.0015 | -0.12% |
| Yen | 103.73 | 0.07 | 0.07% |
| Sterling | 1.8848 | 0.001 | 0.05% |
| Australian Dollar | 0.7768 | 0.0027 | 0.35% |
| Swiss Franc | 1.193 | 0.0025 | 0.21% |
| Canadian Dollar | 0.8068 | -0.0015 | -0.19% |
Pivots (US Futures Market)
| Dow | S&P500 | Nasdaq | Bonds | |
| R2 | 10659 | 1199.67 | 1542.5 | 115 9/32 |
| R1 | 10624 | 1196.43 | 1533 | 115 3/32 |
| Pivot | 10580 | 1192.77 | 1525.5 | 114 26/32 |
| S1 | 10545 | 1189.53 | 1516 | 114 20/32 |
| S2 | 10501 | 1185.87 | 1508.5 | 114 11/32 |
European Markets
[Commentary]
Euro-Zone Indices
| Country | Index | Last | % | % |
| France | CAC 40 | 3951.72 | 12.54 | 0.32% |
| Germany | DAX-30 | 4296.31 | 16.34 | 0.38% |
| UK | FTSE 100 | 4916.2 | 10 | 0.2% |
| Italy | MIBTel | 24295 | 58 | 0.24% |
European Index Internals
| CAC-40 | DAX-30 | FTSE-100 | |
| Advancers | 17 | 17 | 64 |
| Decliners | 21 | 13 | 34 |
| Advancing Volume (m) | 136.5 | 56.8 | 993.5 |
| Declining Volume (m) | 35.8 | 50.4 | 664.4 |
Euro STOXX-50 Largest Volume
| Name | Close (€) | Change | % | Volume |
| Telefonica | 14.02 | 0.02 | 0.14% | 25426440 |
| Bosch | 9.14 | 0.05 | 0.55% | 24237952 |
| Deutsche Telekom | 16.46 | -0.08 | -0.48% | 18929974 |
| BBVA | 13.1 | 0.1 | 0.77% | 18668374 |
| Philips | 20.42 | -0.23 | -1.11% | 16692488 |
CAC-40 Largest Gainers
| Name | Close (€) | Change | % | Volume |
| Suez | 21.57 | 0.51 | 2.42% | 6007423 |
| TFL | 25.51 | 0.51 | 2.04% | 913273 |
| Arcelor | 17.57 | 0.35 | 2.03% | 4092074 |
| Vivendi Universal | 24.88 | 0.48 | 1.97% | 9120137 |
| Accor | 34.15 | 0.57 | 1.7% | 1175107 |
CAC-40 Largest Decliners
| Name | Close (€) | Change | % | Volume |
| Pinault-Pr Red | 78.6 | -2.55 | -3.14% | 2202626 |
| ST Microelectronics | 12.88 | -0.23 | -1.75% | 6621402 |
| Peugeot | 47.76 | -0.42 | -0.87% | 922498 |
| Sanofi-Aventis | 56.45 | -0.4 | -0.7% | 3869344 |
FTSE Largest Gainers
| Name | Close (£) | Change | % | Volume |
| Xstrata | 10.125 | 0.49 | 5.09% | 18879484 |
| Corus Group | 0.555 | 0.03 | 4.72% | 124161832 |
| Unilever | 5.2425 | 0.16 | 3.2% | 25193300 |
| Rentokil Initial | 1.5775 | 0.05 | 3.1% | 14375852 |
| ICI | 2.3975 | 0.07 | 3.01% | 14427398 |
FTSE Largest Decliners
| Name | Close (£) | Change | % | Volume |
| Exel | 8.32 | -0.41 | -4.7% | 8325354 |
| BT Group | 2.0425 | -0.04 | -1.68% | 48099968 |
| Mmo2 | 1.22 | -0.02 | -1.61% | 62701764 |
| Old Mutual | 1.2675 | -0.02 | -1.36% | 16069735 |
| Aviva | 6.3 | -0.08 | -1.18% | 9831399 |
DAX-30 Largest Gainers
| Name | Close (€) | Change | % | Volume |
| Linde | 51.96 | 1.88 | 3.75% | 1027202 |
| Commerzbank | 16.85 | 0.47 | 2.87% | 11025453 |
| Hypovereinsbank | 17.6 | 0.49 | 2.86% | 9914756 |
| RWE | 45.93 | 0.83 | 1.84% | 5378143 |
| Schering | 52.4 | 0.85 | 1.65% | 1491278 |
DAX-30 Largest Decliners
| Name | Close (€) | Change | % | Volume |
| MAN | 31.25 | -0.41 | -1.3% | 1572912 |
| Infineon Tech | 7.15 | -0.09 | -1.24% | 8062926 |
| Volkswagen | 36.93 | -0.46 | -1.23% | 2647756 |
| Siemens | 60.82 | -0.53 | -0.86% | 4374889 |
| Bayer | 24.58 | -0.16 | -0.65% | 3948498 |
