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Economic Statistics
The Economic data was good enough to give euity-nuffnuffs some hope, but bad enough to give the bond market an excuse to rally. How convenient, given that bonds were in the tank recently (I mentioned the likelihood of a spike/bounce from oversold recently). /p>
I'm afraid that when economic data gives all things to all people, it's not to be believed - especially when things just don't add up... like how do you get static participation rates, rising unemployment (i.e., fewer workers in the static labour pool), and rising employment? Those three numbers are inextricably linked, and they don't hold water.
| Friday, March 4, 2005 | |||||
|
Time (ET)
|
Data
|
Prior report
|
Consensus
|
Actual
|
|
|
830
|
|
+146K
|
+220K
|
+262K
|
|
|
830
|
|
5.2%
|
5.2%
|
5.4%
|
|
|
830
|
|
0.1%
|
0.2%
|
zero
|
|
|
830
|
|
33.8
|
33.7
|
33.8
|
|
|
830
|
|
65.8
|
-na-
|
65.8
|
|
|
940
|
|
120
|
-na-
|
||
|
945
|
|
95.5
|
94.3
|
94.1
|
|
|
1000
|
|
0.3%
|
0.3%
|
0.2%
|
|
|
1000
|
|
3.4%
|
-na-
|
2.9%
|
|
|
1500
|
|
$968.95M
|
-na-
|
||
Tomorrow's US Economic Data Calendar
Federal Reserve Open Market Operations
The Fed's Open Market Operations desk performed 1 repurchase operation.
- a $2.75billion, overnight repurchase entirely in T-backed collateral.
Major US Indices
The DJIA advanced 107.52 points (0.99%), closing out the day at 10940.55 points; within the blue-chip index, 26 stocks rose, the biggest gainers being Du Pont (DD, +2.73% to $54.55) and Caterpillar (CAT, +2.27% to $99.96), which accounted for 27 Dow points between them.
Losers in the Dow numbered just 3 -
- Hewlett Packard (HPQ, -1.20% to $20.56);
- General Motors (GM, -0.94% to $34.84); and
- International Business Machines (IBM, -0.04% to $92.37)
Between them they imposed a paltry 4.58 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the gainers by 267.1m shares to 24.7m. It's not often you see a 10:1 tilt in upside/downside volume, but there it is!
The broader S&P500 rose 11.65 points (0.96%), at 1222.12. Over at Times Square, the Nasdaq Composite posted a rise of 12.21 points (0.59%), to close at 2070.61, while larger-cap technology issues fared worse with the Nasdaq100 adding 8.69 points (0.57%), to end at 1520.58 points. Notice that the Nasdaq100 is still uncomfortably close to 1500, despite the S&P apparently having broken the shackles of the 1200-1220 area (which brings 1240 into focus - it's the next important area).
Both the S&P and the Nasdaq closed below the levels they traded at at 10 a.m. NY time; the 10 a.m. levels weren't the highs of the day, though. The S&P had a "thin Friday lunchtime squirt" which took it to a higher high (by 3 points) at 2 p.m., but all of that was given back in the afternoon fade. The Nasdaq's 2 p.m. reading was 4 points above its 10 a.m. level.
NYSE Volume was solid, with 1.64 billion shares changing hands, while Nasdaq Volume was pretty solid, with 1.83 billion shares being shifted from one online brokerage account to another (and back again, in all likelihood).
| Major Market Statistics | |||
| Index | Close | Gain(Loss) | % |
| DJIA | 10940.55 | 107.52 | 0.99% |
| S&P500 | 1222.12 | 11.65 | 0.96% |
| Nasdaq Composite | 2070.61 | 12.21 | 0.59% |
| Nasdaq100 | 1520.58 | 8.69 | 0.57% |
| NYSE Volume | 1.64bn | - | - |
| Nasdaq Volume | 1.83bn | - | - |
Bellwethers
My 9-stock "bellwethers" group rose by an average of 0.80%
- General Electric (GE) +$0.57 (1.6%) to $36.12;
- Citigroup (C) +$0.43 (0.9%) to $48.40;
- Wal Mart (WMT) +$0.24 (0.45%) to $53.10;
- I.B.M. (IBM) -$0.04 (0.04%) to $92.37;
- Intel (INTC) +$0.18 (0.73%) to $24.68;
- Cisco Systems (CSCO) +$0.24 (1.35%) to $18.04;
- eBay (EBAY) +$0.26 (0.63%) to $41.75;
- Fannie Mae (FNM) -$0.01 (0.02%) to $58.50; and
- Freddie Mac (FRE) +$1.03 (1.63%) to $64.23.
Market Breadth & Internals
NYSE advancing Issues exceeded decliners by 2542 to 780 for a single-day A/D reading of 1762; Nasdaq gainers trumped losers by 1792 to 1318. The 10-day moving average of the A/D line rose to 487.3 on the NYSE, while the 10dma of the Nasdaq A/D rose to 29.1.
NYSE advancing volume exceeded volume in decliners by 1205 to 406 million shares; Nasdaq advancing volume was greater than volume in decliners by 1053.3 to 684 million shares.
427 NYSE-listed stocks rose to new 52-week highs, and 16 posted fresh 52-week lows, while on the Nasdaq there were 139 stocks that hit new 52-week highs, and 47 which fell to fresh 52-week lows.
| Market Breadth Statistics | ||
| NYSE | Nasdaq | |
| Advancers | 2542 | 1792 |
| Decliners | 780 | 1318 |
| Advancing Volume (m) | 1205.04 | 1053.33 |
| Declining Volume (m) | 406.04 | 683.99 |
| New Highs | 427 | 139 |
| New Lows | 16 | 47 |
Market Sentiment
| Market Sentiment Statistics | |||
| Index | Close | Gain(Loss) | % |
| CBOE Volatility Index | 11.94 | -0.99 | -7.66% |
| CBOE Nasdaq Volatility Index | 18.13 | -0.63 | -3.36% |
| Equity Put-Call Ratio | 0.64 | -0.05 | -7.25% |
| 10-day PCR | 0.62 | 0 | 0.7% |
| SPX-VIX Ratio | 102.4 | 8.74 | 9.33% |
Bond Market Analysis
After the employment report, the March05 30-year bond futures snapped down as low as 112&1/32, bringing the total profit on that short position to one tick short of $5000 (on a required stake of $1755).
That spike down also dragged the position's profit -protection stop down almost half a point, to 113&20/32, per the stop-adjustment criterion posted here (i.e., the stop moves down 1 tick for every 2 tick's additional fall in the price - search for "Toot toot" in the linked page). Then the market took off upwards and took out the stop - so the position closed with a profit of 3 points and 12 ticks, or $3,375 per $1755 contract.
If you were really canny you would have understood that the spike down meant that nuffies were being exploited, and would have exited with almost all of the original gain: I mentioned recently that if the bond market genuinely changes its short term inflation expectations as the result of a report, the first move after the report is usually in the opposite direction to what you would expect.
This is done to hurt nuffies; nuffie sees a report headline that's bond-bullish (employment growth with almost no wage pressure), and buys, placing a stop below the market. Large traders smash those stops (they can do this very cheaply, because the market is so thin during Globex) and that sets off a little cascade of stop-tickling as successive stops are triggered. Then, other nuffies go short, thinking "there's something in that report that the big guys hate" - adding to downward pressure.
And of course they put stops in ABOVE the market. Then, large traders buy (their primary intention all along) and the market starts to hit stops on the way UP. Look at a 1 minute bond chart to see what happened last night...
It was the same story pretty much along the curve, although the very short end didn't do much of anything. Yields on longer-duration Treasuries fell in line with duration (the longer, the greater the fall in yield) with the benchmark 30-year Treasury bond shedding 8.7 basis points to 4.65%.
| Treasury Yields | |||
| Index | Close | Gain(Loss) | % |
| UST 13wk (yld) | 2.692 | 0 | 0% |
| UST 2Y (yld) | 3.54 | -0.01 | -0.28% |
| UST 5Y (yld) | 3.956 | -0.051 | -1.27% |
| UST 10Y (yld) | 4.31 | -0.073 | -1.67% |
| UST 30Y (yld) | 4.65 | -0.087 | -1.84% |
The Banks Index rose 1.44 points (1.44%), at 101.42; within the index,
- M&T Bank Corp (MTB) +$3.47 (3.43%) to $104.68;
- Northern Trust (NTRS) +$1.20 (2.77%) to $44.56;
- Bank Of NY (BK) +$0.80 (2.63%) to $31.21;
- Fifth Third Bancorp (FITB) +$1.03 (2.3%) to $45.88; and
- Zions Bancorp (ZION) +$1.38 (2.04%) to $68.98.
The Broker-dealer Index rose 2.9 points (1.94%), closing at 152.07; the ticket clippers lined up as follows -
- Ameritrade (AMTD) +$0.34 (3.13%) to $11.20;
- Morgan Stanley (MWD) +$1.46 (2.56%) to $58.39;
- Merrill Lynch (MER) +$1.49 (2.48%) to $61.55;
- Bear Stearns (BSC) +$2.30 (2.28%) to $103.20; and
- Lehman Brothers (LEH) +$2.02 (2.22%) to $93.02.
The Philadelphia SOX (Semiconductor) index lost 1.04 points (0.24%), to end the session at 433.38
- Micron Technology (MU) -$0.43 (3.84%) to $10.76;
- Teradyne (TER) -$0.32 (2.06%) to $15.19;
- Broadcom (BRCM) -$0.63 (1.97%) to $31.31;
- Novellus Systems (NVLS) -$0.48 (1.69%) to $27.90; and
- Freescale Semiconductors (FSL-B) -$0.28 (1.47%) to $18.72.
Gold & Silver Markets
Gold rose $4.60 (1.07%) to close at $435.10 per ounce. I've said it for a week now... USD weakness = Gold strength; Gold has no impetus without USD weakness at the moment, and the USD is still in No Man's Land.
Gold Bugs Index gained 6.35 points (3.02%), closing at 216.54
- Freeport McMoran (FCX) +$2.32 (5.6%) to $43.73;
- Goldcorp (GG) +$0.75 (5.56%) to $14.24;
- Coeur d'Alene (CDE) +$0.18 (4.62%) to $4.08;
- Hecla Mining (HL) +$0.22 (4.04%) to $5.66; and
- Randgold Resources (GOLD) +$0.51 (3.9%) to $13.60.
Silver rose $0.12 (1.68%) to close at $7.36 per ounce. The Gold and Silver Index (XAU) gained 2.71 points (2.79%), ending the day at 99.8 points.
- Freeport McMoran (FCX) +$2.32 (5.6%) to $43.73;
- Goldcorp (GG) +$0.75 (5.56%) to $14.24;
- Kinross Gold (KGC) +$0.21 (3.16%) to $6.86; and
- Agnico Eagle (AEM) +$0.44 (3.12%) to $14.55.
| Precious Metals and Indices | |||
| Index | Close | Gain(Loss) | % |
| Gold | 435.10 | 4.60 | 1.07% |
| Silver | 7.36 | 0.12 | 1.68% |
| PHLX Gold and Silver Index | 99.8 | 2.71 | 2.79% |
| AMEX Gold BUGS Index | 216.54 | 6.35 | 3.02% |
Oil Market
Oil was firmer, rising by $0.29 per barrel, closing at $53.78 per barrel, and trading as high as $54. The Oil and Gas Index (XOI) gained 11.5 points (1.31%), at 889.13
- Sunoco (SUN) +$2.34 (2.3%) to $104.14;
- Repsol YPF (REP) +$0.58 (2.09%) to $28.32; and
- TotalFinaElf S.A. (TOT) +$2.44 (2.05%) to $121.69.
The Oil service stocks (OSX) Index advanced 2.44 points (1.71%), at 145.26
- Global Industries (GLBL) +$0.42 (4.36%) to $10.05;
- BJ Services (BJS) +$1.33 (2.64%) to $51.80; and
- Rowan Companies (RDC) +$0.82 (2.55%) to $32.92.
| Energy Complex | |||
| Index | Close | Gain(Loss) | % |
| Reuters CRB | 309.16 | 1.64 | 0.53% |
| Crude Oil Light Sweet | 53.78 | 0.29 | 0.54% |
| Heating Oil | 1.4834 | 0 | 0.03% |
| Natural Gas | 6.744 | 0.13 | 2.03% |
| Unleaded Gas | 1.5089 | 0.01 | 0.59% |
| AMEX Oil Index | 889.13 | 11.5 | 1.31% |
| Oil Service Index | 145.26 | 2.44 | 1.71% |
Currency Markets
With the economic data as "tame" as it was, and the bond market rising hard in response, the USD was losing one potential positive (a steepening yield curve, which is the primary source of carry for offshore bond speculators). The highly unlikely combination of static participation, rising unemployment and rising new payrolls (people must be falling from the sky or something) would make those gullible enough to believe government statistics, think "The Fed can slow its tightening - there's no wage pressure, no tightness in labour markets... blah blah blah"). It's a load of hooey, but it is moving the USD in the right direction (down).
| Currency Prices | |||
| Index | Close | Gain(Loss) | % |
| US Dollar Index | 82.52 | -0.8 | -0.96% |
| Euro | 1.3237 | 0.0135 | 1.03% |
| Yen | 104.75 | -0.57 | -0.54% |
| Sterling | 1.9224 | 0.016 | 0.84% |
| Australian Dollar | 0.7906 | 0.009 | 1.15% |
| Swiss Franc | 1.1686 | -0.0123 | -1.04% |
| Canadian Dollar | 0.8116 | 0.0081 | 1.01% |
