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Federal Reserve Open Market Operations
The Fed's Open Market Operations desk performed 1 repurchase operation.
- a $7.25billion, overnight repurchase entirely in T-backed collateral.
And yet - for the third or fourth straight session - there was not a scintilla of trade-able movement as a result of a large-ish repurchase. I wonder just how bad the markets would look without this cash being poured in?
Major US Indices
After poor data on Industrial Production (actual 0.3%, consensus 0.4%) and a woeful Trade Balance (-$187.9b vs consensus of -$184.5b), it was almost a "coast to coast" decline (i.e., from the opening bell to the closing bell). The Dow Jones Industrial Average declined 112.03 points (1.04%), closing out the day at 10633.07 points.
The index hit an intraday high of 10741.63 - at the open - and fell as low as 10612.38 during the session.
Within the blue-chip index, 5 stocks rose, the biggest gainers being American International Group (AIG, +1.58% to $62.90) and Wal Mart (WMT, +0.88% to $51.33), which accounted for 11 Dow points between them. Losers in the Dow numbered 24 and were led by General Motors (GM, -13.97% to $29.01) after slashing its profit forecast, and Boeing (BA, -2.92% to $56.77), with these two stocks contributing -47 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the losers by 356.8m shares to 57.1m.
The idea that one of the biggest carmakers in the world could have its share price slashed by almost 14% in a session, sets up the focus for just how desperately overvalued this market still is (and bear in mind how interest-rate sensitive GMs earnings are now, given that they make 40% of their income by financing cars, not by making cars... and increase in swap spreads will really, really hurt).
The broader S&P500 shed 9.68 points (0.81%), ending the day at 1188.07. I mentioned earlier this year that the swing low (1160-ish) was not the low for the year (nor even for the first half). Some genuine technical damage has now been done - so expect a bounce!! ha ha ...
Over at Times Square, the Nasdaq Composite declined 19.23 points (0.94%), to close at 2015.75, while larger-cap technology issues fared worse with the Nasdaq100 losing 15.83 points (1.05%), to end at 1486.23 points.
NYSE Volume was chunky, with 1.65 billion shares changing hands, while Nasdaq Volume was also solid, with 1.98 billion shares helping nuffies to send their account balances to Money Heaven.
| Major Market Statistics | |||
| Index | Close | Gain(Loss) | % |
| Dow Jones Industrial Average | 10633.07 | -112.03 | -1.04% |
| S&P500 | 1188.07 | -9.68 | -0.81% |
| Nasdaq Composite | 2015.75 | -19.23 | -0.94% |
| Nasdaq100 | 1486.23 | -15.83 | -1.05% |
| NYSE Volume | 1.65bn | - | - |
| Nasdaq Volume | 1.98bn | - | - |
Bellwethers
My 9-stock "bellwethers" group fell by an average of 1.06%
- General Electric (GE) -$0.39 (1.08%) to $35.61;
- Citigroup (C) -$0.43 (0.9%) to $47.37;
- Wal Mart (WMT) +$0.45 (0.88%) to $51.33;
- I.B.M. (IBM) -$0.73 (0.8%) to $90.65;
- Intel (INTC) -$0.34 (1.42%) to $23.54;
- Cisco Systems (CSCO) -$0.18 (0.99%) to $18.07;
- eBay (EBAY) -$0.59 (1.59%) to $36.48;
- Fannie Mae (FNM) -$0.45 (0.78%) to $56.95; and
- Freddie Mac (FRE) -$1.88 (2.83%) to $64.45.
Market Breadth & Internals
NYSE declining Issues beat out advancers by 2407 to 921, for a single-day A/D reading of -1486; and Nasdaq losers exceeded gainers by 2004 to 1107. The 10-day moving average of the A/D line fell to -519.5 on the NYSE, while the 10dma of the Nasdaq A/D fell to -392.3. With the A/D line now looking desperately overdone, it's almost certainly time for a bounce into the options expiration on Friday.
On the NYSE declining volume was greater than volume in advancing issues by 1199.5 to 429 million shares; On the Nasdaq declining volume exceeded volume in advancing issues by 1538.4 to 396.1 million shares.
49 NYSE-listed stocks rose to new 52-week highs, and 64 posted fresh 52-week lows, while on the Nasdaq there were 38 stocks that hit new 52-week highs, and 91 which fell to fresh 52-week lows.
| Market Breadth Statistics | ||
| NYSE | Nasdaq | |
| Advancers | 921 | 1107 |
| Decliners | 2407 | 2004 |
| Advancing Volume (m) | 428.97 | 396.06 |
| Declining Volume (m) | 1199.48 | 1538.39 |
| New Highs | 49 | 38 |
| New Lows | 64 | 91 |
| Market Sentiment Statistics | |||
| Index | Close | Gain(Loss) | % |
| CBOE Volatility Index | 13.46 | 0.31 | 2.36% |
| CBOE Nasdaq Volatility Index | 18.94 | 0.26 | 1.39% |
| Equity Put-Call Ratio | 0.98 | 0.3 | 44.12% |
| 10-day PCR | 0.77 | 0.05 | 7.49% |
| SPX-VIX Ratio | 88.3 | -2.82 | -3.09% |
Bond Market Analysis
As I mentioned yesterday, Bonds are pretty deeply oversold, and were a candidate for a short-term bounce. The bounce was a bit of a damp squib. The economic data was mixed - trade balance genuinely awful, housing markets strong (despite rising mortgage rates.... I think we're seeing the last gasp of the refi market - which in turn means the last quarter of "house as ATM" cash-out refi, which means lower consumer spending going forward). So the bond market was caught between the possibility of weaker USD driving higher import prices - and therefore stoking inflation as measured by the dodgy government stats crew, who rival the statisticians for Stalin's "Five Year Plan" in outright mendacity - and stronger measured economic activity (measured by the same dodgy crew).
Bonds rose at the long end, with the yield on the benchmark 30-year Treasury bond shedding 2.1 basis points to 4.792%.
| Treasury Yields | |||
| Index | Close | Gain(Loss) | % |
| UST 13wk (yld) | 2.732 | 0 | 0% |
| UST 2Y (yld) | 3.69 | -0.03 | -0.81% |
| UST 5Y (yld) | 4.184 | -0.033 | -0.78% |
| UST 10Y (yld) | 4.518 | -0.024 | -0.53% |
| UST 30Y (yld) | 4.792 | -0.021 | -0.44% |
The Banks Index lost 0.87 points (0.88%), closing at 98.4; within the index,
- Mellon Financial (MEL) -$0.79 (2.64%) to $29.12;
- Golden West Financial (GDW) -$1.09 (1.83%) to $58.61;
- Bank Of America (BAC) -$0.74 (1.62%) to $44.80;
- Keycorp (KEY) -$0.52 (1.57%) to $32.51; and
- MBNA Corp (KRB) -$0.35 (1.39%) to $24.89.
The Broker-dealer Index lost 1.61 points (1.07%), to end the session at 149.46; the ticket clippers lined up as follows -
- Bear Stearns (BSC) -$3.90 (3.68%) to $102.13;
- Lehman Brothers (LEH) -$2.44 (2.54%) to $93.75;
- Ameritrade (AMTD) -$0.18 (1.67%) to $10.58;
- E*Trade (ET) -$0.20 (1.57%) to $12.55; and
- Morgan Stanley (MWD) -$0.90 (1.53%) to $57.95.
The Philadelphia SOX (Semiconductor) index shed 4.2 points (1%), to end the session at 416.92
- Teradyne (TER) -$0.35 (2.34%) to $14.58;
- KLA-Tencor (KLAC) -$0.88 (1.91%) to $45.29;
- Broadcom (BRCM) -$0.50 (1.64%) to $30.01;
- Linear Technology (LLTC) -$0.62 (1.59%) to $38.28; and
- Altera (ALTR) -$0.29 (1.44%) to $19.83.
Gold & Silver Markets
Gold rose $3.00 (0.68%) to close at $444.4 per ounce. Weak USD. End of Story.
The Gold Bugs Index gained 1.51 points (0.69%), at 220.21
- Harmony Gold (HMY) +$0.43 (5.02%) to $9.00;
- Gold Fields (GFI) +$0.57 (4.55%) to $13.10;
- Agnico Eagle (AEM) +$0.43 (2.84%) to $15.55;
- Hecla Mining (HL) +$0.09 (1.54%) to $5.95; and
- Meridian Gold (MDG) +$0.14 (0.79%) to $17.93.
Silver rose $0.05 (0.65%) to close at $7.44 per ounce. The Gold and Silver Index (XAU) gained 0.82 points (0.81%), ending the day at 101.44 points.
- Harmony Gold (HMY) +$0.43 (5.02%) to $9.00;
- Gold Fields (GFI) +$0.57 (4.55%) to $13.10;
- Anglogold Ashanti (AU) +$1.10 (2.93%) to $38.61; and
- Agnico Eagle (AEM) +$0.43 (2.84%) to $15.55.
| Precious Metals and Indices | |||
| Index | Close | Gain(Loss) | % |
| Gold | 444.40 | 3.00 | 0.68% |
| Silver | 7.44 | 0.05 | 0.65% |
| PHLX Gold and Silver Index | 101.44 | 0.82 | 0.81% |
| AMEX Gold BUGS Index | 220.21 | 1.51 | 0.69% |
Oil Market
Despite an inventory build of 2.6million barrels (to a total stockpile of about 305 million barrels), Oil spent the bulk of the session in rally mode - partly because of a weak USD, but mostly because people are waking up to the idea that OPEC has got bugger-all to do with the oil price. They are pumping as fast as they can get the stuff out of the ground. Distillate stocks fell, driven by a sharp increase in the use of heating oil.
I mentioned yesterday that the Iranians have basically taken the view that if the US continues chucking its weight around, it (Iran) will look away from US markets (and the US dollar, presumably). They restated that last night, saying the global high oil prices have a lot to do with America's actions in the region.
This goes to what I've said before - Bush, Cheney et al are not remotely interested in reducing the price of oil. They are interested in increasing the profits of companies to which they are linked (for example, Halliburton). Higher oil prices help the US oil cartels - which means more campaign donations for the Republican Party. Sure, it costs the taxpayer heaps, but almost 40% of them don't vote anyhow, and few of them make significant campaign contributions. So the money gets siphoned from the taxpayer to the corporate donor... and Americans think that is "capitalism". It's not - it's proto-fascistic crony capitalism.
Bu the end of the session the crude market had set a new high, rising by $1.52 per barrel to $56.47 per barrel. The Oil and Gas Index (XOI) added 1.67 points (0.2%), at 853.82
- ConocoPhillips (COP) +$1.80 (1.72%) to $106.51;
- Sunoco (SUN) +$0.79 (0.8%) to $99.60; and
- ChevronTexaco (CVX) +$0.44 (0.76%) to $58.61.
The Oil service stocks (OSX) Index gained 0.18 points (0.13%), ending the day at 137.1
- Global Industries (GLBL) +$0.19 (2.14%) to $8.90;
- Schlumberger (SLB) +$0.75 (1.05%) to $72.30; and
- Noble Corp (NE) +$0.51 (0.92%) to $55.72.
| Energy Complex | |||
| Index | Close | Gain(Loss) | % |
| Reuters CRB | 322.42 | 1.92 | 0.6% |
| Crude Oil Light Sweet | 56.47 | 1.52 | 2.77% |
| Heating Oil | 1.5914 | 0.04 | 2.62% |
| Natural Gas | 7.2 | 0.03 | 0.46% |
| Unleaded Gas | 1.5476 | 0.05 | 3.03% |
| AMEX Oil Index | 853.82 | 1.67 | 0.2% |
| Oil Service Index | 137.1 | 0.18 | 0.13% |
Currency Markets
| USD Exchange Rates | |||
| Index | Close | Gain(Loss) | % |
| US Dollar Index | 81.59 | -0.55 | -0.67% |
| Euro | 1.3415 | 0.0111 | 0.83% |
| Yen | 104.15 | -0.42 | -0.4% |
| Sterling | 1.9258 | 0.0143 | 0.75% |
| Australian Dollar | 0.7933 | 0.0031 | 0.39% |
| Swiss Franc | 1.1526 | -0.0129 | -1.11% |
| Canadian Dollar | 0.8293 | 0.0016 | 0.19% |
