Note - from June 24th 2009, this blog has migrated from Blogger to a self-hosted version. Click here to go straight there.
Federal Reserve Open Market Operations
The Fed's Open Market Operations desk performed 1 repurchase operation.
- a $8.25billion, overnight repurchase entirely in T-backed collateral.
Now that's more like the juice the market required.
Major US Indices
Big repo; oversold market; end of quarter window-dressing. Not a big surprise that the market rallied.
Here, pig pig pig pigpigpigpig piggie! Sooooo-EEEE! Come git your face on - it's time for mutual fund statements.
The Dow Jones Industrial Average gained 135.23 points (1.3%), closing out the day at 10540.93 points. The index hit an intraday high of 10544.18, and the session low (10404.81) was set at the open.
Within the blue-chip index, 29 stocks rose, the biggest gainers being General Motors (GM, +3.11% to $29.50) and Procter & Gamble (PG, +2.89% to $53.36), which accounted for 18 Dow points between them. The only loser in the Dow was American International Group (AIG, -1.79% to $57.16) which contributed -7 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the gainers by 374m shares to 24.7m.
Now AIG is an interesting kettle of fish; last night it confessed to "mistakes" that "may have inflated" the company's position by about 2% (i.e., about $1.7billion).
Now these "errors" weren't things you would normally consider an "error"... you know, typos, spelling mistakes, or forgetting to carry the one when doing longhand addition. No. They were the deliberate misclassification of transactions with BERKSHIRE HATHAWAY. Those transactions were deliberately misclassified to COOK THE BOOKS.
"Error", my arse. Someone should go to frigging JAIL for this. And the broght spark who tried to Blair-ise the announcement (FRAUD becoming ERROR) should be sent to Iraq without body armour (so should Blair - but only because he would enjoy Gitmo too much... the anal rape and all those other non-Geneva-Convention-breaking "interrogation techniques").
As usual, the gutless wonders at the ratings agencies dropped the ball, reacting AFTER AIG's announcement. (Do they ever act before the shit hits the fan?)
S&P cut AIG's AAA rating; Fitch said it may re-rate AIG too. Why does anybody even listen to these dickheads? Ratings are supposed to be forward looking.
Next thing S&P will tell us that they've downgraded Enron... They ought to change the definition of each rating to read something like "Securities rated C by Standard & Poors will reflect the default characteristics of a B-rated security, half a day after the B-rated security declares bankruptcy."
The big ratings houses have missed every big-ticket fan-splat in the last ten years. They should just shut up shop and quit embarrassing themselves. (Still, it bodes well for my upcoming decision to find a high-yield ETF to buy puts over... of which more later this week).
The broader S&P500 added 16.05 points (1.38%), ending the day at 1181.41. Over at Times Square, the Nasdaq Composite added 31.79 points (1.61%), to close at 2005.67, while larger-cap technology issues fared better with the Nasdaq100 adding 27.4 points (1.87%), to end at 1491.74 points.
NYSE Volume was super-chunky, with 2.08 billion shares changing hands, while Nasdaq Volume was only chunky, with 1.73 billion shares being shifted from one online brokerage account to another (and back again, in all likelihood).
I'm not sure what you would call the shade of lipstick that got slathered onto the piggie; vermillion? (Oh, I crack myself up...)
| Major Market Statistics | |||
| Index | Close | Gain(Loss) | % |
| Dow Jones Industrial Average | 10540.93 | 135.23 | 1.3% |
| S&P500 | 1181.41 | 16.05 | 1.38% |
| Nasdaq Composite | 2005.67 | 31.79 | 1.61% |
| Nasdaq100 | 1491.74 | 27.4 | 1.87% |
| NYSE Volume | 2.08bn | - | - |
| Nasdaq Volume | 1.73bn | - | - |
Bellwethers
My 9-stock "bellwethers" group rose by an average of 1.51%
- General Electric (GE) +$0.67 (1.89%) to $36.20;
- Citigroup (C) +$0.57 (1.29%) to $44.92;
- Wal Mart (WMT) +$0.07 (0.14%) to $50.84;
- I.B.M. (IBM) +$0.08 (0.09%) to $90.68;
- Intel (INTC) +$0.34 (1.47%) to $23.49;
- Cisco Systems (CSCO) +$0.28 (1.58%) to $18.03;
- eBay (EBAY) +$1.59 (4.4%) to $37.69;
- Fannie Mae (FNM) +$0.45 (0.82%) to $55.15; and
- Freddie Mac (FRE) +$1.20 (1.91%) to $63.90.
Market Breadth & Internals
Even the breadth looks like tape-painting...
NYSE advancing Issues exceeded decliners by 2516 to 776 for an utterly insane single-day A/D reading of +1740; Nasdaq gainers trumped losers by 2129 to 950. The 10-day moving average of the A/D line rose to -275.9 on the NYSE, while the 10dma of the Nasdaq A/D rose to -245.3.
NYSE advancing volume exceeded volume in decliners by 1720.5 to 322.7 million shares; Nasdaq advancing volume was greater than volume in decliners by 1383.9 to 214.7 million shares.
26 NYSE-listed stocks rose to new 52-week highs, and 52 posted fresh 52-week lows, while on the Nasdaq there were 32 stocks that hit new 52-week highs, and 90 which fell to fresh 52-week lows.
| Market Breadth Statistics | ||
| NYSE | Nasdaq | |
| Advancers | 2516 | 2129 |
| Decliners | 776 | 950 |
| Advancing Volume (m) | 1720.51 | 1383.92 |
| Declining Volume (m) | 322.7 | 214.73 |
| New Highs | 26 | 32 |
| New Lows | 52 | 90 |
| Market Sentiment Statistics | |||
| Index | Close | Gain(Loss) | % |
| CBOE Volatility Index | 13.66 | -0.83 | -5.73% |
| CBOE Nasdaq Volatility Index | 17.37 | -0.62 | -3.45% |
| Equity Put-Call Ratio | 0.75 | -0.06 | -7.41% |
| 10-day PCR | 0.74 | 0 | 0.43% |
| SPX-VIX Ratio | 86.5 | 6.06 | 7.54% |
Bond Market Analysis
GDP was weaker than expected (actual 3.8%; consensus 4%), but the deflator was worse than expecterd (actual 2.3%, expected 2.1%). The bond market rose consistently through the session, after the usual "fakeout" immediately after the data. Neither of yesterday's 2 "big move" scenarios played out: growth was slower than expected (good for bonds) but the second half of a "bounce catalyst" (lower than expected GDP inflation) didn't happen. So the data was "mixed"which means that the underlying short-term trend (a bounce) should have been the "default". It doesn't matter, since there was no actionable "non-advice".
Bonds rose from the 5-year to the long end, with the yield on the benchmark 30-year Treasury bond shedding 4.5 basis points to 4.807%. Five-year yields are looking set to test 4.25% again - this time as support (resistance for prices). Since my "below 110 by June" target for the long bond has already been hit, I haven't really looked hard at upside targets... I might do that his weekend.
| Treasury Yields | |||
| Index | Close | Gain(Loss) | % |
| UST 13wk (yld) | 2.762 | 0 | 0% |
| UST 2Y (yld) | 3.82 | 0 | 0% |
| UST 5Y (yld) | 4.257 | -0.029 | -0.68% |
| UST 10Y (yld) | 4.558 | -0.033 | -0.72% |
| UST 30Y (yld) | 4.807 | -0.045 | -0.93% |
The Banks Index added 1.27 points (1.33%), ending the day at 96.44; within the index,
- North Fork Bancorp (NFB) +$0.67 (2.46%) to $27.87;
- M&T Bank Corp (MTB) +$2.24 (2.26%) to $101.44;
- State Street (STT) +$0.90 (2.11%) to $43.51;
- Zions Bancorp (ZION) +$1.42 (2.11%) to $68.66; and
- Keycorp (KEY) +$0.65 (2.06%) to $32.25.
The Broker-dealer Index added 2.37 points (1.66%), at 144.85; the ticket clippers lined up as follows -
- Charles Schwab (SCH) +$0.34 (3.36%) to $10.47;
- Morgan Stanley (MWD) +$1.67 (3.12%) to $55.28;
- Jeffries Group (JEF) +$0.87 (2.36%) to $37.66;
- E*Trade (ET) +$0.25 (2.13%) to $11.99; and
- Bear Stearns (BSC) +$1.84 (1.88%) to $99.84.
The Philadelphia SOX (Semiconductor) index advanced 9.5 points (2.32%), closing at 419.66
- Altera (ALTR) +$0.56 (2.91%) to $19.81;
- Advanced Micro Devices (AMD) +$0.79 (5.12%) to $16.21;
- Teradyne (TER) +$0.58 (4.07%) to $14.82;
- Micron Technology (MU) +$0.36 (3.56%) to $10.48; and
- KLA-Tencor (KLAC) +$1.40 (3.1%) to $46.59.
Gold & Silver Markets
Gold was unchanged at $426 per ounce. It's increasingly risky to hold long-side exposure to Gold, and in all likelihood $400 is not going to hold (at least, in the June futures). There is emerging technical evidence of an impending break; too many newcomers to the market are on the same side of the boat; and intermarket considerations (the US Dollar's likely contrarian rise). All three are all working against Gold.
Gold Bugs Index advanced 3.25 points (1.66%), ending the day at 199.15
- Randgold Resources (GOLD) +$0.44 (3.8%) to $12.02;
- Meridian Gold (MDG) +$0.55 (3.46%) to $16.46;
- Golden Star (GSS) +$0.09 (3.41%) to $2.73;
- Glamis Gold (GLG) +$0.42 (2.77%) to $15.60; and
- Freeport McMoran (FCX) +$0.98 (2.59%) to $38.84.
Silver rose $0.15 (2.15%) to close at $7.14 per ounce. The Gold and Silver Index (XAU) gained 1.31 points (1.43%), to end the session at 93.23 points.
- Meridian Gold (MDG) +$0.55 (3.46%) to $16.46;
- Freeport McMoran (FCX) +$0.98 (2.59%) to $38.84;
- Agnico Eagle (AEM) +$0.32 (2.27%) to $14.39; and
- Newmont Mining (NEM) +$0.93 (2.24%) to $42.41.
| Precious Metals and Indices | |||
| Index | Close | Gain(Loss) | % |
| Gold | 426.00 | 0.00 | 0% |
| Silver | 7.14 | 0.15 | 2.15% |
| PHLX Gold and Silver Index | 93.23 | 1.31 | 1.43% |
| AMEX Gold BUGS Index | 199.15 | 3.25 | 1.66% |
Oil Market
Oil lost ground, shedding $0.18 per barrel, closing at $54.07 per barrel. The oil inventory data relased showed a large (5.7m barrel) increase in inventories, but distillate inventories fell quite shrply; that's part of the reason that while Crude fell, the rest of the energy complex rose.
The Oil and Gas Index (XOI) gained 10.53 points (1.27%), to 840.16
- Unocal (UCL) +$1.62 (2.72%) to $61.28;
- Sunoco (SUN) +$1.75 (1.77%) to $100.49; and
- ConocoPhillips (COP) +$1.80 (1.74%) to $105.43.
The Oil service stocks (OSX) Index added 1.31 points (0.98%), closing at 135.11
- Transocean (RIG) +$1.12 (2.35%) to $48.86;
- Global Industries (GLBL) +$0.20 (2.21%) to $9.27; and
- Weatherford International (WFT) +$0.90 (1.64%) to $55.85.
| Energy Complex | |||
| Index | Close | Gain(Loss) | % |
| Reuters CRB | 311.02 | 2.09 | 0.68% |
| Crude Oil Light Sweet | 54.07 | -0.18 | -0.33% |
| Heating Oil | 1.6045 | 0.05 | 2.92% |
| Natural Gas | 7.47 | 0.15 | 2.01% |
| Unleaded Gas | 1.598 | 0.03 | 1.59% |
| AMEX Oil Index | 840.16 | 10.53 | 1.27% |
| Oil Service Index | 135.11 | 1.31 | 0.98% |
Currency Markets
| USD Exchange Rates | |||
| Index | Close | Gain(Loss) | % |
| US Dollar Index | 84.38 | 0.03 | 0.04% |
| Euro | 1.2922 | -0.0001 | -0.01% |
| Yen | 107.48 | -0.03 | -0.03% |
| Sterling | 1.8791 | 0.0056 | 0.3% |
| Australian Dollar | 0.7705 | 0.0001 | 0.01% |
| Swiss Franc | 1.199 | -0.0031 | -0.26% |
| Canadian Dollar | 0.822 | -0.0032 | -0.39% |
