Note - from June 24th 2009, this blog has migrated from Blogger to a self-hosted version. Click here to go straight there.
Blogger has been worse-than-useless for the last two hours; it's almost a waste of time trying to get things prepared in a timely fashion, then to have everything held up for hours because of someone else's incompetence (today's USRant was ready for publication at 7:52 a.m. AEST). In other words, it's almost time to shift the entire shebang to my own hosting setup. At least then, any holdups will be my own fault.
Federal Reserve Open Market Operations
The Fed's Open Market Operations desk performed 2 repurchase operations.
- a $5.75billion, overnight repurchase with $1.802billion in T-backed collateral ; and
- a $3billion, 3-day repurchase with $1.05billion in T-backed collateral .
Yet again, the overwhelming preponderance of repurchase dollars went to the Agency-backed markets, although the mortgage-backed market also got a total of over $3.5bill, which is large for that market.
There is clearly a dislocation in the mortgage and agency markets that nobody is yet aware of; anyone who watched the energy pricing markets during he period when Kenneth Lay was constantly on the phone to then-Treasury-Sec John Snow, will now spot the crisis-in-the-making. As yet, nobody smells the blood in the water (because there are only about 20 genuinely independent people on the planet who bother looking at repurchase data each day)... but that will change. anyone with exposure to mortgage backed securities is going to get massacred (and they're getting hurt already).
Major US Indices
The Dow Jones Industrial Average slid 79.95 points (0.76%), closing out the day at 10405.7 points. The index hit an intraday high of 10520.84 at about 10:45 a.m., and fell as low as 10396.24 during the session. The low was set 6 minutes before the close, and only a deliberate effort enabled the 9 point bump needed to generate a close above 10400.
Within the blue-chip index, only 6 stocks rose, the biggest gainers being Hewlett Packard (HPQ, up an insane +10.06% to $21.78) and American International Group (AIG, +2.07% to $58.20), which accounted for 23 Dow points between them. HPQ's rise was solely due to the appointment of a new CEO to replace that hopeless trout Fiorina. So it's all schmiles und sunschine for the newcomer - who the hell the market gives a flying rat's ass, I will never know. It just means a different bank account fo the unconscionable golden parachute that this dill will get whether he wins, loses or draws.
Losers in the Dow numbered 24 and were led by Caterpillar (CAT, -4.69% to $89.80) and Home Depot (HD, -2.33% to $37.69), with these two stocks contributing -39 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the losers by332.1m shares to 110.3m.
The broader S&P500 lost 8.92 points (0.76%), ending the day at 1165.36; the front-month S&P futures made a new low for the year - just as I said it would during the rally above 1200. The cash index also posted a new low for the year at 1163.69 , a hair below the 1163.75 low (and close) of January 24th. In contrast, the Dow's low today of 10396.24 is more than 3/4 of a percent above its year-to-date low (also set on January 24th) of 10317.10 points.
Over at Times Square, the Nasdaq Composite lost 18.64 points (0.94%), to close at 1973.88, while larger-cap technology issues fared better with the Nasdaq100 losing 8.37 points (0.57%), to end at 1464.34 points.
NYSE Volume was super-chunky, with 2.2 billion shares changing hands, while Nasdaq Volume was barely chunky, 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) | % |
| Dow Jones Industrial Average | 10405.7 | -79.95 | -0.76% |
| S&P500 | 1165.36 | -8.92 | -0.76% |
| Nasdaq Composite | 1973.88 | -18.64 | -0.94% |
| Nasdaq100 | 1464.34 | -8.37 | -0.57% |
| NYSE Volume | 2.2bn | - | - |
| Nasdaq Volume | 1.83bn | - | - |
Bellwethers
My 9-stock "bellwethers" group fell by an average of 0.53%
- General Electric (GE) -$0.44 (1.22%) to $35.53;
- Citigroup (C) -$0.42 (0.94%) to $44.35;
- Wal Mart (WMT) -$0.22 (0.43%) to $50.77;
- I.B.M. (IBM) -$0.44 (0.48%) to $90.60;
- Intel (INTC) -$0.15 (0.64%) to $23.15;
- Cisco Systems (CSCO) -$0.14 (0.78%) to $17.75;
- eBay (EBAY) +$0.19 (0.53%) to $36.10;
- Fannie Mae (FNM) -$0.18 (0.33%) to $54.70; and
- Freddie Mac (FRE) -$0.30 (0.48%) to $62.70.
Market Breadth & Internals
NYSE declining issues beat out advancers by 2235 to 1062, for a single-day A/D reading of -1173; and Nasdaq losers exceeded gainers by 2272 to 837. The 10-day moving average of the A/D line fell to -718.5 on the NYSE, while the 10dma of the Nasdaq A/D fell to -558.0.
On the NYSE declining volume was greater than volume in advancing issues by 1633.2 to 541.2 million shares; On the Nasdaq declining volume exceeded volume in advancing issues by 1365.2 to 421.8 million shares.
25 NYSE-listed stocks rose to new 52-week highs, and 90 posted fresh 52-week lows, while on the Nasdaq there were 44 stocks that hit new 52-week highs, and 132 which fell to fresh 52-week lows.
| Market Breadth Statistics | ||
| NYSE | Nasdaq | |
| Advancers | 1062 | 837 |
| Decliners | 2235 | 2272 |
| Advancing Volume (m) | 541.23 | 421.8 |
| Declining Volume (m) | 1633.19 | 1365.17 |
| New Highs | 25 | 44 |
| New Lows | 90 | 132 |
| Market Sentiment Statistics | |||
| Index | Close | Gain(Loss) | % |
| CBOE Volatility Index | 14.49 | 0.74 | 5.38% |
| CBOE Nasdaq Volatility Index | 17.99 | 0.25 | 1.41% |
| Equity Put-Call Ratio | 0.81 | 0.25 | 44.64% |
| 10-day PCR | 0.73 | 0.02 | 2.65% |
| SPX-VIX Ratio | 80.4 | -4.98 | -5.83% |
Bond Market Analysis
The bounce that I forecast last week continued, but it is pretty anaemic. The long bond futures got back above 110 by the close, though - and with GDP out tomorrow there's a good chance that any disappointment (relative to expectations) will see bonds get some serious upwards momentum. Consensus is guessing 4% (annualised) GDP growth, and a GDP deflator in the 2.1% range. If growth is lower and the deflator comes in under 2%, bonds will rocket. If growth is faster and the deflator comes in at over 2.3%, bonds will plummet.
Today, bonds rose right along the curve. The yield on the benchmark 30-year Treasury bond shed 2.6 basis points to 4.852%, and both the 10-year and the 5-year yield held above what will now turn into support for yields (resistance for prices). 2year botes are getting perilously close to 4% yield, too. That level, when breached, will adversely impact the short end of the mortgage spectrum (the 2-5year ARMs).
| Treasury Yields | |||
| Index | Close | Gain(Loss) | % |
| UST 13wk (yld) | 2.772 | 0 | 0% |
| UST 2Y (yld) | 3.82 | -0.04 | -1.04% |
| UST 5Y (yld) | 4.286 | -0.037 | -0.86% |
| UST 10Y (yld) | 4.591 | -0.033 | -0.71% |
| UST 30Y (yld) | 4.852 | -0.026 | -0.53% |
The Banks Index slid 0.54 points (0.56%), closing at 95.17; within the index,
- MBNA Corp (KRB) -$0.36 (1.47%) to $24.17;
- Zions Bancorp (ZION) -$0.65 (0.96%) to $67.24;
- Citigroup (C) -$0.42 (0.94%) to $44.35;
- Comerica (CMA) -$0.50 (0.92%) to $53.75; and
- Bank Of America (BAC) -$0.40 (0.9%) to $43.89.
The Broker-dealer Index shed 2.26 points (1.56%), to end the session at 142.48; the ticket clippers lined up as follows -
- E*Trade (ET) -$0.43 (3.53%) to $11.74;
- Morgan Stanley (MWD) -$1.87 (3.37%) to $53.61;
- Raymond James (RJF) -$0.63 (2.03%) to $30.39;
- Legg Mason (LM) -$1.27 (1.63%) to $76.74; and
- A G Edwards (AGE) -$0.58 (1.34%) to $42.69.
The Philadelphia SOX (Semiconductor) index declined 5.34 points (1.29%), at 410.16
- Teradyne (TER) -$0.47 (3.2%) to $14.24;
- Taiwan Semiconductors (TSM) -$0.20 (2.37%) to $8.25;
- Infineon Tech (IFX) -$0.20 (2.09%) to $9.36;
- Marvell Tech Group (MRVL) -$0.75 (2%) to $36.83; and
- Maxim Integrated (MXIM) -$0.74 (1.8%) to $40.46.
Gold & Silver Markets
Gold rose $0.30 (0.07%) to close at $426 per ounce. It's really in no-man's land at the moment; both bulls and bears are sitting in their trenches waiting for some inbred syphilitic wanker to blow the whistle and send them "over the top". It's my view that any ground gained will be similar to the Allies at the Somme... a bloody interim defeat for the little guy. I've said repeatedly that I can't see any decent upwards move in Gold prices while the USD is rallying... without that, any bull action is just gold-bug hope.
Gold Bugs Index lost 1.49 points (0.75%), ending the day at 195.9
- Eldorado Gold (EGO) -$0.10 (3.53%) to $2.73;
- Freeport McMoran (FCX) -$0.77 (1.99%) to $37.86;
- Randgold Resources (GOLD) -$0.18 (1.53%) to $11.58;
- Harmony Gold (HMY) -$0.12 (1.52%) to $7.76; and
- Gold Fields (GFI) -$0.14 (1.21%) to $11.47.
Silver rose $0.08 (1.19%) to close at $6.99 per ounce. The Gold and Silver Index (XAU) lost 0.67 points (0.72%), to end the session at 91.92 points.
- Freeport McMoran (FCX) -$0.77 (1.99%) to $37.86;
- Anglogold Ashanti (AU) -$0.54 (1.56%) to $34.17;
- Harmony Gold (HMY) -$0.12 (1.52%) to $7.76; and
- Gold Fields (GFI) -$0.14 (1.21%) to $11.47.
| Precious Metals and Indices | |||
| Index | Close | Gain(Loss) | % |
| Gold | 426.00 | 0.30 | 0.07% |
| Silver | 6.99 | 0.08 | 1.19% |
| PHLX Gold and Silver Index | 91.92 | -0.67 | -0.72% |
| AMEX Gold BUGS Index | 195.9 | -1.49 | -0.75% |
Oil Market
Oil was firmer, rising by $0.52 per barrel, closing at $54.25 per barrel. The Oil and Gas Index (XOI) slid another 7.39 points (0.88%), at 829.63
- Sunoco (SUN) -$2.32 (2.3%) to $98.74;
- Kerr Mcgee (KMG) -$1.22 (1.56%) to $76.76; and
- ConocoPhillips (COP) -$1.62 (1.54%) to $103.63.
The Oil service stocks (OSX) Index declined 3.38 points (2.46%), ending the day at 133.8
- Rowan Companies (RDC) -$1.02 (3.46%) to $28.50;
- Schlumberger (SLB) -$2.30 (3.25%) to $68.50; and
- Nabors Industries (NBR) -$1.87 (3.19%) to $56.75.
| Energy Complex | |||
| Index | Close | Gain(Loss) | % |
| Reuters CRB | 308.93 | 1.57 | 0.51% |
| Crude Oil Light Sweet | 54.25 | 0.52 | 0.97% |
| Heating Oil | 1.559 | 0.02 | 1.3% |
| Natural Gas | 7.323 | 0.3 | 4.33% |
| Unleaded Gas | 1.573 | 0 | 0.19% |
| AMEX Oil Index | 829.63 | -7.39 | -0.88% |
| Oil Service Index | 133.8 | -3.38 | -2.46% |
Currency Markets
It's unlikely that the USD bounce is finished with quite yet - on the "anyone who is on the same side of the market as journalists always get absolutely killed" hypothesis alone. When you have a gander at the Commitments of Traders data, you notice that a lot of small (non-reportable) traders are long against the USD; add that to the newbies in the "spot" forex market (many of which are bucket shops - which is fine, so long as you're aware of it going in) and you end up with a load of thinly-capitalised USD shorts. A fine recipe for an ongoing bloodbath.
(I've said before though... since the USD was better than 100 on the USDX... the USD is going back to the levels it was at during the "Japanese Tiger" period; 85 yen or even lower - but it's not going to get there while nuffnuffs are short USD).
| USD Exchange Rates | |||
| Index | Close | Gain(Loss) | % |
| US Dollar Index | 84.35 | -0.19 | -0.22% |
| Euro | 1.2923 | 0.0045 | 0.35% |
| Yen | 107.51 | 0.16 | 0.15% |
| Sterling | 1.8735 | 0.008 | 0.43% |
| Australian Dollar | 0.7704 | 0.0029 | 0.38% |
| Swiss Franc | 1.2021 | -0.003 | -0.25% |
| Canadian Dollar | 0.8252 | 0.0036 | 0.44% |
