Interdum stultus opportuna loquitur...

Monday, April 25, 2005

USRant: Nothing Blew Up, So....

Note - from June 24th 2009, this blog has migrated from Blogger to a self-hosted version. Click here to go straight there.

There is some interesting work on caloric expenditure in humans. It estimates that as much as 25% of the caloric expenditure of the human body, is used to run our brains. Perhaps it helps explain why people who are stressed a lot, put on less weight per 'excess calorie' consumed, than others.

It also explains American obesity - if you've switched your brain off, 25% of the calories you take in either go down the poo-chute, or straight to the midriff. And it's pretty clear that Homo Boobus Americanus has switched the brain to the off position.

That strange 90-point Dow rally on Friday, for instance. Turns out that nobody wanted to be short the market if North Korea didn't test a nukular weapon. The very idea of the NK's doing so is ludicrous, and is entirely a sideshow to keep the population shit-scared about nukular weapons, so that as the volume of propaganda is turned up on IRAN, they've got a scary association (nukular weapons) already.

Yes, that's right - the whole "NK will test this weekend" is another Likudnik-OSP Special - drawn from the same swill-bucket that gave us Ahmad Chalabi and Curveball. The Yanks are going to go into Iran in June (or they will have Israel do it).

Anyhow - that's apparently the reason for Friday's closing spurt - the realisation by some clever traders at one big desk that the NK story was bogus. This morning was just the nuffnuffs joining in the party, with those switches stuck on "Off". As Juvenal (from memory) once said... "to the latecomers, the bones".

Federal Reserve Open Market Operations

The Fed's Open Market Operations desk performed 1 repurchase operation - a $5.25billion, overnight repurchase with $4.518billion in T-backed collateral. Not really enough to get excited about - which it why the markets didn't get far beyond their 10 a.m. levels.

Major US Indices

The Dow Jones Industrial Average posted a rise of 84.76 points (0.83%), closing out the day at 10242.47 points. It was a pretty typical Monday, with the opening orgasm exacerbated by the nuffnuff geopolitical analysis about North Korea (think harder, nuffies... why would Kim Jong Il waste precious fissile material on a show? He may be crazy, but he's not a closet bisexual with an over-compensating cowboy swagger; he wouldn't deliberately do stuff to the detriment of his administration.

See these days, nukular weapons are built in software before anybody even requires reproceesed uranium. If you can build it to the point where you can test it live, it means you can test it in software. If it works in a software test, it will work in real life: this is not the 1940s at Los Alamos. These days, the only reason for testing a weapon is to let folks know you have one, and KJI doesn't give a crap if people know he has nukes or not; he just needs there to be doubt in the US Administration's mind (and there already is).

The index hit an intraday high of 10260.2 just after 10:15 NY time, after opening at its low (10158.52 - remember though - the Dow's opening number is an artifact of the opening process - the Dow is held at yesterday's close, then amended as each of the Dow components opens in its turn).

By 3 p.m. there looked to be a serious risk of a collapse to new intraday lows (both tech indices had made fresh intraday lows by 3:15 p.m., whereas the S&P and Dow had not), but a 50-point rally in the last forty minutes put paid to that.

Within the blue-chip index, 25 stocks rose, the biggest gainers being Boeing (BA, +2.94% to $59.58) and American International Group (AIG, +2.80% to $51.76), which accounted for 23 Dow points between them. Losers in the Dow numbered 4 and were led by Merck (MRK, -0.82% to $33.92) and Pfizer (PFE, -0.70% to $27.03), with these two stocks contributing -3 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the gainers by 286.2m shares to 42m.

The broader S&P500 added 9.98 points (0.87%), to 1162.1. Within the index, gainers numbered 422, while 73 S&P500 stocks fell for the day. Volume was tilted 4.2:1 in favour of the winners with 1322.27 million units traded in the winners as compared with 313.69 million traded in the losers .

Over at Times Square, the Nasdaq Composite advanced 18.59 points (0.96%), to close at 1950.78, while larger-cap technology issues fared better with the Nasdaq100 adding 16.1 points (1.13%), to end at 1437.31 points. Within the tech benchmark, gainers numbered 80, while 18 Nasdaq100 stocks fell for the day. Volume was tilted 5.8:1 in favour of the winners with 570.76 million traded in the winners compared to 97.92 million in the losers .

NYSE Volume was chunky, with 1.79 billion shares changing hands, while Nasdaq Volume was about average, with 1.44 billion shares being shifted from one online brokerage account to another (and back again, in all likelihood).

Major Market Statistics
Dow Jones Industrial Average10242.4784.760.83%
Nasdaq Composite1950.7818.590.96%
NYSE Volume1.79bn--
Nasdaq Volume1.44bn--


My 9-stock "bellwethers" group rose by an average of 0.74%

  • General Electric (GE) +$0.28 (0.78%) to $36.38;
  • Citigroup (C) +$0.46 (0.99%) to $46.78;
  • Wal Mart (WMT) +$0.21 (0.45%) to $47.02;
  • I.B.M. (IBM) +$0.40 (0.54%) to $74.61;
  • Intel (INTC) +$0.17 (0.73%) to $23.41;
  • Cisco Systems (CSCO) +$0.05 (0.29%) to $17.48;
  • eBay (EBAY) +$0.04 (0.13%) to $31.55;
  • Fannie Mae (FNM) +$0.75 (1.42%) to $53.53; and
  • Freddie Mac (FRE) +$0.78 (1.3%) to $60.95.

Market Breadth & Internals

NYSE advancing Issues exceeded decliners by 2299 to 1027 for a single-day A/D reading of 1272; Nasdaq gainers trumped losers by 1828 to 1255. The 10-day moving average of the A/D line rose to 134.7 on the NYSE, while the 10dma of the Nasdaq A/D rose to -154.1.

NYSE advancing volume exceeded volume in decliners by 1248.8 to 395.5 million shares; Nasdaq advancing volume was greater than volume in decliners by 1014.5 to 359.9 million shares.

48 NYSE-listed stocks rose to new 52-week highs, and 52 posted fresh 52-week lows, while on the Nasdaq there were 39 stocks that hit new 52-week highs, and 115 which fell to fresh 52-week lows.

Market Breadth Statistics

Advancing Volume (m)1248.751014.5
Declining Volume (m)395.5359.92
New Highs4839
New Lows52115

Market Sentiment Statistics
CBOE Volatility Index14.63-0.75-4.88%
CBOE Nasdaq Volatility Index18.54-0.5-2.63%
Equity Put-Call Ratio0.5800%
10-day PCR0.71-0.03-4.44%
SPX-VIX Ratio79.44.526.04%

Bond Market Analysis

Bonds rose at the long end, with the yield on the benchmark 30-year Treasury bond shedding 2.4 basis points to 4.556%.

The middle of the yield curve was mixed: five year yields rose to 3.937%, and ten-year yields fell to 4.251%.

Spreads between short-dated (2-yr) Treasuries and high-grade corporate bonds of similar maturity profiles were 2.0 bps tighter at a measly 8 basis points; spreads between longer dated Treasuries and their corporate AAA counterparts fell to 57.0 basis points for 10-year AAA, and 80.0 basis points for 20-years.

Credit spreads (spreads between corporate bonds of the same maturity profile but different creditworthiness) were broadly tighter with the AAA-A spread on 20-years 17.0 basis points looser at 54.0 basis points and the 10-year AAA-A spread 1 bps wider at 1.0 basis points. One single basis point of additional yield, for two steps out the risk spectrum. Madness.

Treasury Yields
UST 13wk (yld)2.83200%
UST 2Y (yld)3.620.030.84%
UST 5Y (yld)3.9370.0160.41%
UST 10Y (yld)4.251-0.004-0.09%
UST 30Y (yld)4.556-0.024-0.52%

The Banks Index posted a rise of 1.08 points (1.13%), ending the day at 96.24; within the index,

  • Washington Mutual (WM) +$1.19 (3.07%) to $40.00;
  • MBNA Corp (KRB) +$0.50 (2.71%) to $18.95;
  • Golden West Financial (GDW) +$1.25 (2.05%) to $62.32;
  • Fifth Third Bancorp (FITB) +$0.74 (1.77%) to $42.54; and
  • Zions Bancorp (ZION) +$1.08 (1.58%) to $69.23.

The Broker-dealer Index added 2.48 points (1.83%), closing at 138.2; the ticket clippers lined up as follows -

  • Lehman Brothers (LEH) +$2.53 (2.8%) to $93.00;
  • Jeffries Group (JEF) +$0.93 (2.61%) to $36.61;
  • Legg Mason (LM) +$1.85 (2.58%) to $73.48;
  • Charles Schwab (SCH) +$0.24 (2.42%) to $10.14; and
  • E*Trade (ET) +$0.26 (2.36%) to $11.29.

The Philadelphia SOX (Semiconductor) index rose 2.09 points (0.54%), to end the session at 391.44

  • Micron Technology (MU) +$0.17 (1.81%) to $9.58;
  • Infineon Tech (IFX) +$0.15 (1.66%) to $9.18;
  • Broadcom (BRCM) +$0.40 (1.34%) to $30.32;
  • Altera (ALTR) +$0.24 (1.26%) to $19.25; and
  • ST Microelectronic (STM) +$0.14 (0.89%) to $15.80.

Gold & Silver Markets

Gold rose $0.30 (0.07%) to close at $434.60 per ounce. Nothing much of note here, except to say that the Gold futures market is surprisingly thin at the moment - all it will take is for someone to stick their foot on Gold's neck and the streets will be awash with the blood of the nuffnuff.

Gold Bugs Index rose 0.38 points (0.2%), to 189.12

  • Freeport McMoran (FCX) +$0.95 (2.62%) to $37.19;
  • Meridian Gold (MDG) +$0.41 (2.6%) to $16.15;
  • Eldorado Gold (EGO) +$0.05 (2.06%) to $2.48;
  • Agnico Eagle (AEM) +$0.27 (1.99%) to $13.86; and
  • Hecla Mining (HL) +$0.08 (1.58%) to $5.13.

Silver fell by $0.02 (0.21%) to close at $7.26 per ounce. The Gold and Silver Index (XAU) gained 0.19 points (0.21%), at 88.58 points.

  • Freeport McMoran (FCX) +$0.95 (2.62%) to $37.19;
  • Meridian Gold (MDG) +$0.41 (2.6%) to $16.15;
  • Agnico Eagle (AEM) +$0.27 (1.99%) to $13.86; and
  • Placer Dome (PDG) +$0.20 (1.35%) to $15.02.
Precious Metals and Indices
PHLX Gold and Silver Index88.580.190.21%
AMEX Gold BUGS Index189.120.380.2%

Oil Market

Oil lost ground, shedding $0.37 per barrel, closing at $54.20 per barrel. It looks as if it lost a lot more (because on Friday it was listed at over $55) - but that's because the front-month futures have rolled over from May to June, and Crude futures are in backwardation.

The Oil and Gas Index (XOI) added 11.48 points (1.37%), to end the session at 849.1

  • Occidental Petroleum (OXY) +$1.92 (2.69%) to $73.39;
  • Amerada Hess (AHC) +$2.46 (2.57%) to $98.08; and
  • Sunoco (SUN) +$2.59 (2.56%) to $103.65.

The Oil service stocks (OSX) Index rose 1.68 points (1.23%), to 138.8

  • Cooper Cameron (CAM) +$1.45 (2.59%) to $57.37;
  • BJ Services (BJS) +$1.12 (2.11%) to $54.19; and
  • National Oilwells/Varco (NOV) +$0.87 (2.03%) to $43.69.
Energy Complex
Crude Oil Light Sweet54.2-0.37-0.68%
Heating Oil1.511-0.01-0.47%
Natural Gas7.130-0.03%
Unleaded Gas1.639-0.01-0.71%
AMEX Oil Index849.111.481.37%
Oil Service Index138.81.681.23%

Currency Markets

USD Exchange Rates
US Dollar Index83.770.280.34%
Australian Dollar0.7793-0.0025-0.32%
Swiss Franc1.18720.00620.52%
Canadian Dollar0.8078-0.002-0.25%