Interdum stultus opportuna loquitur...

Monday, May 09, 2005

USRant: Another Late Bump-Up for the Masses...

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

My view of the world has always been made pretty clear: that the US is a declining state (all states are declining forms of society). Part of the process of decline is the increasing rubberiness of "official statistics" - like last Friday's jobs data. Oh how I wish that the RantCave relocation could have been complete on Saturday morning (AEST), so that I could  have made sure that all readers were well aware that the US New Non-Farm Payrolls figures were absolute hovno

You see, of the supposed 274,000 new jobs created, over 250,000 were created out of thin air.  You may have read elsewhere in  these pages of my disdain for hedonics, but search within the Rant for "birth death model" and you will also see that I've written on this piece of chicanery before, too.

Ans so it goes - as the US declines (and eventually splits into three separate states), the propaganda bath must necessarily deepen. It was that way in the Soviet Union (none of the Five Year Plans ever failed, if the Soviet statistician was to be believed), and the US has always been far more militaristic than the Soviets ever were. And it is axiomatic; the larger the share of output expended trying to capture resources by military means, the faster the rate of decline: politicians don't read much (if at all) so they always fail to grasp the fact that resource acquisition by military means is the most ineffficient mechanism possible - but most of the time they don't care either way - wars are simply a mechanism for transferring tax revenue to chosen patrons, and of increasing the extent of State interference in people's lives.

Federal Reserve Open Market Operations

The Fed's Open Market Operations desk performed 1 repurchase operation - a $7.5billion, overnight repurchase entirely in T-backed collateral. In line with generalised Rant principles, we ought to have expected a significant, tradeable bounce to have commenced at 10 a.m., but the bounce was delayed ten minutes by the reaction to the Wholesale Trade report, which showed risingg inventories, sluggish sales growth, and year on year increases on the inventory-sales ratio. You see, phantom workers don't buy anything with their phantom wages - they can get by on phantom products.

Perhaps that's why GDP has to be hedonically adjusted with phantom goods & services - so  that the net birth death model fictional workers have something to consume... even Miss Dolly and Teddy have to have their cups of tea.

Anyhow, the naff numbers caused a little reaction downwards in the equities indices between 10 a.m. and 10:10 a.m. NY time, after which the repo money got deployed for a nice, 50-Dow-point bounce.

Major US Indices

Yet another "save" was required in the last hour or so.  Oil prices went above $52, and equities were pretty weak (at 3 p.m. NY time the Dow was 10 points below the gain line). Then, an inexplicable little rally into the close. Reagan's Executive Order at work, unless I miss my guess. It was Reagan who gave us the President's Working Group on Financial Markets, also known as the Plunge Protection Team or PPT), following the 1987 debacle (the guy was such a shit actor he couldn't even play a capitalist properly).

PPT or no, something got in the way of a re-test of the lows, and the Dow rallied 40-odd points in the last hour. Do not buy the journo-babble that it was E*Trade's bid for Ameritrade, nor Duke's bid for Cinergy. (Why journalists get gooey in the groinal region over mergers is beyond me... it's just paperwork,  is almost always to the detriment of the acquiring company, and is largely so that CEOs can big-note themselves at pissups).

By the close, the Dow Jones Industrial Average showed a gain of 38.94 points (0.38%), closing out the day at 10384.34 points. The index hit an intraday high of 10384.86 seconds before the close, and fell as low as 10320.14 during the session (the session low was at 10:10 a.m.).

Within the blue-chip index, 21 stocks rose, the biggest gainers being Mcdonalds (MCD, +2.52% to $30.12) and General Motors (GM, +1.85% to $31.33), which accounted for 10 Dow points between them. Losers in the Dow numbered 9 and were led by Hewlett Packard (HPQ, -1.14% to $20.74) and Boeing (BA, -0.74% to $60.56), with these two stocks contributing -5 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the gainers by 194.3m shares to 100.4m.

The broader S&P500 advanced 7.49 points (0.64%), ending the day at 1178.84. Within the index, gainers numbered 379, while 115 S&P500 stocks fell for the day. Volume was tilted 2.8:1 in favour of the winners with 1226.29 million units traded in the winners as compared with 433.59 million traded in the losers .

Over at Times Square, the Nasdaq Composite rose 12.32 points (0.63%), to close at 1979.67, while larger-cap technology issues fared worse with the Nasdaq100 adding 7.38 points (0.51%), to end at 1463.38 points. Within the tech benchmark, gainers numbered 66, while 33 Nasdaq100 stocks fell for the day. Volume was tilted 1.2:1 in favour of the winners with 336.89 million traded in the winners compared to 286.59 million in the losers .

NYSE Volume was  pretty chunky, with 1.83 billion shares changing hands, while Nasdaq Volume was about average, with 1.45 billion shares traded.

Major Market Statistics
Index Close Gain(Loss) %
Dow Jones Industrial Average 10384.34 38.94 0.38%
S&P500 1178.84 7.49 0.64%
Nasdaq Composite 1979.67 12.32 0.63%
Nasdaq100 1463.38 7.38 0.51%
NYSE Volume 1.83bn - -
Nasdaq Volume 1.45bn - -


My 9-stock "bellwethers" group rose by an average of 0.69%

  • General Electric (GE) +$0.38 (1.06%) to $36.23;
  • Citigroup (C) +$0.26 (0.56%) to $46.85;
  • Wal Mart (WMT) +$0.29 (0.59%) to $49.25;
  • I.B.M. (IBM) -$0.28 (0.37%) to $74.98;
  • Intel (INTC) +$0.31 (1.27%) to $24.80;
  • Cisco Systems (CSCO) +$0.19 (1.05%) to $18.21;
  • eBay (EBAY) -$0.23 (0.68%) to $33.56;
  • Fannie Mae (FNM) +$0.62 (1.13%) to $55.65; and
  • Freddie Mac (FRE) +$0.99 (1.59%) to $63.08.

Market Breadth & Internals

NYSE advancing Issues exceeded decliners by 2244 to 1048 for a single-day A/D reading of 1196; Nasdaq gainers trumped losers by 1935 to 1127. The 10-day moving average of the A/D line rose to 500.9 on the NYSE, while the 10dma of the Nasdaq A/D rose to 173.0.

NYSE advancing volume exceeded volume in decliners by 1399.2 to 385.1 million shares; Nasdaq advancing volume was greater than volume in decliners by 907.7 to 503 million shares.

102 NYSE-listed stocks rose to new 52-week highs, and 29 posted fresh 52-week lows, while on the Nasdaq there were 52 stocks that hit new 52-week highs, and 75 which fell to fresh 52-week lows.

Market Breadth Statistics

NYSE Nasdaq
Advancers 2244 1935
Decliners 1048 1127
Advancing Volume (m) 1399.21 907.68
Declining Volume (m) 385.06 502.99
New Highs 102 52
New Lows 29 75

Market Sentiment Statistics
Index Close Gain(Loss) %
CBOE Volatility Index 13.57 -0.48 -3.42%
CBOE Nasdaq Volatility Index 18.29 0.71 4.04%
Equity Put-Call Ratio 0.76 0 0%
10-day PCR 0.76 0 0.01%
SPX-VIX Ratio 86.9 3.5 4.2%

Bond Market Analysis

The yield on the benchmark 30-year Treasury bond shedding 2.0 bps to 4.614%. That's got more to do with "seasoning" that with anything else, since the 30-year bond future only rose a single tick (tp 114 & 1/32 - meaning that the short advocated last week, finished the week with a profit of $1000 per $1788 contract... not bad).

The middle of the yield curve was broadly lower - but again not by much: five year yields rose to 3.983%, and ten-year yields rose to 4.278%.

Spreads between short-dated (2-yr) Treasuries and high-grade corporate bonds of similar maturity profiles were 2.0 bps tighter at 9.0 basis points; spreads between longer dated Treasuries and their corporate AAA counterparts fell to 52.0 bps for 10-year AAA, and 78.0 bps 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 25.0 bps wider at 51.0 basis points and the 10-year AAA-A spread 38.0 bps wider at 23.0 bps.

Treasury Yields
Index Close Gain(Loss) %
UST 13wk (yld) 2.797 0 0%
UST 2Y (yld) 3.73 0.2 5.67%
UST 5Y (yld) 3.983 0.029 0.73%
UST 10Y (yld) 4.278 0.012 0.28%
UST 30Y (yld) 4.614 -0.02 -0.43%

The Banks Index posted a rise of 0.86 points (0.88%), ending the day at 98.55; within the index,

  • Golden West Financial (GDW) +$1.61 (2.56%) to $64.55;
  • North Fork Bancorp (NFB) +$0.55 (1.98%) to $28.36;
  • Wachovia (WB) +$0.86 (1.68%) to $52.17;
  • State Street (STT) +$0.76 (1.64%) to $47.17; and
  • MBNA Corp (KRB) +$0.23 (1.16%) to $20.08.

The Broker-dealer Index advanced 4.53 points (3.23%), to end the session at 144.77; the ticket clippers lined up as follows -

  • Ameritrade (AMTD) +$2.11 (18.66%) to $13.42;
  • E*Trade (ET) +$0.69 (5.78%) to $12.62;
  • Charles Schwab (SCH) +$0.41 (3.97%) to $10.74;
  • Lehman Brothers (LEH) +$1.68 (1.86%) to $91.92; and
  • Merrill Lynch (MER) +$0.81 (1.5%) to $54.86.

The Philadelphia SOX (Semiconductor) index gained 1.72 points (0.43%), to end the session at 398.54

  • Intel (INTC) +$0.31 (1.27%) to $24.80;
  • Freescale Semiconductors (FSL-B) +$0.22 (1.16%) to $19.26;
  • Marvell Tech Group (MRVL) +$0.39 (1.15%) to $34.37;
  • Linear Technology (LLTC) +$0.40 (1.1%) to $36.77; and
  • Advanced Micro Devices (AMD) +$0.15 (1.01%) to $15.05.

Gold & Silver Markets

Gold rose $0.50 (0.12%) to close at $426.6 per ounce. There's no momentum in either direction, but sentiment is still excessively bullish - too many newcomers to the market are holding long positions, and smart money still has a decent swag of short holdings.  

The Gold Bugs Index posted a rise of 0.58 points (0.31%), at 185.24

  • Harmony Gold (HMY) +$0.21 (3.39%) to $6.40;
  • Gold Fields (GFI) +$0.25 (2.53%) to $10.13;
  • Hecla Mining (HL) +$0.09 (1.81%) to $4.89;
  • Iamgold (IAG) +$0.11 (1.75%) to $6.40; and
  • Meridian Gold (MDG) +$0.23 (1.39%) to $16.80.

Silver rose $0.09 (1.29%) to close at $7.07 per ounce. The Gold and Silver Index (XAU) gained 0.29 points (0.34%), closing at 85.96 points.

  • Harmony Gold (HMY) +$0.21 (3.39%) to $6.40;
  • Gold Fields (GFI) +$0.25 (2.53%) to $10.13;
  • Meridian Gold (MDG) +$0.23 (1.39%) to $16.80; and
  • Placer Dome (PDG) +$0.13 (0.94%) to $13.94.
Precious Metals and Indices
Index Close Gain(Loss) %
Gold 426.60 0.50 0.12%
Silver 7.07 0.09 1.29%
PHLX Gold and Silver Index 85.96 0.29 0.34%
AMEX Gold BUGS Index 185.24 0.58 0.31%

Oil Market

Oil was firmer, rising by $0.82 per barrel, closing at $52.05 per barrel.  So much for that little dip below $50, which - according to journo-babble - was supposed to be the catalyst for huge reducitons in costs for businesses and therefore good for the economy. You can't have dwindling supplies, threats to future supplies, OPEC running at full tilt, and declining oil prices. Especially not with summer driving season nearly upon us (more accurately, nearly upon those in the US who can still afford to fill their vehicles). Perhaps some hedonically-adjusted workers will fill their vehicles using funds left over from their core-CPI-based expenditure basket, and will drive to Disneyland.

The Oil and Gas Index (XOI) advanced 9.73 points (1.17%), to end the session at 839.46

  • Marathon Oil (MRO) +$0.96 (1.99%) to $49.28;
  • Unocal (UCL) +$1.00 (1.8%) to $56.45; and
  • ConocoPhillips (COP) +$1.84 (1.75%) to $106.76.

The Oil service stocks (OSX) Index advanced 2.32 points (1.74%), at 135.35

  • National Oilwells/Varco (NOV) +$1.46 (3.36%) to $44.94;
  • BJ Services (BJS) +$1.23 (2.47%) to $50.98; and
  • GlobalSantaFe (GSF) +$0.77 (2.19%) to $35.97.
Energy Complex
Index Close Gain(Loss) %
Reuters CRB 300.82 0.36 0.12%
Crude Oil Light Sweet 52.05 0.82 1.6%
Heating Oil 1.4425 0.01 0.81%
Natural Gas 6.692 0.06 0.86%
Unleaded Gas 1.4885 0.01 0.68%
AMEX Oil Index 839.46 9.73 1.17%
Oil Service Index 135.35 2.32 1.74%

Currency Markets

USD Exchange Rates
Index Close Gain(Loss) %
US Dollar Index 84.61 -0.06 -0.07%
Euro 1.2841 0.0018 0.14%
Yen 105.59 0.04 0.04%
Sterling 1.8831 0.0012 0.06%
Australian Dollar 0.7722 -0.0017 -0.22%
Swiss Franc 1.2051 -0.0017 -0.14%
Canadian Dollar 0.8074 -0.0001 -0.01%