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There's some good news, and some bad news. The good news is the simmering rift within the Republican party, where the 'old school' republican conservatives are finally standing up to Frist, deLay and the rest of the Yanqui-Taliban whackballs. The Senate deal on three batshit-insane judges - which prevented the 'nookular option' of rescinding the time-honoured filibuster - is a direct kick in the groinal area for the Yanqui-Taliban. the same is true on the passage of Stem Cell research bill by the House.
The bad news? Greensplatt continues to draw breath, the Fed continues to pump-prime the markets, Bush hasn't had a brain embolism, and nobody has quietly assassinated Richard Perle and Paul Wolfowitz. Still, you can't have everything... it's genuinely satisfying seeing the political process - with all its corruption and despicable subhuman scum - kicking the fundamentalist whackballs "skwayah in the nerts". The Terry Schiavo incident was, it seems, the point at which the population woke up (at least in part) and said "What the...? A special law for one woman? Nuh-UH!".
What does this have to do with
the markets? Not a damn thing on a day to day basis. On a longer term
basis, the re-emergence of vertebrae within the 'Old Right' may - just may
- presage a concomitant re-emergence of Jeffersonian doctrines of
non-intervention and pacific neutrality that have been dead letters
since the invasion of the Philippines.
At the very least, it may herald a rejection of both the Monroe doctrine
and the Bush
whackball "you're with us or agin us" baloney
(which ipso facto defies the historical law of principled neutrality,
which permitted neutrals to trade with both sides of a conflict and
forbade combatants from targeting a neutral's shipping).
What's that, I hear you
say? Rose coloured glasses? Yes, I know - expecting
any sort of principled outcome from that den of vipers and thieves is
like expecting the Amanda Vanstone
to fit into a size 8 dinner gown.
Federal Reserve Open Market Operations
The Fed's Open
Market Operations desk performed
1 repurchase operation - a $10billion, overnight repurchase entirely in
T-backed collateral. Now that's a big lick of repo grease, and yet sod all
happened at 10 a.m.; in fact from being down about 25 points at 10
a.m., the Dow actually fell
a further 35 points in the period between 10 a.m. and 11 a.m.
- despite relatively neutral economic data (Mortgage applications
up 4.3% for the week; New Home Sales
weaker than expected, but only just; Durable Goods orders
OK with non-defence
capex ex-aircraft up 1.6%).
The reason - at least in part -
was the fact that the oil market was strong even in advance of the Crude Inventories data.
(I surmised some days ago that there may have been information
leakage). That data showed a drawdown of 1.6 million barrels in Crude
Inventories: it was released at 10:30 a.m. and Crude immediately
started heading upwards. Interestingly - and here's where the repo
numbers worked their magic - the stock market didn't decline nay
further than it's pre-data
level until after 1 p.m. - by which time Oil had broken $51 a barrel.
Then, someone with loads of dough, put their foot on Oil's neck
(gently) and all of a sudden a raft of buy programs were triggered in
major stocks.
Major US Indices
After being down almost 80 points at one stage, the Dow Jones Industrial Average slid 45.88 points (0.44%), closing out the day at 10457.8 points. The index hit an intraday high of 10503.17 (the opening artifact strikes again - all other indices gapped down), and fell as low as 10426.39 just before 1:30 p.m.... a 'breakout to new session lows' that was designed to sucker in some shorts, then burn 'em - as I mentioned to RedMenace three hours before the open.
Within the blue-chip index, 8 stocks rose, the biggest gainers being Exxon Mobil (XOM, +1.16% to $55.68) and Verizon Communications (VZ, +0.57% to $35.40), which accounted for 6 Dow points between them. Losers in the Dow numbered 22 and were led by Honeywell (HON, -1.72% to $36.63) and Caterpillar (CAT, -1.45% to $92.47), with these two stocks contributing -15 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the losers by 147.4m shares to 134.3m.
The broader S&P500 shed 4.06 points (0.34%), to end the session at 1190.01. Within the index, gainers numbered 123, while 369 S&P500 stocks fell for the day. Volume was tilted 1.8:1 in favour of the losers with 991.26 million units traded in the losers as compared with 547.18 million traded in the winners .
Over at Times Square, the Nasdaq Composite lost 11.5 points (0.56%), to close at 2050.12, while larger-cap technology issues fared better with the Nasdaq100 losing 7.76 points (0.5%), to end at 1532.71 points. Within the tech benchmark, gainers numbered 21, while 77 Nasdaq100 stocks fell for the day. Volume was tilted 2.4:1 in favour of the losers with 419.66 million traded in the losers compared to 172.80 million in the winners .
NYSE Volume was solid, with 1.74 billion shares changing hands, while Nasdaq Volume was about average, with 1.49 billion shares traded.
| Major Market Statistics | |||
| Index | Close | Gain(Loss) | % |
| Dow Jones Industrial Average | 10457.8 | -45.88 | -0.44% |
| S&P500 | 1190.01 | -4.06 | -0.34% |
| Nasdaq Composite | 2050.12 | -11.5 | -0.56% |
| Nasdaq100 | 1532.71 | -7.76 | -0.5% |
| NYSE Volume | 1.74bn | - | - |
| Nasdaq Volume | 1.49bn | - | - |
Bellwethers
My 9-stock "bellwethers" group fell by an average of 0.49%
- General Electric (GE) -$0.21 (0.57%) to $36.86;
- Citigroup (C) -$0.26 (0.54%) to $47.45;
- Wal Mart (WMT) -$0.35 (0.73%) to $47.30;
- I.B.M. (IBM) +$0.19 (0.25%) to $76.00;
- Intel (INTC) +$0.04 (0.15%) to $27.00;
- Cisco Systems (CSCO) -$0.38 (1.9%) to $19.62;
- eBay (EBAY) +$0.68 (1.84%) to $37.57;
- Fannie Mae (FNM) -$0.97 (1.67%) to $57.03; and
- Freddie Mac (FRE) -$0.77 (1.2%) to $63.52.
Market Breadth & Internals
NYSE declining Issues beat out advancers by 2212 to 1066, for a single-day A/D reading of -1146; and Nasdaq losers exceeded gainers by 1990 to 1049. The 10-day moving average of the A/D line fell to 174.5 on the NYSE, while the 10dma of the Nasdaq A/D fell to -22.6.
On the NYSE declining volume was greater than volume in advancing issues by 1056.3 to 625 million shares; On the Nasdaq declining volume exceeded volume in advancing issues by 919 to 515.7 million shares.
54 NYSE-listed stocks rose to new 52-week highs, and 35 posted fresh 52-week lows, while on the Nasdaq there were 58 stocks that hit new 52-week highs, and 62 which fell to fresh 52-week lows.
| Market Breadth Statistics | ||
| NYSE | Nasdaq | |
| Advancers | 1066 | 1049 |
| Decliners | 2212 | 1990 |
| Advancing Volume (m) | 624.95 | 515.68 |
| Declining Volume (m) | 1056.3 | 919.01 |
| New Highs | 54 | 58 |
| New Lows | 35 | 62 |
| Market Sentiment Statistics | |||
| Index | Close | Gain(Loss) | % |
| CBOE Volatility Index | 12.65 | -0.04 | -0.32% |
| CBOE Nasdaq Volatility Index | 15.7 | -0.14 | -0.88% |
| Equity Put-Call Ratio | 0.73 | 0.01 | 1.39% |
| 10-day PCR | 0.70 | 0.01 | 1.09% |
| SPX-VIX Ratio | 94.1 | -0.02 | -0.02% |
Bond Market Analysis
Bonds fell at the long end,
with the yield on the benchmark 30-year
Treasury bond rising 4.7 bps to
4.413%. From high (117 &9/32) to low (116&6/32) the
bond lost over a point; clearly, the bond market's view of the economic
data was pretty much in line with mine - housing strong, capex OK
(good), oil a worry.
The middle of the yield curve was broadly lower: five year yields rose to 3.802%, and ten-year yields rose to 4.072%.
Spreads
between short-dated (2-yr) Treasuries and high-grade corporate bonds of
similar maturity profiles were 1.0 bps tighter at 9.0 basis points;
spreads between longer dated Treasuries and their corporate AAA
counterparts rose to 54.0 bps for 10-year AAA, and 91.0 bps for
20-years. Finally we're getting some decent risk-compensation for
holding long-term corporate paper - but it's still not enough - that
spread should be over 150 bps.
Credit
spreads (spreads between
corporate bonds of the same maturity profile but different
creditworthiness) were mixed with the AAA-A spread on 20-years 11.0 bps
looser at 48.0 basis points and the 10-year AAA-A spread 7.0 bps
tighter at 2.0 bps. That 10-year A-AA spread is flopping around like a
landed bass; it's a function of there being relatively few bond issues
in the 10-year A index.
| Treasury Yields | |||
| Index | Close | Gain(Loss) | % |
| UST 13wk (yld) | 2.87 | 0 | 0% |
| UST 2Y (yld) | 3.58 | 0 | 0% |
| UST 5Y (yld) | 3.802 | 0.02 | 0.53% |
| UST 10Y (yld) | 4.072 | 0.035 | 0.87% |
| UST 30Y (yld) | 4.413 | 0.047 | 1.08% |
The Banks Index lost 0.39 points (0.39%), closing at 98.79; within the index,
- Washington Mutual (WM) -$0.45 (1.07%) to $41.54;
- Zions Bancorp (ZION) -$0.68 (0.95%) to $70.66;
- Golden West Financial (GDW) -$0.51 (0.83%) to $61.29;
- PNC Financial Services (PNC) -$0.42 (0.76%) to $54.89; and
- Mellon Financial (MEL) -$0.21 (0.75%) to $27.94.
The Broker-dealer Index lost 1.84 points (1.27%), ending the day at 143.33; the ticket clippers lined up as follows -
- Jeffries Group (JEF) -$1.10 (3.06%) to $34.79;
- Goldman Sachs (GS) -$2.33 (2.34%) to $97.25;
- Legg Mason (LM) -$1.65 (1.98%) to $81.67;
- Charles Schwab (SCH) -$0.22 (1.92%) to $11.21; and
- A G Edwards (AGE) -$0.65 (1.56%) to $41.10.
The Philadelphia SOX (Semiconductor) index dipped 4.74 points (1.1%), ending the day at 425.69
- Teradyne (TER) -$0.33 (2.5%) to $12.85;
- Marvell Tech Group (MRVL) -$0.89 (2.15%) to $40.59;
- Infineon Tech (IFX) -$0.19 (2.1%) to $8.86;
- Broadcom (BRCM) -$0.58 (1.59%) to $35.91; and
- Xilinx (XLNX) -$0.43 (1.51%) to $28.00.
Gold & Silver Markets
Gold
rose $1.30 (0.31%) to close at $419.50 per ounce. It... just...won't
... let... go.
Not that I'm a long-term Gold bear - regular readers will recall that I
expect Gold and the Dow to cross paths (probably in a 5-year timeframe)
- but Gold actually needs
to wash off some nuffies in the short term.
The Gold Bugs Index dipped 0.47 points (0.26%), to end the session at 180.88
- Golden Star (GSS) -$0.10 (3.52%) to $2.74;
- Kinross Gold (KGC) -$0.16 (2.96%) to $5.25;
- Glamis Gold (GLG) -$0.33 (2.28%) to $14.16;
- Harmony Gold (HMY) -$0.15 (2.02%) to $7.29; and
- Hecla Mining (HL) -$0.07 (1.61%) to $4.28.
Silver rose a sharp $0.19 (2.64%) to close at $7.21 per ounce. Spicy! Odd, since there were three major stories of interest for the session: global mine output rose 4% (better than expected); and aggregate silver demand in production was lower in 2004 than in 2003 (in fact, industrial demand for silver was at its lowest since 1998).
I guess folks were concentrating on the gap between output (634.4 million oz) & industrial-demand (836.7 million oz); that helps explain last year's price rises, you morons... look at the trend: production up, industrial demand down.. shortfall closing. (That's not a forecast - it's just what happened over the last two years; I think Silver is more undervalued than Gold - but it, too, needs to clean out some nuffies).
Oh - and the journo-babble
explanation? Fund buying.
That's all they could come up with.
The Gold and Silver Index (XAU) gained 0.25 points (0.3%), at 84.23 points.
- Anglogold Ashanti (AU) +$0.78 (2.43%) to $32.83;
- Meridian Gold (MDG) +$0.26 (1.63%) to $16.21;
- Durban Rooderpoert Deep (DROOY) +$0.01 (1.04%) to $0.97; and
- Agnico Eagle (AEM) +$0.11 (0.95%) to $11.65.
| Precious Metals and Indices | |||
| Index | Close | Gain(Loss) | % |
| Gold | 419.50 | 1.30 | 0.31% |
| Silver | 7.21 | 0.19 | 2.64% |
| PHLX Gold and Silver Index | 84.23 | 0.25 | 0.3% |
| AMEX Gold BUGS Index | 180.88 | -0.47 | -0.26% |
Oil Market
Oil was firmer, rising by $1.07 per barrel, closing at $50.89 per barrel - and spending a decent chunk of the session above $51. The inventories drawdown was the main 'culprit', but in sooth that number is almost irrelevant, except to the newcomers who get their energy trading advice from CNBC. The longer-term oil picture is none-too-sanguine - when your government goes around fomenting political disquiet in places laden with Crude, you can expect the blowback to take the form of higher prices. End of story.
Well, not quite
'End' of story... if instead of fomenting political disquiet, you pay
your economically underprivileged to go there and shoot and bomb a
bunch of civilians, eventually the oil-producers decide to kick you
back.
The Oil and Gas Index (XOI) gained 7.75 points (0.95%), ending the day at 820.88
- Occidental Petroleum (OXY) +$1.36 (1.94%) to $71.49;
- Repsol YPF (REP) +$0.39 (1.55%) to $25.54; and
- Amerada Hess (AHC) +$1.33 (1.45%) to $93.13.
The Oil service stocks (OSX) Index advanced 2.23 points (1.71%), to 132.47
- Noble Corp (NE) +$1.46 (2.73%) to $54.92;
- BJ Services (BJS) +$1.19 (2.45%) to $49.77; and
- Smith International (SII) +$1.20 (2.08%) to $58.88.
| Energy Complex | |||
| Index | Close | Gain(Loss) | % |
| Reuters CRB | 299.24 | 2.52 | 0.85% |
| Crude Oil Light Sweet | 50.89 | 1.07 | 2.15% |
| Heating Oil | 1.424 | 0.04 | 2.63% |
| Natural Gas | 6.305 | -0.02 | -0.38% |
| Unleaded Gas | 1.451 | 0.03 | 1.9% |
| AMEX Oil Index | 820.88 | 7.75 | 0.95% |
| Oil Service Index | 132.47 | 2.23 | 1.71% |
Currency Markets
| USD Exchange Rates | |||
| Index | Close | Gain(Loss) | % |
| US Dollar Index | 86.31 | -0.07 | -0.08% |
| Euro | 1.2601 | 0.0018 | 0.14% |
| Yen | 107.69 | 0.07 | 0.07% |
| Sterling | 1.8312 | 0.004 | 0.22% |
| Australian Dollar | 0.7621 | -0.0007 | -0.09% |
| Swiss Franc | 1.2263 | -0.0021 | -0.17% |
| Canadian Dollar | 0.7911 | -0.0027 | -0.34% |
