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The
Yiddish word for it is chutzpah.
Those of a Tex-Mex persuasion (particularly closet bisexuals with a
penchant for killing foreigners' children) use cojones;
others use huevos
(eggs). Cojones/heuvos is not le mot juste
though, because although it invokes laughing in the face of danger and
spitting in the Devil's eye, it doesn't have the sense of
self-arrogance that is conveyed by chutzpah.
It's always best understood by example rather than definition: for
example Alan Dershowitz has chutzpah
- for pretending to have a soul while simultaneously advocating
torture.
And Greenspan has it out the wahzoo. The US's prime Central Planner, head of the most interventionist monetary instrument in the West, had the chutzpah to upbraid the Chinese during his speech last night. Seriously, the NeoTrots will not be happy until the Chinese lob a tactical nuke onto a US carrier battle group (that's how a US war with China will resolve... it's the most sensible thing the Chinese could do, and replicates the Soviet plan for dealing with US naval power).
This frothy old crabber - a man who abandoned his 'free market principles' the moment an opportunity to suckle at the public teat presented itself - is an administration lickspittle, and always has been. He 'carries water' for whomever is in power, because he's a follower; like a wind up toy he parrots whatever line of nonsense the Administration tells him to. Cut taxes? Sure... Greenspan will tell the legislature that otherwise markets will find it hard to deal with future surpluses. Privatise Social Security? Sure... Greenspan will tell them that it's a good idea. Want a trade war with China? Trot out Greenspan and he'll say whatever they want.
I wonder if the Romans did the same sort of thing: were there speeches in the Forum upbraiding Arminius for exploiting bad Roman tactics when he crushed Varus' legions? That's effectively what's happening here: the Yanks are vying for geopolitical hegemony, and they know they can't pull it off, because their external imbalances are too large. The Chinese have quietly amassed staggering holdings of USD denominated assets - a large enough stockpile to cripple the US economically. And when the US administration finally woken up to the stratagem, the response of the US is simply to whine.
Starting a Trade War with the Chinese now is so reminiscent of the Smoot-Hawley Tarrif that it makes my brain bleed.
Federal Reserve Open Market Operations
The Fed's Open
Market Operations desk performed
1 repurchase operation - a $4billion, overnight repurchase entirely in
T-backed collateral. Now we all know that $4 billion isn't enough to
generate a 10 a.m. tradable bounce - and the result was that 10 a.m. was
just another tick of the clock. Oh well - considering the amount pumped
into the temporary market during the other 4 days of the week, perhaps
it was time for a rest.
Major US Indices
The Dow
Jones Industrial Average shed
21.28 points (0.2%), closing out the day at 10471.91 points. The index
hit an intraday high of 10499.26 in the opening minutes, and fell to
its session low at 10423.88 almost exactly 2 hours later. Then it was
time for the usual ego-handjob that the markets give to Greenspan every
time he has a public speech; from 11:30 to 12:20 (when the speech
started) was the strongest-momentum upmove of the session. Since
Greenspan once again told everyone what they wanted to hear (the trade
balance is the fault of the Chinese
furriners,
not of good ol' 'Merrkins),
and of course that energy prices will subside thanks to builds in
inventories. I wonder if he was carrying pom-poms and wearing a
letter-sweater?
The market kept climbing as he
kept waffling, and continued until about 2:30 p.m. NY time - without
managing to exceed the opening high. There's something brewing
technically.
Within the blue-chip index, 9 stocks rose, the biggest gainers being American International Group (AIG, +1.43% to $53.76) and Intel (INTC, +1.31% to $26.35), which accounted for 8 Dow points between them. Losers in the Dow numbered 20 and were led by Exxon Mobil (XOM, -1.50% to $54.01) and Du Pont (DD, -1.34% to $46.97), with these two stocks contributing -11 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the losers by 224.7m shares to 109.8m.
The broader S&P500 dipped 1.8 points (0.15%), to end the session at 1189.28. Within the index, gainers numbered 207, while 276 S&P500 stocks fell for the day. Volume was tilted 1.1:1 in favour of the winners with 796.34 million units traded in the losers as compared with 733.56 million traded in the winners .
Over at Times Square, the Nasdaq Composite gained 3.84 points (0.19%), to close at 2046.42, while larger-cap technology issues fared better with the Nasdaq100 adding 6.63 points (0.44%), to end at 1528.06 points. Within the tech benchmark, gainers numbered 58, while 39 Nasdaq100 stocks fell for the day. Volume was tilted 2.3:1 in favour of the winners with 442.75 million traded in the winners compared to 191.56 million in the losers .
NYSE Volume was chunky, with 1.63 billion shares changing hands, while Nasdaq Volume was about average, with 1.54 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 | 10471.91 | -21.28 | -0.2% |
| S&P500 | 1189.28 | -1.8 | -0.15% |
| Nasdaq Composite | 2046.42 | 3.84 | 0.19% |
| Nasdaq100 | 1528.06 | 6.63 | 0.44% |
| NYSE Volume | 1.63bn | - | - |
| Nasdaq Volume | 1.54bn | - | - |
Bellwethers
My 9-stock "bellwethers" group rose by an average of 0.09%
- General Electric (GE) +$0.08 (0.22%) to $37.00;
- Citigroup (C) -$0.04 (0.08%) to $47.80;
- Wal Mart (WMT) -$0.33 (0.69%) to $47.18;
- I.B.M. (IBM) -$0.75 (0.97%) to $76.41;
- Intel (INTC) +$0.34 (1.31%) to $26.35;
- Cisco Systems (CSCO) +$0.09 (0.46%) to $19.47;
- eBay (EBAY) +$0.40 (1.11%) to $36.56;
- Fannie Mae (FNM) +$0.18 (0.32%) to $56.72; and
- Freddie Mac (FRE) -$0.57 (0.88%) to $64.28.
Market Breadth & Internals
NYSE declining Issues beat out advancers by 1772 to 1467, for a single-day A/D reading of -305; and Nasdaq losers exceeded gainers by 1546 to 1461. The 10-day moving average of the A/D line fell to 506.0 on the NYSE, while the 10dma of the Nasdaq A/D fell to 254.1.
On the NYSE declining volume was greater than volume in advancing issues by 921.2 to 671 million shares; Nasdaq advancing volume was greater than volume in decliners by 935.2 to 532.5 million shares.
63 NYSE-listed stocks rose to new 52-week highs, and 22 posted fresh 52-week lows, while on the Nasdaq there were 57 stocks that hit new 52-week highs, and 43 which fell to fresh 52-week lows.
| Market Breadth Statistics | ||
| NYSE | Nasdaq | |
| Advancers | 1467 | 1461 |
| Decliners | 1772 | 1546 |
| Advancing Volume (m) | 670.97 | 935.15 |
| Declining Volume (m) | 921.23 | 532.51 |
| New Highs | 63 | 57 |
| New Lows | 22 | 43 |
| Market Sentiment Statistics | |||
| Index | Close | Gain(Loss) | % |
| CBOE Volatility Index | 13.14 | -0.18 | -1.35% |
| CBOE Nasdaq Volatility Index | 15.88 | -1.07 | -6.31% |
| Equity Put-Call Ratio | 0.67 | 0.03 | 4.69% |
| 10-day PCR | 0.69 | 0 | -0.6% |
| SPX-VIX Ratio | 90.5 | 1.09 | 1.22% |
Bond Market Analysis
Bonds rose very modestly at the
long end, with the yield on the benchmark 30-year
Treasury bond shedding 0.5 bps
to 4.438%. that's largely the result of t he blend of 'on the run' and
'off the run' treasuries used to compile the index: the T-bond futures
were actually unchanged.
The middle of the yield curve was broadly lower: five year yields rose to 3.871%, and ten-year yields rose to 4.125%.
Spreads between short-dated (2-yr) Treasuries and high-grade corporate bonds of similar maturity profiles were 2.0 bps tighter at 8.0 basis points; spreads between longer dated Treasuries and their corporate AAA counterparts fell to 52.0 bps for 10-year AAA, and 89.5 bps for 20-years.
Credit
spreads (spreads between
corporate bonds of the same maturity profile but different
creditworthiness) were mixed with the AAA-A spread on 20-years 3.0 bps
tighter at 49.0 basis points and the 10-year AAA-A spread 2.0 bps wider
at 5.0 bps. High-yield debt has been getting absolutely murdered of
late - I am trying to get a hold of some decent data on the high-yield
market, in a format that enables automatic inclusion into the RantBuilder.
| Treasury Yields | |||
| Index | Close | Gain(Loss) | % |
| UST 13wk (yld) | 2.825 | 0 | 0% |
| UST 2Y (yld) | 3.65 | 0.03 | 0.83% |
| UST 5Y (yld) | 3.871 | 0.034 | 0.89% |
| UST 10Y (yld) | 4.125 | 0.017 | 0.41% |
| UST 30Y (yld) | 4.438 | -0.005 | -0.11% |
The Banks Index shed 0.4 points (0.4%), to end the session at 99.63; within the index,
- Northern Trust (NTRS) -$0.68 (1.45%) to $46.20;
- Mellon Financial (MEL) -$0.41 (1.44%) to $27.98;
- Fifth Third Bancorp (FITB) -$0.57 (1.3%) to $43.34;
- Wachovia (WB) -$0.65 (1.22%) to $52.42; and
- Regions Financial (RF) -$0.40 (1.17%) to $33.89.
The Broker-dealer Index declined 0.2 points (0.14%), at 146.32; the ticket clippers lined up as follows -
- Jeffries Group (JEF) -$0.63 (1.72%) to $35.91;
- E*Trade (ET) -$0.21 (1.68%) to $12.27;
- Raymond James (RJF) -$0.16 (0.58%) to $27.47;
- Charles Schwab (SCH) -$0.04 (0.35%) to $11.54; and
- Morgan Stanley (MWD) -$0.15 (0.3%) to $50.00.
The Philadelphia SOX (Semiconductor) index added 5.14 points (1.22%), to 425.23
- Marvell Tech Group (MRVL) +$1.46 (3.79%) to $39.98;
- Xilinx (XLNX) +$0.65 (2.35%) to $28.36;
- KLA-Tencor (KLAC) +$0.74 (1.72%) to $43.64;
- National Semiconductors (NSM) +$0.32 (1.63%) to $19.97; and
- Broadcom (BRCM) +$0.51 (1.43%) to $36.13.
Gold & Silver Markets
Gold
fell by $3.10 (0.74%) to close at $417.7 per ounce. The market keyed
again on the currencies, since there was no other economic news, and
with Greenspan waffling interminably about how everything is just
Jim-Dandy (when has he ever mentioned the war and its effects on the
national finances? Never, that's when. The biggest single issue for the
public-finance segment of the US economy at present, and he has avoided
it like his life depends on it).
Gold Bugs Index lost 0.97 points (0.56%), to end the session at 171.76
- Coeur d'Alene (CDE) -$0.09 (3.17%) to $2.75;
- Gold Fields (GFI) -$0.18 (1.81%) to $9.75;
- Randgold Resources (GOLD) -$0.19 (1.65%) to $11.30;
- Freeport McMoran (FCX) -$0.56 (1.63%) to $33.76; and
- Newmont Mining (NEM) -$0.56 (1.56%) to $35.43.
Silver fell by $0.18 (2.45%) to close at $6.96 per ounce. The Gold and Silver Index (XAU) lost 0.97 points (1.19%), closing at 80.73 points.
- Barrick Gold (ABX) -$0.40 (1.82%) to $21.62;
- Gold Fields (GFI) -$0.18 (1.81%) to $9.75;
- Freeport McMoran (FCX) -$0.56 (1.63%) to $33.76; and
- Newmont Mining (NEM) -$0.56 (1.56%) to $35.43.
| Precious Metals and Indices | |||
| Index | Close | Gain(Loss) | % |
| Gold | 417.70 | -3.10 | -0.74% |
| Silver | 6.96 | -0.18 | -2.45% |
| PHLX Gold and Silver Index | 80.73 | -0.97 | -1.19% |
| AMEX Gold BUGS Index | 171.76 | -0.97 | -0.56% |
Oil Market
Oil
lost ground, shedding $0.14 per barrel, closing at $46.80 per barrel
(it got as low as $46.20).
The Oil and Gas Index (XOI) slid 3.72 points (0.46%), to 796.84
- Exxon Mobil (XOM) -$0.82 (1.5%) to $54.01;
- Amerada Hess (AHC) -$1.25 (1.37%) to $90.06; and
- Repsol YPF (REP) -$0.29 (1.15%) to $25.01.
The Oil service stocks (OSX) Index shed 0.53 points (0.41%), at 128.04
- Schlumberger (SLB) -$1.03 (1.54%) to $65.97;
- Rowan Companies (RDC) -$0.37 (1.41%) to $25.93; and
- Weatherford International (WFT) -$0.66 (1.31%) to $49.65.
| Energy Complex | |||
| Index | Close | Gain(Loss) | % |
| Reuters CRB | 293.28 | -0.26 | -0.09% |
| Crude Oil Light Sweet | 46.8 | -0.14 | -0.3% |
| Heating Oil | 1.3673 | -0.02 | -1.63% |
| Natural Gas | 6.343 | -0.04 | -0.58% |
| Unleaded Gas | 1.4191 | -0.02 | -1.28% |
| AMEX Oil Index | 796.84 | -3.72 | -0.46% |
| Oil Service Index | 128.04 | -0.53 | -0.41% |
Currency Markets
| USD Exchange Rates | |||
| Index | Close | Gain(Loss) | % |
| US Dollar Index | 86.6 | 0.47 | 0.55% |
| Euro | 1.2553 | -0.0083 | -0.66% |
| Yen | 108.15 | 0.53 | 0.49% |
| Sterling | 1.8265 | -0.0082 | -0.45% |
| Australian Dollar | 0.7541 | -0.0035 | -0.46% |
| Swiss Franc | 1.2343 | 0.012 | 0.98% |
| Canadian Dollar | 0.79 | -0.004 | -0.5% |
