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Fridays... is there anything more boring (unless they're options expiration Fridays of course - they get very interesting. Today had none of the volatility and sharp whipsaws of an expiration day (sadly)... the Dow traded in a numbingly narrow range (as did the other indices). it's pretty typical of the Friday before a holiday Monday.
The
economic data was soft, on the whole... Personal income
was in line with consensus at 0.7%, but personal spending
was well below expectations (0.2% versus 0.8% consensus). Consumer Sentiment
was
a little stronger than expectations (89.6 versus consensus of 89.0).
Why do I not believe government
statistics? It's partly because of my dim view of the government, but
also because I spend a bit of time trying to figure out how changes to
the methodology actually makes the numbers pointless for the terms of
intertemporal comparison.
For example, were you aware that the US CPI-based inflation rate would be 2.7% higher if the CPI was calculated the way they did it before the Clinton Administration? And that's BEFORE we even think about hedonic indexing (which subtracts another 1.25% from the inflation rate and sticky-tapes it onto the 'real' side of the economy). So if we were still using Reagan and Bush I era methods (which had been stable since the 1940s), measured inflation would be over 7%.
There is a terrific
series written by a chap called John Williams
(not the lead guitarist from Sky,
and not the guy who wrote the Star Wars
theme... there is a third
brilliant John Williams). the entire series is called Shadow
Government Statistics.
Of particular interest to readers are the bits about the CPI, Labour
Survey, and GDP. Distribute them to any journalist you know, because
they are something about which we should all be made aware.
Federal Reserve Open Market Operations
The Fed's Open Market Operations desk performed 1 repurchase operation - an $8billion, 6-day repurchase entirely in T-backed collateral (the long weekend means that the 'default' repo period should have been 4 days; not sure why they would go for the extra 2 days).
Major US Indices
The Dow
Jones Industrial Average advanced
4.95 points (0.05%), closing out the day at 10542.55 points. The index
hit an intraday high of 10552.01, and fell as low as 10517.66 during
the session. That's a measly 35 point range, and for most of the
session it was even narrower. Part of the reason was that the bond
market closed early... and everyone else took off for the Hamptons well
before mid-afternoon (it's a long weekend this weekend - yet another
day spent glorifying the State's penchant for war and blood).
Within the blue-chip index, 15 stocks rose, the biggest gainers being American International Group (AIG, +1.24% to $56.40) and Exxon Mobil (XOM, +1.03% to $56.80), which accounted for 9 Dow points between them. Losers in the Dow numbered 14 and were led by Pfizer (PFE, -1.90% to $28.36) and Hewlett Packard (HPQ, -1.00% to $22.77), with these two stocks contributing -6 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the gainers by 169.1m shares to 95m.
The broader S&P500 posted a rise of 1.16 points (0.1%), to 1198.78. Within the index, gainers numbered 283, while 203 S&P500 stocks fell for the day. Volume was tilted 1.2:1 in favour of the winners with 665.28 million units traded in the winners as compared with 537.96 million traded in the losers.
Over at Times Square, the Nasdaq Composite gained 4.49 points (0.22%), to close at 2075.73, while larger-cap technology issues fared worse with the Nasdaq100 adding just a solitary point (0.06%), to end at 1549.8 points. Within the tech benchmark, gainers numbered 50, while 50 Nasdaq100 stocks fell for the day. Volume was tilted 1.3:1 in favour of the winners with 288.14 million traded in the losers compared to 214.79 million in the losers .
NYSE Volume was relatively soft, with 1.38 billion shares changing hands, while Nasdaq Volume was modest, with 1.27 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 | 10542.55 | 4.95 | 0.05% |
| S&P500 | 1198.78 | 1.16 | 0.1% |
| Nasdaq Composite | 2075.73 | 4.49 | 0.22% |
| Nasdaq100 | 1549.8 | 1 | 0.06% |
| NYSE Volume | 1.38bn | - | - |
| Nasdaq Volume | 1.27bn | - | - |
Bellwethers
My 9-stock "bellwethers" group rose by an average of 0.42%
- General Electric (GE) -$0.06 (0.16%) to $36.88;
- Citigroup (C) -$0.10 (0.21%) to $47.28;
- Wal Mart (WMT) -$0.04 (0.08%) to $47.27;
- I.B.M. (IBM) -$0.04 (0.05%) to $77.10;
- Intel (INTC) +$0.02 (0.07%) to $27.39;
- Cisco Systems (CSCO) -$0.11 (0.55%) to $19.79;
- eBay (EBAY) +$0.47 (1.24%) to $38.30;
- Fannie Mae (FNM) +$1.37 (2.31%) to $60.74; and
- Freddie Mac (FRE) +$0.81 (1.25%) to $65.80.
Market Breadth & Internals
NYSE advancing Issues exceeded decliners by 2226 to 1012 for a single-day A/D reading of 1214; that's just crazy on a day when almost nothing happened. Nasdaq gainers trumped losers by 1668 to 1341. The 10-day moving average of the A/D line rose to 529.4 on the NYSE, while the 10dma of the Nasdaq A/D rose to 226.7.
NYSE advancing volume exceeded volume in decliners by 844.4 to 503.3 million shares; Nasdaq advancing volume was greater than volume in decliners by 739.1 to 499.5 million shares.
101 NYSE-listed stocks rose to new 52-week highs, and 15 posted fresh 52-week lows, while on the Nasdaq there were 79 stocks that hit new 52-week highs, and 31 which fell to fresh 52-week lows.
| Market Breadth Statistics | ||
| NYSE | Nasdaq | |
| Advancers | 2226 | 1668 |
| Decliners | 1012 | 1341 |
| Advancing Volume (m) | 844.36 | 739.1 |
| Declining Volume (m) | 503.29 | 499.54 |
| New Highs | 101 | 79 |
| New Lows | 15 | 31 |
| Market Sentiment Statistics | |||
| Index | Close | Gain(Loss) | % |
| CBOE Volatility Index | 12.15 | -0.09 | -0.74% |
| CBOE Nasdaq Volatility Index | 15.15 | 0.15 | 1% |
| Equity Put-Call Ratio | 0.69 | 0.06 | 9.52% |
| 10-day PCR | 0.69 | 0 | 0.12% |
| SPX-VIX Ratio | 98.7 | 0.82 | 0.84% |
Bond Market Analysis
Bonds rose at the long end,
but barely, with the yield on the benchmark 30-year
Treasury bond shedding 0.1 bps
to 4.43%. The bond market closed early for the long weekend.
The middle of the yield curve was broadly higher: five year yields fell to 3.814%, and ten-year yields fell to 4.073%.
Spreads between short-dated (2-yr) Treasuries and high-grade corporate bonds of similar maturity profiles were 1.0 bps tighter at 7.0 basis points; spreads between longer dated Treasuries and their corporate AAA counterparts fell to 63.0 bps for 10-year AAA, and 90.5 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 13.0 bps
looser at 50.0 basis points and the 10-year AAA-A spread 6.0 bps
tighter at -11.0 bps. That spread is now getting to be stupid, and it's
all because of the index components.
| Treasury Yields | |||
| Index | Close | Gain(Loss) | % |
| UST 13wk (yld) | 2.887 | 0 | 0% |
| UST 2Y (yld) | 3.63 | 0.01 | 0.28% |
| UST 5Y (yld) | 3.814 | -0.005 | -0.13% |
| UST 10Y (yld) | 4.073 | -0.008 | -0.2% |
| UST 30Y (yld) | 4.43 | -0.001 | -0.02% |
The Banks Index dipped 0.14 points (0.14%), at 99.05; within the index,
- Wachovia (WB) -$0.88 (1.69%) to $51.04;
- Mellon Financial (MEL) -$0.14 (0.5%) to $27.96;
- Zions Bancorp (ZION) -$0.32 (0.45%) to $71.10;
- Comerica (CMA) -$0.25 (0.44%) to $56.38; and
- JPMorganChase (JPM) -$0.14 (0.39%) to $35.80.
The Broker-dealer Index posted a rise of 0.11 points (0.08%), to end the session at 144.13; the ticket clippers lined up as follows -
- Legg Mason (LM) +$0.80 (0.97%) to $82.92;
- Bear Stearns (BSC) +$0.57 (0.58%) to $98.17;
- Jeffries Group (JEF) +$0.17 (0.49%) to $34.82;
- Lehman Brothers (LEH) +$0.41 (0.45%) to $91.66; and
- A G Edwards (AGE) +$0.13 (0.32%) to $41.26.
The Philadelphia SOX (Semiconductor) index lost 3.17 points (0.73%), at 430.43
- Freescale Semiconductors (FSL-B) -$0.31 (1.5%) to $20.35;
- Broadcom (BRCM) -$0.52 (1.42%) to $35.99;
- Xilinx (XLNX) -$0.37 (1.3%) to $28.13;
- Altera (ALTR) -$0.29 (1.29%) to $22.26; and
- Teradyne (TER) -$0.16 (1.21%) to $13.10.
Gold & Silver Markets
Gold
rose $2.00 (0.48%) to close at $419.80 per ounce. It seemed to be based
on nothing though - after all the data was out, the gold market was
trading at about $418 for almost an hour and a half, then it rallied
for the remainder of the (Friday afternoon, remember) session. Thin
market, low volume... interesting.
The Gold Bugs Index posted a rise of a whopping 8.07 points (4.52%), closing at 186.71
- Coeur d'Alene (CDE) +$0.31 (10.84%) to $3.17;
- Golden Star (GSS) +$0.20 (7.49%) to $2.87;
- Eldorado Gold (EGO) +$0.16 (7.11%) to $2.41;
- Harmony Gold (HMY) +$0.48 (6.68%) to $7.67; and
- Glamis Gold (GLG) +$0.83 (6%) to $14.67.
Silver
rose $0.13 (1.75%) to close at $7.27 per ounce.
The Gold and Silver Index (XAU) also went on a tear, and gained 3.1 points (3.72%), at 86.46 points.
- Durban Rooderpoert Deep (DROOY) +$0.13 (12.74%) to $1.12;
- Harmony Gold (HMY) +$0.48 (6.68%) to $7.67;
- Kinross Gold (KGC) +$0.25 (4.91%) to $5.34; and
- Meridian Gold (MDG) +$0.74 (4.68%) to $16.55.
| Precious Metals and Indices | |||
| Index | Close | Gain(Loss) | % |
| Gold | 419.80 | 2.00 | 0.48% |
| Silver | 7.27 | 0.13 | 1.75% |
| PHLX Gold and Silver Index | 86.46 | 3.1 | 3.72% |
| AMEX Gold BUGS Index | 186.71 | 8.07 | 4.52% |
Oil Market
Oil was firmer, rising by $0.70 per barrel, closing at $51.85 per barrel after hitting a session high at $52 late in the day. The Oil and Gas Index (XOI) advanced 11.94 points (1.45%), ending the day at 836.07
- ConocoPhillips (COP) +$2.47 (2.35%) to $107.55;
- Amerada Hess (AHC) +$2.12 (2.29%) to $94.85; and
- Unocal (UCL) +$1.27 (2.26%) to $57.56.
The Oil service stocks (OSX) Index rose 1.45 points (1.09%), closing at 134.68
- GlobalSantaFe (GSF) +$0.98 (2.74%) to $36.73;
- Tidewater (TDW) +$0.62 (1.8%) to $35.05; and
- National Oilwells/Varco (NOV) +$0.65 (1.49%) to $44.39.
| Energy Complex | |||
| Index | Close | Gain(Loss) | % |
| Reuters CRB | 300.89 | 0.8 | 0.27% |
| Crude Oil Light Sweet | 51.85 | 0.7 | 1.37% |
| Heating Oil | 1.4458 | 0 | 0.02% |
| Natural Gas | 6.37 | 0.25 | 4.03% |
| Unleaded Gas | 1.4753 | 0.03 | 1.88% |
| AMEX Oil Index | 836.07 | 11.94 | 1.45% |
| Oil Service Index | 134.68 | 1.45 | 1.09% |
Currency Markets
| USD Exchange Rates | |||
| Index | Close | Gain(Loss) | % |
| US Dollar Index | 86.42 | -0.43 | -0.5% |
| Euro | 1.2568 | 0.0057 | 0.46% |
| Yen | 107.89 | -0.05 | -0.05% |
| Sterling | 1.8238 | 0.004 | 0.22% |
| Australian Dollar | 0.7628 | 0.0046 | 0.61% |
| Swiss Franc | 1.23 | -0.0059 | -0.48% |
| Canadian Dollar | 0.7972 | 0.008 | 1.01% |
