Interdum stultus opportuna loquitur...

Thursday, August 18, 2005

USRant: Narrow Range, Mixed Results...

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

The pre-market data was about in line with expectations. The only stat was New Jobless Claims, which were also in line with expectations (at 316k).

I've groused before about the Leading Indicators Index - which "leads" absolutely nothing, and shows that Goebells was right about branding/propaganda. Anyhow, it was released a half-hour after the market opened. Folks expect it to lead nothing to the tune of 0.1%, and it did that.

What does it mean if a meaningless statistic is in line with expectations? (More to the point, what if it had not been in line with consensus?). Just askin'...

So Menezes wasn't running - he was sitting. So he didn't have a bulky jacket on. So he moved through the train station completely normally, using a swipe card, pausing to pick up a newspaper. And the people that killed him were paramilitaries, not coppers. It may turn out that he didn't even know what he had witnessed - but his killers thought he witnessed it, and that's why he was killed.

They were part of DET - the infamous section that used all sorts of extrajudicial manouevres (warrantless wiretaps, breakins, infoltration of 'terrorist' organisations and - dare it be said - assassination) in Northern Ireland. The Northern Ireland experience ought to provide the lesson as to why 'crackdowns' and military-style policing do not work - but the State is not interested in what works; it is interested in keeping its population either docile or repressed.

Remember in the aftermath of the second bombing attepts I wrote about the wrongness of being faced by some dick with a Heckler & Koch HK-MP9? Well, I know my weapons (and the MP9 and MP5 are two nice ones): several of the 'police' had HK-G36C's which had adapted buttstocks and target illuminators - adaptations that only one crew on the planet can procure... 

The CCTV footage from the Tube station and from the train exists, has been leaked, and is in the process of conversion to a digital format. Anyone who has even a vestigial trace of belief in the State should not watch it, becasue they show the State at its most inhuman - holding down an innocent individual who is behaving perfectly normally, and blowing his fucking head off. If the State is going to treat its citizens the way Israel treats Palestinians, it is time for an intifada.

Federal Reserve Open Market Operations

The Fed's Open Market Operations desk performed 2 repurchase operations.

  • a $11.25billion, overnight repurchase entirely in T-backed collateral undertaken at a 7.1 basis point premium to the Fed Funds Rate (FFR); and
  • a $6billion, 14-day repurchase entirely in T-backed collateral, undertaken at a 2.5 basis point discount to the FFR.
So - plenty money, but precious little 'guaranteed carry'. No surprises then that the market couldn't get out of first gear. The Dow did try to shift into second, breaking yesterday's high by a whole 4 points... calling out "come in spinner" to the breakout traders once again and then handing them their heads. The breakout technique works about 25% of the time, unless you're in a rampaging bull market.

Major US Indices

When there's no catalyst to change momentum before the open, it's generally wise to expect the opening half-hour to look quite a lot like the previous day's closing hour - and today fell into line with that rule of thumb.

Speaking of the term 'rule of thumb', I understand that the term derives from the idea that so long as a man used something thinner than his thumb to beat his wife, he was unlikely to be charged with assault. (Although it may have something to do with the way artists are shown holding their thumb up to guide themselves... I like the wife-beating explanation better).

After 15 minutes, the Dow was showing a huge -268 reading on the CCI, even though it was only down 30-odd points. With no catalyst for a further decline, the market started to stabilise at about the time that a repo moonshot would normally appear - and although all the indices moved upwards from that time, it should be viewed more as eliminating that massive oversold condition rather than anything to do with the repurchase.

The Dow Jones Industrial Average gained 4.22 points (0.04%), closing out the day at 10554.93 points. The index hit an intraday high of 10592.9 at 1:30 p.m., after dipping to 10517.43 during the first ten minutes. 

Within the blue-chip index, 10 stocks rose, the biggest gainers being Altria Group (MO, +3.73% to $70.39) and Procter & Gamble (PG, +1.42% to $54.18), which accounted for 26 Dow points between them. Losers in the Dow numbered 20 and were led by General Motors (GM, -1.44% to $33.58) and Mcdonalds (MCD, -1.42% to $33.39), with these two stocks contributing -8 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the losers by 216.5m shares to 94m.

Neither of the harder-to-manipulate indices managed to replicate the Dow's tepid performance.

The broader S&P500 declined 1.22 points (0.1%), to 1219.02. Within the index, gainers numbered 182, while 298 S&P500 stocks fell for the day. Volume was tilted 2.3:1 in favour of the losers with 1005.37 million units traded in the losers as compared with 441.61 million traded in the winners .

Over at Times Square, the Nasdaq Composite lost 9.07 points (0.42%), to close at 2136.08, while larger-cap technology issues fared better with the Nasdaq100 losing 6.53 points (0.41%), to end at 1575.76 points. Within the tech benchmark, gainers numbered 35, while 61 Nasdaq100 stocks fell for the day. Volume was tilted 3.4:1 in favour of the losers with 435.87 million traded in the losers compared to 128.47 million in the winners.

NYSE Volume was chunky, with 1.79 billion shares changing hands, while Nasdaq Volume was below average, with 1.43 billion shares traded.

Major Market Statistics
Dow Jones Industrial Average10554.934.220.04%
Nasdaq Composite2136.08-9.07-0.42%
NYSE Volume1.79bn--
Nasdaq Volume1.43bn--


My 9-stock "bellwethers" group fell by an average of 0.28%

  • General Electric (GE) -$0.11 (0.32%) to $33.99;
  • Citigroup (C) +$0.11 (0.25%) to $44.21;
  • Wal Mart (WMT) +$0.13 (0.28%) to $47.24;
  • I.B.M. (IBM) -$0.15 (0.18%) to $81.15;
  • Intel (INTC) -$0.21 (0.8%) to $25.88;
  • Cisco Systems (CSCO) -$0.18 (1.01%) to $17.66;
  • eBay (EBAY) -$0.54 (1.33%) to $39.93;
  • Fannie Mae (FNM) +$0.45 (0.89%) to $50.76; and
  • Freddie Mac (FRE) -$0.20 (0.33%) to $60.98.

Market Breadth & Internals

NYSE declining Issues beat out advancers by 1986 to 1264, for a single-day A/D reading of -722; and Nasdaq losers exceeded gainers by 1862 to 1146. The 10-day moving average of the A/D line fell to -285.6 on the NYSE, while the 10dma of the Nasdaq A/D fell to -338.3.

On the NYSE declining volume was greater than volume in advancing issues by 1135.7 to 612.8 million shares; On the Nasdaq declining volume exceeded volume in advancing issues by 930.1 to 441.4 million shares.

57 NYSE-listed stocks rose to new 52-week highs, and 32 posted fresh 52-week lows, while on the Nasdaq there were 48 stocks that hit new 52-week highs, and 45 which fell to fresh 52-week lows.

Market Breadth Statistics

Advancing Volume (m)612.82441.43
Declining Volume (m)1135.69930.1
New Highs5748
New Lows3245

Market Sentiment Statistics
CBOE Volatility Index13.420.120.9%
CBOE Nasdaq Volatility Index15.29-0.28-1.8%
Equity Put-Call Ratio0.71-0.15-17.44%
10-day PCR0.6300%
SPX-VIX Ratio90.8-0.91-0.99%

Bond Market Analysis

Bonds rose sharply at the long end, with the yield on the benchmark 30-year Treasury bond shedding 4.8 bps to 4.427%. The 30-year bond future rose 21/32 to 116-08/32. Another day or so and it will be time to short the bond again.

Oh wait... another day or two and it will be Saturday... the bond short will have to wait until next week.

The middle of the yield curve was broadly higher: five year yields fell to 4.077%, and ten-year yields fell to 4.216%.

Spreads between short-dated (2-yr) Treasuries and high-grade corporate bonds of similar maturity profiles were 1.0 bps wider at -6.0 basis points; spreads between longer dated Treasuries and their corporate AAA counterparts rose to 55.0 bps for 10-year AAA, and 88.0 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 1.0 bps tighter at 29.0 basis points and the 10-year AAA-A spread 7.0 bps tighter at -2.0 bps.

Treasury Yields
UST 13wk (yld)3.4100%
UST 2Y (yld)3.98-0.05-1.24%
UST 5Y (yld)4.077-0.065-1.57%
UST 10Y (yld)4.216-0.057-1.33%
UST 30Y (yld)4.427-0.048-1.07%

The Banks Index rose 0.19 points (0.19%), to 99.36; within the index,

  • Golden West Financial (GDW) +$1.40 (2.26%) to $63.46;
  • Zions Bancorp (ZION) +$0.57 (0.8%) to $71.40;
  • Wachovia (WB) +$0.32 (0.63%) to $50.96;
  • JPMorganChase (JPM) +$0.20 (0.58%) to $34.66; and
  • Wells Fargo (WFC) +$0.33 (0.55%) to $60.34.

The Broker-dealer Index declined 0.28 points (0.16%), to 169.65; the ticket clippers lined up as follows -

  • Morgan Stanley (MWD) -$0.55 (1.04%) to $52.30;
  • Jeffries Group (JEF) -$0.40 (1.01%) to $39.30;
  • Legg Mason (LM) -$0.66 (0.62%) to $105.98;
  • Bear Stearns (BSC) -$0.54 (0.54%) to $99.31; and
  • Goldman Sachs (GS) -$0.28 (0.25%) to $110.85.

The Philadelphia SOX (Semiconductor) index shed 2.87 points (0.62%), at 461.28

  • Taiwan Semiconductors (TSM) -$0.22 (2.6%) to $8.24;
  • Teradyne (TER) -$0.34 (2.17%) to $15.34;
  • Texas Instruments (TXN) -$0.66 (2.05%) to $31.53;
  • Freescale Semiconductors (FSL-B) -$0.43 (1.71%) to $24.78; and
  • Advanced Micro Devices (AMD) -$0.32 (1.51%) to $20.87.

Gold & Silver Markets

Gold fell by $0.50 (0.11%) to close at $441.50 per ounce. The session low occurred at $440.00 even.

The Gold Bugs Index declined 0.73 points (0.35%), to 208.19

  • Eldorado Gold (EGO) -$0.13 (4.15%) to $3.00;
  • Randgold Resources (GOLD) -$0.35 (2.49%) to $13.72;
  • Gold Fields (GFI) -$0.17 (1.51%) to $11.09;
  • Glamis Gold (GLG) -$0.24 (1.28%) to $18.48; and
  • Meridian Gold (MDG) -$0.19 (0.98%) to $19.19.

Silver rose $0.01 (0.07%) to close at $7 per ounce. The Gold and Silver Index (XAU) lost 0.21 points (0.22%), ending the day at 95.84 points.

  • Gold Fields (GFI) -$0.17 (1.51%) to $11.09;
  • Placer Dome (PDG) -$0.17 (1.13%) to $14.81;
  • Meridian Gold (MDG) -$0.19 (0.98%) to $19.19; and
  • Anglogold Ashanti (AU) -$0.35 (0.98%) to $35.52.
Precious Metals and Indices
PHLX Gold and Silver Index95.84-0.21-0.22%
AMEX Gold BUGS Index208.19-0.73-0.35%

Oil Market

One of the things that keeps you on your toes in this game, is being able to be right and wrong at the same time. Blind Freddie could see today's bounce in crude coming from a mile off; I wrote yesterday of the high likelihood of a bounce of over a dollar a barrel.

Problem is, it happened from a level considerably lower than I had expected. The black stuff dipped all the way down to $62.25 before making an almighty dash for the sky (it went from $62.25 to $63.64 in less than an hour).

By the close Oil was up a meagre $0.02 per barrel, closing at $63.27 per barrel. The Oil and Gas Index (XOI) dipped 4.03 points (0.42%), to end the session at 948.26

  • BP (BP) -$0.76 (1.12%) to $67.20;
  • Repsol YPF (REP) -$0.25 (0.87%) to $28.57; and
  • TotalFinaElf S.A. (TOT) -$0.85 (0.67%) to $125.80.

The Oil service stocks (OSX) Index rose 0.1 points (0.06%), ending the day at 159.73

  • Global Industries (GLBL) +$0.10 (0.92%) to $10.96;
  • Cooper Cameron (CAM) +$0.36 (0.52%) to $69.19; and
  • Tidewater (TDW) +$0.19 (0.48%) to $39.72.
Energy Complex
Reuters CRB309.69-0.42-0.14%
Crude Oil Light Sweet63.270.020.03%
Heating Oil1.79050.010.37%
Natural Gas8.928-0.46-4.93%
Unleaded Gas1.8629-0.03-1.49%
AMEX Oil Index948.26-4.03-0.42%
Oil Service Index159.730.10.06%

Currency Markets

USD Exchange Rates
US Dollar Index88.540.540.61%
Australian Dollar0.7533-0.0072-0.95%
Swiss Franc1.27080.00870.69%
Canadian Dollar0.8206-0.0036-0.44%