Interdum stultus opportuna loquitur...

Wednesday, November 16, 2005

USRant: Soft, But Stubborn...

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The day's economic data looked OK on the fact of it - the CPI was higher than expected at the headline level (+02% versus expectatins for flat to +0.1%) , but in line with expectations at the 'core' (+0.2%). Business Inventories rose more than expected (+0.5% versus expectations for +0.3%) . The Mortgage Bankers Purchase Index rose 2.6%, but it's interesting to see the refinancing component of that index falling out of bed rather badly; it has fallen 20% in a month, and fell more than 5% in the last week. 

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 undertaken at a 3 basis point discount to the Fed Funds Rate (FFR).

Major US Indices

The Dow Jones Industrial Average dipped 11.68 points (0.11%), closing out the day at 10674.76 points. The index hit an intraday high of 10712.22 halfway through the fourth minute of trade. From there it meadered around all over the place, with the key pivot obvious at 10700 on the Dow futures. Prior to its breach (from above) it was like a trampoline; when the market got decisively below it and tried to rally back trough it, it was like a coffin lid (although that lid was re-opened in the leadup to the closing bell).  

The Dow dropped as low as 10652.27 (10650-ish), the low being registered just after 2:30 p.m. NY time. The close was therefore just below the midpoint of the day's trading range - and as I mentioned above, that key level of 10700 on the Dow futures was regained (as if by magic) just before the close.

Within the blue-chip index, 16 stocks rose, the biggest gainers being Caterpillar (CAT, +1.48% to $56.73) and Exxon Mobil (XOM, +1.33% to $57.18), which accounted for 13 Dow points between them. Losers in the Dow numbered 14 and were led by General Motors (GM, dropping another 5.84% to $21.29... Kirk Kerkorian must be getting sweaty palms) and Pfizer (PFE, -2.38% to $21.37), with these two stocks contributing -15 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the gainers by 233.8m shares to 230.3m.

The broader S&P500 advanced 2.2 points (0.18%), at 1231.21. Within the index, gainers numbered 248, while 235 S&P500 stocks fell for the day. Volume was pretty evenly split, but was just tilted in favour of the winners with 949.88 million units traded in advancing S&P400 stocks as compared with 928.89 million traded in the index's losers.

Over at Times Square, the Nasdaq Composite added 1.19 points (0.05%), to close at 2187.93, while larger-cap technology issues fared better with the Nasdaq100 adding 7.14 points (0.43%), to end at 1651.45 points. Within the tech benchmark, gainers numbered 48, while 47 Nasdaq100 stocks fell for the day. Volume was tilted 1.2:1 in favour of the winners with 433.62 million traded in the winners compared to 355.75 million in the losers .

NYSE Volume was super-chunky, with 2.12 billion shares changing hands, while Nasdaq Volume was solid-to-chunky, with 1.72 billion shares traded.

Major Market Statistics
Dow Jones Industrial Average10674.76-11.68-0.11%
Nasdaq Composite2187.931.190.05%
NYSE Volume2.12bn--
Nasdaq Volume1.72bn--


My 9-stock "bellwethers" group fell by an average of 0.38%

  • General Electric (GE) +$0.14 (0.41%) to $34.54;
  • Citigroup (C) +$0.03 (0.06%) to $47.69;
  • Wal Mart (WMT) +$0.10 (0.21%) to $48.88;
  • I.B.M. (IBM) +$1.01 (1.18%) to $86.54;
  • Intel (INTC) -$0.21 (0.84%) to $24.87;
  • Cisco Systems (CSCO) -$0.05 (0.29%) to $17.22;
  • eBay (EBAY) -$0.51 (1.18%) to $42.54;
  • Fannie Mae (FNM) -$0.36 (0.77%) to $46.55; and
  • Freddie Mac (FRE) -$1.36 (2.18%) to $61.08.

Market Breadth & Internals

NYSE declining Issues beat out advancers by 1719 to 1597, for a single-day A/D reading of -122; and Nasdaq losers exceeded gainers by 1800 to 1226. The 10-day moving average of the A/D line rose to -151.7 on the NYSE, while the 10dma of the Nasdaq A/D fell to -209.4.

NYSE advancing volume exceeded volume in decliners by 1073.1 to 1030.2 million shares; Nasdaq advancing volume was greater than volume in decliners by 861.8 to 831.1 million shares.

46 NYSE-listed stocks rose to new 52-week highs, and 217 posted fresh 52-week lows, while on the Nasdaq there were 66 stocks that hit new 52-week highs, and 100 which fell to fresh 52-week lows.

Market Breadth Statistics

Advancing Volume (m)1073.11861.78
Declining Volume (m)1030.2831.06
New Highs4666
New Lows217100

Market Sentiment Statistics
CBOE Volatility Index12.260.030.25%
CBOE Nasdaq Volatility Index13.96-0.83-5.61%
Equity Put-Call Ratio0.68-0.12-15%
10-day PCR0.5800%
SPX-VIX Ratio100.4-0.07-0.07%

Bond Market Analysis

Bonds rose sharply at the long end, with the yield on the benchmark 30-year Treasury bond shedding 6.7 bps to 4.674%.

The middle of the yield curve was broadly higher: five year yields fell to 4.43%, and ten-year yields fell to 4.484%.

Spreads between short-dated (2-yr) Treasuries and high-grade corporate bonds of similar maturity profiles were 8.0 bps wider at 18.0 basis points; spreads between longer dated Treasuries and their corporate AAA counterparts rose to 64.0 bps for 10-year AAA, and 91.0 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 closing 7.0 bps to 30.0 basis points and the 10-year AAA-A spread 2.0 bps tighter at 3.0 bps.

Treasury Yields
UST 13wk (yld)3.912-0.003-0.08%
UST 2Y (yld)4.38-0.07-1.57%
UST 5Y (yld)4.43-0.072-1.6%
UST 10Y (yld)4.484-0.073-1.6%
UST 30Y (yld)4.674-0.067-1.41%

The Banks Index lost 0.44 points (0.43%), to 101.87; within the index,

  • National City Corp (NCC) -$0.40 (1.19%) to $33.15;
  • Golden West Financial (GDW) -$0.62 (0.98%) to $62.54;
  • Northern Trust (NTRS) -$0.44 (0.85%) to $51.56;
  • Wells Fargo (WFC) -$0.52 (0.85%) to $60.99; and
  • Fifth Third Bancorp (FITB) -$0.32 (0.79%) to $39.95.

The Broker-dealer Index shed 1.85 points (0.97%), at 188.62; the ticket clippers lined up as follows -

  • E*Trade (ET) -$0.79 (4.16%) to $18.18;
  • Charles Schwab (SCH) -$0.55 (3.56%) to $14.89;
  • Ameritrade (AMTD) -$0.36 (1.6%) to $22.17;
  • Morgan Stanley (MWD) -$0.79 (1.43%) to $54.38; and
  • Jeffries Group (JEF) -$0.65 (1.41%) to $45.60.

The Philadelphia SOX (Semiconductor) index slid 0.39 points (0.08%), to 461.88

  • Teradyne (TER) -$0.37 (2.52%) to $14.31;
  • Freescale Semiconductors (FSL-B) -$0.56 (2.09%) to $26.25;
  • Altera (ALTR) -$0.27 (1.53%) to $17.37;
  • ST Microelectronic (STM) -$0.21 (1.21%) to $17.12; and
  • Xilinx (XLNX) -$0.30 (1.2%) to $24.69.

Gold & Silver Markets

Gold rose a staggering $10.10 (2.15%) to close at $479.10 per ounce; someone must've leant on a keyboard somewhere.

The Gold Bugs Index gained 15.51 points (6.89%), to end the session at 240.73

  • Gold Fields (GFI) +$1.46 (10.83%) to $14.94;
  • Coeur d'Alene (CDE) +$0.33 (8.51%) to $4.21;
  • Golden Star (GSS) +$0.17 (8.02%) to $2.29;
  • Randgold Resources (GOLD) +$1.13 (7.88%) to $15.47; and
  • Kinross Gold (KGC) +$0.53 (7.86%) to $7.27.

Silver rose $0.22 (2.76%) to close at $8 per ounce. 

The Gold and Silver Index (XAU) gained 6.43 points (5.96%), to 114.29 points.

  • Gold Fields (GFI) +$1.46 (10.83%) to $14.94;
  • Kinross Gold (KGC) +$0.53 (7.86%) to $7.27;
  • Harmony Gold (HMY) +$0.91 (7.82%) to $12.55; and
  • Agnico Eagle (AEM) +$1.03 (7.45%) to $14.86.
Precious Metals and Indices
PHLX Gold and Silver Index114.296.435.96%
AMEX Gold BUGS Index240.7315.516.89%

Oil Market

Oil was firmer, rising by $0.90 per barrel, closing at $57.88 per barrel. The Energy Information Adminiustration's Petrolum Status Report showed declines in most classes of Energy products, with the exception of Heating Oil.

The Oil and Gas Index (XOI) added 14.91 points (1.55%), to end the session at 976.61

  • ConocoPhillips (COP) +$1.82 (2.89%) to $64.70;
  • Amerada Hess (AHC) +$3.55 (2.84%) to $128.49; and
  • Sunoco (SUN) +$1.93 (2.61%) to $75.91.

The Oil service stocks (OSX) Index posted a rise of 4.86 points (2.92%), to end the session at 171.3

  • Smith International (SII) +$1.70 (5.03%) to $35.49;
  • Transocean (RIG) +$2.46 (4.28%) to $59.94; and
  • Global Industries (GLBL) +$0.50 (3.92%) to $13.26.
Energy Complex
Reuters CRB331.92.40.73%
Crude Oil Light Sweet57.880.91.58%
Heating Oil1.72920.052.87%
Natural Gas12.330.776.63%
Unleaded Gas1.480.021.62%
AMEX Oil Index976.6114.911.55%
Oil Service Index171.34.862.92%

Currency Markets

USD Exchange Rates
US Dollar Index92.430.390.42%
Australian Dollar0.7306-0.0027-0.37%
Swiss Franc1.32540.00850.65%
Canadian Dollar0.8375-0.0008-0.1%