Interdum stultus opportuna loquitur...

Saturday, December 10, 2005

USRant: Late-Day Drive as Oil Tanks...

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

The primary economic-data-of-interest for the session was the University of Michigan Consumer Sentiment Index, which is as pointless a number as you could ever imagine. If you want to 'predict' what happened in the stock market in the three weeks before the index was released, then the UMich index is something you might want to look at... because that's pretty much all it tracks - how giddy survey respondents were (or weren't) in the period prior to the survey being taken. The survey is completely uncorrelated with patterns of futures consumption activity.

Still, the number was better than expected (consensus: 86; actual 88.7). What does that mean for consumption spending? Nothing.

Apart from that, data on Wholesale Trade was released, and showed that inventories rose 0.2% for the month - the inventory to sales rate fell to a record low of 1.13%; this apparent evidence of demand outstripping supply (i.e., the decumulation of unwanted inventories) was mainly due to falling petroleum stockpiles. Two important barometers within in the index - automobile dealer inventories and lumber inventories - both rose sharply; that's not a sign of strength in either consumption or dwelling demand.

Federal Reserve Open Market Operations

The Fed's Open Market Operations desk performed 1 repurchase operation - a $5.5billion, weekend repurchase entirely in T-backed collateral undertaken at a 19 basis point premium to the Fed Funds Rate (FFR). That premium tells you straight out that the Fed is raising rates at meeting next week. 

Major US Indices

The Dow Jones Industrial Average gained 23.46 points (0.22%), closing out the day at 10778.58 points. After trying to rally in the first 15 minutes of trade, the index gave up and slid to a session low 10729.91 (10725-ish) jsut after the end of the first hour (it was a 'tease break' of the first-hour low... the usual malarey). After luring nuffnuff breakout traders onto the short side, the index went sideways-to-up for a couple of hours, and then broke upwards strongly after 2 p.m., hitting an intraday high of 10805.95 (10800-ish) just before 3:30 p.m. and then settling down tinto the close. Friday afternoon rally? Odd, that. 

Within the blue-chip index, 19 stocks rose, the biggest gainers being General Motors (GM, +4.18% to $22.92) and Hewlett Packard (HPQ, +2.36% to $29.92), which accounted for 8 Dow points between them. Losers in the Dow numbered 10 and were led by Merck (MRK, -1.85% to $29.13) and Pfizer (PFE, -1.81% to $20.62), with these two stocks contributing -8 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the gainers by 255.1m shares to 117.4m.

The broader S&P500 posted a rise of 3.53 points (0.28%), ending the day at 1259.37. Within the index, gainers numbered 343, while 135 S&P500 stocks fell for the day. Volume was tilted 2.3:1 in favour of the winners with 1178.51 million units traded in the winners as compared with 521.07 million traded in the losers .

Over at Times Square, the Nasdaq Composite rose 10.27 points (0.46%), to close at 2256.73, while larger-cap technology issues fared worse with the Nasdaq100 adding 7.03 points (0.42%), to end at 1692.62 points. Within the tech benchmark, gainers numbered 65, while 30 Nasdaq100 stocks fell for the day. Volume was tilted 3.9:1 in favour of the winners with 645.59 million traded in the winners compared to 163.53 million in the losers .

NYSE Volume was reasonable, with 1.9 billion shares changing hands, while Nasdaq Volume was chunky, with 1.71 billion shares being shifted from one online brokerage account to another (and back again, in all likelihood).

Major Market Statistics
Dow Jones Industrial Average10778.5823.460.22%
Nasdaq Composite2256.7310.270.46%
NYSE Volume1.9bn--
Nasdaq Volume1.71bn--


My 9-stock "bellwethers" group rose by an average of 0.74%

  • General Electric (GE) +$0.18 (0.51%) to $35.53;
  • Citigroup (C) +$0.41 (0.85%) to $48.91;
  • Wal Mart (WMT) +$0.38 (0.8%) to $48.08;
  • I.B.M. (IBM) -$0.53 (0.61%) to $86.97;
  • Intel (INTC) +$0.38 (1.48%) to $26.08;
  • Cisco Systems (CSCO) -$0.09 (0.51%) to $17.55;
  • eBay (EBAY) -$0.05 (0.12%) to $43.42;
  • Fannie Mae (FNM) +$0.96 (2.04%) to $48.00; and
  • Freddie Mac (FRE) +$1.39 (2.24%) to $63.40.

Market Breadth & Internals

NYSE advancing Issues exceeded decliners by 1981 to 1297 for a single-day A/D reading of 684; Nasdaq gainers trumped losers by 1819 to 1201. The 10-day moving average of the A/D line rose to 123.6 on the NYSE, while the 10dma of the Nasdaq A/D rose to 27.7.

NYSE advancing volume exceeded volume in decliners by 1124.4 to 743 million shares; Nasdaq advancing volume was greater than volume in decliners by 1227.2 to 449.4 million shares.

105 NYSE-listed stocks rose to new 52-week highs, and 62 posted fresh 52-week lows, while on the Nasdaq there were 123 stocks that hit new 52-week highs, and 25 which fell to fresh 52-week lows.

Market Breadth Statistics

Advancing Volume (m)1124.361227.23
Declining Volume (m)742.98449.41
New Highs105123
New Lows6225

Market Sentiment Statistics
CBOE Volatility Index11.69-0.52-4.26%
CBOE Nasdaq Volatility Index15.14-0.3-1.94%
Equity Put-Call Ratio0.67-0.28-29.47%
10-day PCR0.5800%
SPX-VIX Ratio107.74.884.74%

Bond Market Analysis

Bonds fell at the long end, with the yield on the benchmark 30-year Treasury bond rising 6.4 bps to 4.736%. Just get through 4.75% yield already...

The middle of the yield curve was broadly lower in price: five year yields rose to 4.44%, and ten-year yields rose to 4.537%.

Spreads between short-dated (2-yr) Treasuries and high-grade corporate bonds of similar maturity profiles were 1.0 bps tighter at 12.0 basis points; spreads between longer dated Treasuries and their corporate AAA counterparts fell to 61.0 bps for 10-year AAA, and 90.0 bps for 20-years.

Credit spreads (spreads between corporate bonds of the same maturity profile but different creditworthiness) were broadly wider with the AAA-A spread on 20-years 9.0 bps wider at 20.0 basis points and the 10-year AAA-A spread 8.0 bps wider at 6.0 bps.

Treasury Yields
UST 13wk (yld)3.842-0.003-0.08%
UST 2Y (yld)4.4100%
UST 5Y (yld)4.440.0761.74%
UST 10Y (yld)4.5370.0731.64%
UST 30Y (yld)4.7360.0641.37%

The Banks Index added 0.97 points (0.94%), ending the day at 104.12; within the index,

  • Fifth Third Bancorp (FITB) +$1.05 (2.69%) to $40.09;
  • Northern Trust (NTRS) +$1.13 (2.14%) to $53.84;
  • BB&T Corp (BBT) +$0.63 (1.51%) to $42.41;
  • M&T Bank Corp (MTB) +$1.54 (1.42%) to $109.62; and
  • North Fork Bancorp (NFB) +$0.34 (1.25%) to $27.62.

The Broker-dealer Index posted a rise of 0.13 points (0.07%), ending the day at 194.28; the ticket clippers lined up as follows -

  • Goldman Sachs (GS) +$1.02 (0.79%) to $129.66;
  • Lehman Brothers (LEH) +$0.81 (0.64%) to $127.65;
  • Merrill Lynch (MER) +$0.30 (0.45%) to $67.55;
  • Bear Stearns (BSC) +$0.48 (0.43%) to $111.49; and
  • A G Edwards (AGE) +$0.18 (0.4%) to $44.74.

The Philadelphia SOX (Semiconductor) index rose 8.8 points (1.8%), closing at 497.21

  • Advanced Micro Devices (AMD) +$1.25 (4.87%) to $26.90;
  • Marvell Tech Group (MRVL) +$2.40 (4.17%) to $59.90;
  • Xilinx (XLNX) +$0.63 (2.42%) to $26.65;
  • Teradyne (TER) +$0.35 (2.33%) to $15.34; and
  • Texas Instruments (TXN) +$0.74 (2.27%) to $33.37.

Gold & Silver Markets

Gold rose $7.50 (1.43%) to close at $530.20 per ounce. It has risen a whopping $23 this week; to me, that seems excessive - and I'm going to start looking to short Gold next week. That will be the first time in Rant history, and in fact for the first time since a one-day short follwing a spike in Gold to above $300, way way back in January 1999.

The Gold Bugs Index dipped 3.53 points (1.33%), ending the day at 261.33

  • Golden Star (GSS) -$0.24 (9.02%) to $2.42;
  • Randgold Resources (GOLD) -$0.69 (4.08%) to $16.09;
  • Glamis Gold (GLG) -$0.81 (3.19%) to $24.57;
  • Eldorado Gold (EGO) -$0.14 (3.19%) to $4.25; and
  • Hecla Mining (HL) -$0.10 (2.56%) to $3.81.

Silver rose $0.11 (1.17%) to close at $9.10 per ounce. 

The Gold and Silver Index (XAU) lost 1.24 points (1%), to end the session at 122.94 points.

  • Goldcorp (GG) -$0.48 (2.25%) to $20.82;
  • Barrick Gold (ABX) -$0.43 (1.52%) to $27.77;
  • Harmony Gold (HMY) -$0.18 (1.37%) to $13.00; and
  • Newmont Mining (NEM) -$0.62 (1.23%) to $49.66.
Precious Metals and Indices
PHLX Gold and Silver Index122.94-1.24-1%
AMEX Gold BUGS Index261.33-3.53-1.33%

Oil Market

Oil lost ground, shedding $1.27 per barrel, closing at $59.39 per barrel. 

The Oil and Gas Index (XOI) dipped 16.96 points (1.66%), to 1006.99

  • Sunoco (SUN) -$2.05 (2.45%) to $81.59;
  • Amerada Hess (AHC) -$2.45 (1.95%) to $123.16; and
  • Kerr Mcgee (KMG) -$1.82 (1.94%) to $91.88.

The Oil service stocks (OSX) Index declined 1.41 points (0.74%), ending the day at 188.81

  • Tidewater (TDW) -$0.82 (1.67%) to $48.28;
  • Noble Corp (NE) -$1.20 (1.59%) to $74.33; and
  • BJ Services (BJS) -$0.58 (1.49%) to $38.45.
Energy Complex
Reuters CRB343.21-1.48-0.43%
Crude Oil Light Sweet59.39-1.27-2.09%
Heating Oil1.7318-0.05-2.88%
Natural Gas14.312-0.68-4.55%
Unleaded Gas1.6049-0.02-1.33%
AMEX Oil Index1006.99-16.96-1.66%
Oil Service Index188.81-1.41-0.74%

Currency Markets

USD Exchange Rates
US Dollar Index91.30.060.07%
Australian Dollar0.75050.0010.13%
Swiss Franc1.30270.00260.2%
Canadian Dollar0.86440.00140.16%