Note - from June 24th 2009, this blog has migrated from Blogger to a self-hosted version. Click here to go straight there.
Some time over the weekend I will stick up a couple of explanatory charts which will point out precisely why the bounce this week was absolutely ineveitable... and why it ought to have arrived a day before it did. I'm not sure if that will be before or after I update the Model Portfolios - probably before.
Federal Reserve Open Market Operations
The Fed's Open Market Operations desk performed 1 repurchase operation - a $2.75billion, weekend repurchase with $0.748billion in T-backed collateral undertaken at a 7.9 basis point discount to the Fed Funds Rate (FFR).
Major US Indices
The Dow Jones Industrial Average was barely changed, close-to-close. The final net move for the session was a lousy 0.64 points (0.01%), with the index finishing the week at 11014.55 points. The intraday high of 11045.2 was hit during a strange program-trade driven burst of wanton buying just before the start of the last half-hour - a spurt which was given back in its entirety in the lkast half -hour. Typical expiration shenanigans - it is blatant, foreseeable and as corrupt as Dick Cheney... but none of the supposed market overseers will ever do anything about it.
It was also a narrow-range session - pretty much to be expected given the huge runup of the last couple of sessions (from low to high, the Dow futures moved almost 400 points in less than 2 sessions): the session low today was 10984.13 (set just after 1:45 p.m.), so the entire day's trade took place in a 30-Dow-point range.
Within the blue-chip index, 15 stocks rose, the biggest gainers being Hewlett Packard (HPQ, +3.64% to $33.04) and United Technology (UTX, +1.55% to $61.75), which accounted for 17 Dow points between them. Losers in the Dow numbered 15 and were led by Home Depot (HD, -1.23% to $36.91) and American Express (AXP, -1.21% to $52.92), with these two stocks contributing -9 Dow points worth of downward pressure on the index. Volume traded was tilted in favour of the gainers by 387.4m shares to 212.6m.
It's not a surpsie that both the internals and the direction of the Dow, are at odds with the broader indices. The Dow is the 'last refuge of the scoundrels' when it comes to trying to paint the tape; it is much more easily manipulated than the S&P, for the simple reason that many of the Dow components are relatively illiquid when everone gets on the same side.
The broader S&P500 declined 4.62 points (0.37%), ending the day at 1251.54. Within the index, gainers numbered 131, while 335 S&P500 stocks fell for the day. Volume was tilted 1.6:1 in favour of the losers with 1524.77 million units traded in the losers as compared with 942.45 million traded in the winners .
Over at Times Square, the Nasdaq Composite lost 14.2 points (0.66%), to close at 2129.95, while larger-cap technology issues fared better with the Nasdaq100 losing 10.24 points (0.65%), to end at 1562.84 points. Within the tech benchmark, gainers numbered 26, while 67 Nasdaq100 stocks fell for the day. Volume was tilted 1.2:1 in favour of the losers with 547.24 million traded in the losers compared to 471.05 million in the winners .
NYSE Volume was super-chunky, with 2.82 billion shares changing hands, while Nasdaq Volume was super-chunky (over 2 bill), with 2.51 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 | 11014.55 | -0.64 | -0.01% |
| S&P500 | 1251.54 | -4.62 | -0.37% |
| Nasdaq Composite | 2129.95 | -14.2 | -0.66% |
| Nasdaq100 | 1562.84 | -10.24 | -0.65% |
| NYSE Volume | 2.82bn | - | - |
| Nasdaq Volume | 2.51bn | - | - |
Bellwethers
My 9-stock "bellwethers" group fell by an average of 0.76%
- General Electric (GE) -$0.18 (0.53%) to $33.93;
- Citigroup (C) -$0.32 (0.66%) to $48.36;
- Wal Mart (WMT) -$0.35 (0.72%) to $48.31;
- I.B.M. (IBM) -$0.61 (0.78%) to $77.95;
- Intel (INTC) +$0.18 (0.99%) to $18.30;
- Cisco Systems (CSCO) -$0.24 (1.19%) to $19.98;
- eBay (EBAY) -$0.46 (1.48%) to $30.28;
- Fannie Mae (FNM) -$0.96 (1.99%) to $47.25; and
- Freddie Mac (FRE) -$0.26 (0.45%) to $57.50.
Market Breadth & Internals
NYSE declining Issues beat out advancers by 2054 to 1193, for a single-day A/D reading of -861; and Nasdaq losers exceeded gainers by 1994 to 1025. The 10-day moving average of the A/D line fell to -301.9 on the NYSE, while the 10dma of the Nasdaq A/D fell to -332.8.
On the NYSE declining volume was greater than volume in advancing issues by 1932.8 to 873.7 million shares; On the Nasdaq declining volume exceeded volume in advancing issues by 1687.6 to 815.4 million shares.
26 NYSE-listed stocks rose to new 52-week highs, and 103 posted fresh 52-week lows, while on the Nasdaq there were 53 stocks that hit new 52-week highs, and 88 which fell to fresh 52-week lows.
| Market Breadth Statistics | ||
| NYSE | Nasdaq | |
| Advancers | 1193 | 1025 |
| Decliners | 2054 | 1994 |
| Advancing Volume (m) | 873.65 | 815.4 |
| Declining Volume (m) | 1932.81 | 1687.61 |
| New Highs | 26 | 53 |
| New Lows | 103 | 88 |
| Market Sentiment Statistics | |||
| Index | Close | Gain(Loss) | % |
| CBOE Volatility Index | 17.25 | 1.35 | 8.49% |
| CBOE Nasdaq Volatility Index | 21.69 | 2.22 | 11.4% |
| Equity Put-Call Ratio | 0.71 | -0.3 | -29.7% |
| 10-day PCR | 0.87 | -0.02 | -2.05% |
| SPX-VIX Ratio | 72.6 | -6.45 | -8.17% |
Bond Market Analysis
Bonds fell at the long end, with the yield on the benchmark 30-year Treasury bond rising 3.7 bps to 5.172%.
The middle of the yield curve was broadly lower: five year yields rose to 5.098%, and ten-year yields rose to 5.128%.
Spreads between short-dated (2-yr) Treasuries and high-grade corporate bonds of similar maturity profiles were 0.0 bps tighter at 40.0 basis points; spreads between longer dated Treasuries and their corporate AAA counterparts rose to 78.0 bps for 10-year AAA, and 105.0 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 0.0 bps looser at 27.0 basis points and the 10-year AAA-A spread 1.0 bps tighter at 17.0 bps.
| Treasury Yields | |||
| Index | Close | Gain(Loss) | % |
| UST 13wk (yld) | 4.745 | 0.025 | 0.53% |
| UST 2Y (yld) | 5.15 | 0.09 | 1.78% |
| UST 5Y (yld) | 5.098 | 0.027 | 0.53% |
| UST 10Y (yld) | 5.128 | 0.03 | 0.59% |
| UST 30Y (yld) | 5.172 | 0.037 | 0.72% |
The Banks Index lost 0.71 points (0.66%), at 106.82; within the index,
- BB&T Corp (BBT) -$0.60 (1.4%) to $42.18;
- Fifth Third Bancorp (FITB) -$0.44 (1.16%) to $37.54;
- Comerica (CMA) -$0.61 (1.12%) to $54.01;
- JPMorganChase (JPM) -$0.44 (1.08%) to $40.16; and
- Bank Of America (BAC) -$0.49 (1.02%) to $47.42.
The Broker-dealer Index shed 0.76 points (0.37%), closing at 203.35; the ticket clippers lined up as follows -
- E*Trade (ET) -$0.37 (1.72%) to $21.20;
- Ameritrade (AMTD) -$0.22 (1.41%) to $15.36;
- Merrill Lynch (MER) -$0.60 (0.88%) to $67.25;
- Lehman Brothers (LEH) -$0.37 (0.58%) to $63.35; and
- Jeffries Group (JEF) -$0.11 (0.4%) to $27.11.
The Philadelphia SOX (Semiconductor) index dipped 4.05 points (0.89%), to end the session at 453.53
- Applied Materials (AMAT) -$0.53 (3.15%) to $16.30;
- National Semiconductors (NSM) -$0.49 (1.97%) to $24.35;
- Advanced Micro Devices (AMD) -$0.47 (1.8%) to $25.64;
- Novellus Systems (NVLS) -$0.43 (1.75%) to $24.21; and
- ST Microelectronic (STM) -$0.27 (1.71%) to $15.48.
Gold & Silver Markets
Gold rose $11.4 (2%) to close at $581.7 per ounce.
The Gold Bugs Index dipped 3.46 points (1.16%), ending the day at 294.38
- Eldorado Gold (EGO) -$0.28 (6.14%) to $4.28;
- Meridian Gold (MDG) -$1.23 (4.15%) to $28.41;
- Glamis Gold (GLG) -$1.03 (3.16%) to $31.60;
- Agnico Eagle (AEM) -$0.58 (2.04%) to $27.84; and
- Kinross Gold (KGC) -$0.15 (1.52%) to $9.71.
Silver rose $0.16 (1.6%) to close at $10.13 per ounce.
The Gold and Silver Index (XAU) lost 1.1 points (0.85%), at 128.06 points.
- Meridian Gold (MDG) -$1.23 (4.15%) to $28.41;
- Durban Rooderpoert Deep (DROOY) -$0.04 (3.05%) to $1.27;
- Agnico Eagle (AEM) -$0.58 (2.04%) to $27.84; and
- Kinross Gold (KGC) -$0.15 (1.52%) to $9.71.
| Precious Metals and Indices | |||
| Index | Close | Gain(Loss) | % |
| Gold | 581.70 | 11.40 | 2% |
| Silver | 10.13 | 0.16 | 1.6% |
| PHLX Gold and Silver Index | 128.06 | -1.1 | -0.85% |
| AMEX Gold BUGS Index | 294.38 | -3.46 | -1.16% |
Oil Market
Oil was firmer, rising by $0.38 per barrel, closing at $69.88 per barrel. The rest of the Energy complex was soft, but not alarmingly so.
The Oil and Gas Index (XOI) lost 5.81 points (0.55%), ending the day at 1054.99
- ChevronTexaco (CVX) -$0.72 (1.21%) to $58.71;
- TotalFinaElf S.A. (TOT) -$0.71 (1.15%) to $60.94; and
- Sunoco (SUN) -$0.63 (0.97%) to $64.00.
The Oil service stocks (OSX) Index lost 1.33 points (0.66%), closing at 200.46
- National Oilwells/Varco (NOV) -$1.01 (1.63%) to $60.94;
- GlobalSantaFe (GSF) -$0.78 (1.44%) to $53.52; and
- BJ Services (BJS) -$0.51 (1.41%) to $35.72.
| Energy Complex | |||
| Index | Close | Gain(Loss) | % |
| Reuters CRB | 379.4 | 0.4 | 0.11% |
| Crude Oil Light Sweet | 69.88 | 0.38 | 0.55% |
| Heating Oil | 1.9324 | 0 | -0.23% |
| Natural Gas | 7.185 | -0.02 | -0.31% |
| Unleaded Gas | 2.0382 | 0 | -0.07% |
| AMEX Oil Index | 1054.99 | -5.81 | -0.55% |
| Oil Service Index | 200.46 | -1.33 | -0.66% |
Currency Markets
| USD Exchange Rates | |||
| Index | Close | Gain(Loss) | % |
| US Dollar Index | 85.52 | -0.12 | -0.14% |
| Euro | 1.2647 | -0.0045 | -0.35% |
| Yen | 115.175 | 114.2938 | 12970.25% |
| Sterling | 1.8524 | 0.001 | 0.05% |
| Australian Dollar | 0.7384 | -0.0015 | -0.2% |
| Swiss Franc | 1.2316 | 0.412 | 50.27% |
| Canadian Dollar | 0.8907 | -0.0088 | -0.98% |
