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Well, whoever said "It's the economy, stupid" was an idiot. It's clear to anyone who watches CNBC that an economy that's dead in the water is the perfect signal to buy stocks. then again, according to CNBC, a booming economy is also a perfect signal to buy stocks. If it's sunny, it's a perfect time to buy stocks, and if it's raining, stocks are the perfect thing to buy. Democrats likely to win the White House? Perfect time to buy stocks. Republican? Perfect... you get the picture.
Anyhow - the reality is that this market - in the US and around the world - is starting to behave like an ADD-affected kiddie who has just had twelve litres of Red Bull and a chocolate crackle made with real crack.
So MBIA says it thinks it; might keep its AAA rating... big deal! It just means it has written a big enough cheque to encourage S&P, Moodys and Fitch to keep looking the other way - as they do until such time as the facts are ineluctable. Frankly any bond manager who relies on ratings agencies should be sacked, because the ratings agencies, as I have said time and time again, are corrupt, hopeless and their ratings are utterly useless.
Economic News
- US Personal Consumption Spending rose 0.2% - the slowest pace in 6 months - and in line with expectations.
- Personal Income rose 0.5%, just beating expectations of a 0.4% rise;
- the PCE deflator was reported at 0.2%, in line with expectations and absolutly unbelievable (does anybody believe that inflation is only 2.6% a year? Why bother to produce statistics that are utterly meaningless?)
- The Employment Cost index rose to 0.8% - in line with consensus, but abysmally low when you consider that it's a quarterly number and the PCE deflator is Monthly (and biased downward). It gives wage-earners precious little 'wiggle room' - if inflation is underreported by 0.06% per month, wage earners went backwards in real terms.
- Initial Jobless Claims were awful at 375k; consensus was for 325k; and finally
- The Chicago PMI was 51.5, and internally it was woeful.
Fed Open Market Operations
The Fed did 2 repurchase operations today -
- a $5 billion, 14-day repurchase, entirely in Treasury-backed collateral, undertaken at a whopping 90 basis point discount to Fed Funds; and
- a $4.5 billion overnight operation with a lousy 200 million in T-backed.
Headline Indices
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The Dow Jones Industrial Average advanced +207.53 points (1.67%) to 12650.36 points. The index high for the day was 12702.38, set at 3:45 p.m. - whereupon the Dow plunged 100 points in ten minutes. The low was 12249.93, and happened in the first fifteen minutes of trade. So the Dow had a 450 point range for no reason whatsoever.
Top Dow Gainers
- Mcdonalds (MCD) rose 2.47 (4.84%) to 53.48 on volume of 17.3 million units
- Home Depot (HD) rose 1.26 (4.29%) to 30.64 on volume of 30 million units
- American Express (AXP) rose 1.85 (3.91%) to 49.19 on volume of 13.8 million units
- Caterpillar (CAT) rose 2.64 (3.86%) to 71.08 on volume of 7.8 million units
- Wal Mart Stores (WMT) rose 1.61 (3.28%) to 50.77 on volume of 42.2 million units
Dow Decliners (just the two)
- Altria Group (MO) fell -0.733 (-0.96%) to 75.77 on volume of 14.7 million units
- Merck (MRK) fell -0.34 (-0.73%) to 46.35 on volume of 22.2 million units
Most Traded Dow stocks were
- Citigroup (C) +0.6101 (2.21%) to 28.17 on volume of 128.4 million units
- Microsoft (MSFT) +0.40 (1.24%) to 32.6 on volume of 101.3 million units
- Intel (INTC) +0.41 (1.98%) to 21.1 on volume of 98.7 million units
- JPMorganChase (JPM) +0.05 (0.11%) to 47.4 on volume of 52.9 million units
- General Electric (GE) +0.4242 (1.21%) to 35.36 on volume of 52.1 million units
The S&P500 Index advanced +22.74 points (1.68%) to 1378.55 points. The index high for the day was 1385.60, while the low was 1334.08.
The Nasdaq Composite advanced +40.86 points (1.74%) to 2389.86 points. The index high for the day was 2403.46, while the low was 2313.52.
The Nasdaq100 advanced +32.91 points (1.82%) to 1841.42 points. The index high for the day was 1853.81, while the low was 1782.02.
The CBOE Volatiity Index lost 1.41 points (5.1%) to 26.21 points, while the CBOE Nasdaq100 Volatilty Index lost 0.72 points (2.26%) to 31.08 points.
NYSE Total Volume totalled 5.29billion units.
Nasdaq Total Volume totalled 2.9billion units.
| Major Market Statistics | |||
| Index | Close | Gain(Loss) | % |
| Dow Jones Industrial Average | 12650.36 | +207.53 | 1.67% |
| S&P500 Index | 1378.55 | +22.74 | 1.68% |
| Nasdaq Composite | 2389.86 | +40.86 | 1.74% |
| Nasdaq100 | 1841.42 | +32.91 | 1.82% |
| CBOE Volatiity Index | 26.21 | -1.41 | -5.1% |
| CBOE Nasdaq100 Volatilty Index | 31.08 | -0.72 | -2.26% |
| NYSE Total Volume | 5.29bn | - | - |
| Nasdaq Total Volume | 2.9bn | - | - |
Precious Metals
Precious metals futures advanced as follows -
| Precious Metal Futures | |||
| Index | Close | Gain(Loss) | % |
| Gold | 925.9 | +5.3 | 0.58 |
| Silver | 1699.0 | +23.0 | 1.37 |
| High Grade Copper | 329.50 | +6.85 | 2.12 |
| Platinum | 1744.0 | +56.6 | 3.35 |
| Palladium | 393.35 | +2.55 | 0.65 |
The Gold Bugs Index lost 3.04 (1.63%) to 186.30 points. Index volume totalled 93.8 million shares. Of the 16 index components, 3 advanced, with volume in advancers totalling 23.1 million units. The remaining 13 stocks in the index fell, with total volume traded of 70.7 million shares.
Major movers in the same direction as the index:
- Silver Wheaton Co (SLW), down 0.91 (5.58%) to $15.39 on volume of 4.4 million shares
- Goldcorp Inc (GG), down 1.51 (3.9%) to $37.23 on volume of 10 million shares
- Pan Amer Silver C (PAAS), down 1.35 (3.59%) to $36.23 on volume of 1.6 million shares
- Barrick Gold Cp (ABX), down 1.82 (3.42%) to $51.41 on volume of 13.9 million shares
Energy Complex
Energy futures performed as follows -
| Energy Futures | |||
| Index | Close | Gain(Loss) | % |
| Crude Oil | 91.52 | -0.81 | -0.88 |
| Heating Oil | 2.5228 | -0.0196 | -0.77 |
| Gasoline RBOB | 2.2950 | -0.0390 | -1.67 |
| Natural Gas | 8.059 | +0.014 | 0.17 |
| Ethanol | 2.195 | +0.015 | 0.69 |
The Oil Services Index lost 3.9 (1.54%) to 252.81 points. Index volume totalled 119.9 million shares. Of the 15 index components, 6 advanced, with volume in advancers totalling 33.5 million units. Every other stock fell, with total volume traded of 86.5 million shares.
Major movers in the same direction as the index:
- Cameron Intl Cp (CAM), down 2.96 (6.87%) to $40.10 on volume of 14.7 million shares
- Natl Oilwell Varc (NOV), down 3.9 (6.11%) to $59.90 on volume of 10 million shares
- Baker Hughes Intl (BHI), down 2.3 (3.43%) to $64.84 on volume of 10.2 million shares
- Oceaneering Intl (OII), down 1.92 (3.23%) to $57.58 on volume of 983.2 thousand shares
Bellwethers
The nine-stock group that makes up the Rant bellwethers advanced on average by 3.4%. The fallout occurred as follows:
- General Electric (GE) up $+0.4242 (1.21%) to $35.36 on volume of 52.09 million units.
- Citigroup (C) up $+0.6101 (2.21%) to $28.17 on volume of 128.37 million units.
- Wal-Mart (WMT) up $+1.61 (3.28%) to $50.77 on volume of 42.2 million units.
- IBM (IBM) up $+1.46 (1.38%) to $107.11 on volume of 8.45 million units.
- Intel (INTC) up $+0.41 (1.98%) to $21.10 on volume of 98.73 million units.
- Cisco Systems (CSCO) up $+0.14 (0.57%) to $24.50 on volume of 75.22 million units.
- Google (GOOG) up $+16.03 (2.92%) to $564.30 on volume of 12.8 million units.
- Fannie Mae (FNM) up $+2.65 (8.51%) to $33.78 on volume of 19.45 million units.
- Freddie Mac (FRE) up $+2.49 (8.92%) to $30.39 on volume of 15.61 million units.
Currencies
| Currency Futures | |||
| Index | Close | Gain(Loss) | % |
| U.S. Dollar Index | 75.285 | +0.145 | 0.19 |
| British Pound | 1.9848 | -0.0038 | -0.19 |
| Canadian Dollar | 0.9951 | -0.0158 | -1.56 |
| Japanese Yen | 0.9425 | +0.0043 | 0.46 |
| Swiss Franc | 0.9256 | +0.0035 | 0.38 |
| Euro FX | 1.4859 | -0.0020 | -0.13 |
| Australian Dollar | 0.8928 | -0.0023 | -0.26 |
Other Indices of Interest...
The Banks Index added 3.24 (3.43%) to 94.39 points. Index volume totalled 549.2 million shares. Of the 24 index components, 23 advanced, with volume in advancers totalling 531.1 million units.
Major movers in the same direction as the index:
- People's United F (PBCT), up 1.17 (7.44%) to $16.89 on volume of 8.4 million shares
- Washington Mutual (WM), up 1.2 (6.43%) to $19.85 on volume of 52.8 million shares
- New M&i Corporati (MI), up 1.62 (6.2%) to $27.74 on volume of 5.6 million shares
- Capital One Finan (COF), up 3.06 (5.93%) to $54.66 on volume of 14.8 million shares
The Semiconductor Index added 0.19 (0.05%) to 359.00 points. Index volume totalled 272.6 million shares. Of the 18 index components, 9 advanced, with volume in advancers totalling 167.6 million units. Of the remaining 9 stocks in the index, 7 fell, with total volume traded of 72 million shares.
Major movers in the same direction as the index:
- Taiwan Semicond A (TSM), up 0.36 (4.05%) to $9.25 on volume of 20.1 million shares
- Infineon Tech Ads (IFX), up 0.2 (1.99%) to $10.24 on volume of 3.6 million shares
- Intel Cp (INTC), up 0.41 (1.98%) to $21.10 on volume of 98.7 million shares
- Novellus Systems (NVLS), up 0.35 (1.5%) to $23.76 on volume of 5.4 million shares
The ChildKiller ("Defence") Index added 7.21 (1.91%) to 377.35 points. Index volume totalled 86.4 million shares. Of the 17 index components, 16 advanced, with volume in advancers totalling 83.3 million units.
Major movers in the same direction as the index:
- Gencorp Inc (GY), up 0.82 (7.51%) to $11.74 on volume of 629.4 thousand shares
- Esterline Tech Cp (ESL), up 1.69 (3.77%) to $46.50 on volume of 226.1 thousand shares
- Alliant Tech Sys (ATK), up 3.51 (3.43%) to $105.85 on volume of 663.7 thousand shares
- Raytheon Co (new) (RTN), up 1.71 (2.7%) to $65.14 on volume of 4.7 million shares
