Interdum stultus opportuna loquitur...

Thursday, January 10, 2008

USRant: Yet Another Surge...

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Now this habit of inexplicable 200-odd point surges that start from nowhere, is beginning to get on my nerves (in fact, today from low to high was just on 300 points, but it took almost all day).

Its' still not going to get the index to a gain for the week. It's just annoying to think that the people doing it, are doing it on behalf of the US government, and the  US is (notionally) not a centrally-planned economy (after all, we in the West transferred trillions of dollars to the Death Industry, and killed millions of innocent Asian civilians, to prevent them from experimenting with central planning).  

Anyhow... so we now know that the President's Working Group on Markets (a.k.a. the PPT) has had its purview extended. That just means they will intervene between now and the election in order to try and hold the markets up for the supposedly-free-marketeer Republicans,

New Jobless Claims were lower than expected, with 322,000 new filings for jobless benefits; the cognoscenti had expected 340,000. Wholesale Trade figures for the month (of December) were not bad - showing an increase of 0.6% month on month. Apart from those tow reports, there were three Treasury auctions, none of which were very interesting.

Oddly enough, the bond market started behaving as if it expected inflation as a result of Helichopper Ben Bernanke's speech in the afternoon. Well, I say "oddly enough", but as I mentioned last week,m the bond market was setting up for a savaging this week. It started later than I expected, and from a higher level (spiking all the way to the high 118s yesterday) but I still expect the 30-year to fall below 117 tomorrow.

Fed Open Market Operations

The Fed did three repurchases today:

  • a $9 billion, 14 day repurchase with $2.5 billion in T-backed, struck at 4.02%;
  • a $9 billion, 7-day repurchase with $5.122 billion in T-backed, struck at 4.06%; and
  • a $6 billion overnight repurchase with 2.655 billion in T-backed, struck at 4.19%.

At the end of the day, although it represents a lot of money, the longer-dated stuff is rollovers of previous repos; the overnight repo did not have enough in T-backed to give free grease to da Boyz.

Index Performance

After opening weak (dropping 103 points in the opening minutes) the the Dow Jones Industrial Average rallied in a fairly consistent (if volatile) manner for all but the first five minutes of trade. The dip took the index to a low of 12632 at about 5 minutes past 10 NY time, but by the close it was showing a gain of  117.78 points (0.92%), closing at 12853.09 points

Of the 30 Dow stocks, 24 rose, with total volume in gainers totalling around 584 million units; losing Dow stocks numbered 6, with a total volume traded in decliners of 210.87million units

The S&P500 rose 11.2 points (0.79%), closing at 1420.33 points; techland was far less ebullient, with the Nasdaq Composite up 13.97 points (0.56%), closing at 2488.52 points. the laggard of the major indices was the Nasdaq100 which rose a lousy 4.44 points (0.26%), closing at 1953.64 points

Market Internals

NYSE Total Volume totalled 5.08 billion units; Up Volume was 3.89 billion units (in 22231 stocks which rose for the day). Down volume for the 1105 losers totalled 1.16 billion shares. 48 NYSE listed stocks made new 52-week highs, and 216 hit new lows. 

Total Volume on the Nasdaq market was 2.59 billion units, with the 1802 gainers trading a total of 1.67 billion shares. The decliners, by contrast numbered 1211 and traded a total of 840 million shares. only 63 Nasdaq stocks made new 52-week highs, and 313 made new 52-week lows.

Bonds... Toot toot...

The 30 Year T-Bond (ZBH8) dropped over a point to 117 18/32. This was easy to forecast, but frankly I didn't bank on the spike high yesterday to the high 118s. Still, the decline in bonds is not over.

Precious Metals

Front-month Gold (GCG8) rose 12.70 (1.44)% to $894.40 per ounce. it hit a high of $897.30 during the session - another intraday record - before retreating a little late in the day.

The Silver (SIH8) rose 0.45 (2.84)% to $16.29 an ounce.

Crude Oil

The Crude Oil (CLG8) fell another $1.67 (1.75$) to $94.00 a barrel; the smell of scorched nuffnuff continues to fill the air. Not long now until the thing reverses up and explodes through $100 like it's not there: probably next week after another lurch downward.


The U.S. Dollar Index (DXH8) fell 0.46 (0.6%) to 76 - there is some real effort being expended to keep the USD index above the mid-75s, where gravity could get hold of it..

The British Pound (BPH8) rose 0.0033 (0.17%) to 1.9561; looks good until you realise it is a historic low against the Euro.

The Euro (ECH8) rose 0.0129 (0.88%) to 1.4791.

The Australian Dollar (ADH8) rose 0.0154 (1.76%) to 0.8915. Are we looking AUD-USD parity down the barrel?