Note - from June 24th 2009, this blog has migrated from Blogger to a self-hosted version. Click here to go straight there.
Note - the 'full bottle' USRant is still not operational - there is no discussion of Bond markets yet - it's done, but needs testing for a day or so).
Well, the moonshot in Financials continued apace - at least for the first few hours of the session.
Today's fairy tale is that everything is just hunky-dory because JPMorganChase 'beat the number'. Leave aside that 'the number' had been hacked to death recently, and that JPMs share price ignores all the toxic sludge it is still hiding off-balance-sheet... so long as there is no last minute revelation that the CEO had morphed into a radioactive lizard and started rampaging through the streets of Manhattan, it's a good day for Financials.
Plus, for anybody who can look at a chart, you will see that the current explosion upwards has actually been driven by short covering - you don't get 150-point Dow moves in 45 minutes as a result of buyers, you get that sort of move when shorts have their goolies in a vice. Dollars will get you donuts that this weeks CoT shows a big reduction in small spec long positions in Oil and Platinum, and small spec shorts in the S&P and the Nasdaq100. (Of course I hasten to add that despite being a bear I was very specific about moving to the long side - just for a trade - two days ago within 4 points of what will end up being a very temporary swing bottom, Yay for me.)
Economic News
A moderately interesting dance-card as far as EcoData was concerned... as with JPMorganChase 'beating (dramatically lowered) expectations', the economic data is likewise having the hurdle dropped so low that a crippled sea-cucumber could get over it (the hurdle, I mean)
- Building Permits for June rose to 1.1million, exceeding the 965k consensus and handily above the prior month's 978k. That said, the number for June is roughly half the number from early 2005. Likewise, Housing Starts for June rose to 1.07m, well above the 960k consensus and the revised 977k figure for May. Again, compared with June a year ago, the current figure represents a 30-odd percent decline. But it's a month on month plus, and it beat expectations (which are now being lowballed so badly that you would be forgiven for thinking that they were forming expectations about Bush's academic performance).
- Initial Jobless Claims for the week ending July 12th showed a sharp increase to 366k from the prior week's 348k... but the outcome was below those lower-than-low expectations (which were supposedly looking for a read on of 380k); and finally
- The Philadelphia Fed Index for June came in at -16.3, well below the consensus guess of -15 (but better than the prior reading of -17.1).
What to make of it all? Well, first start from the premise that wherever you are on our little blue-green ball of rock, government lies like a flatfish. Take it from there. Bad as these numbers are, they are doubtless massaged to within an inch of their lives - subjected to enhanced interrogation techniques, if you will. I have no doubt that in the fullness of time we will discover that the unreliability of US government stats is not limited to
- hedonic adjustment of GDP and the CPI
- substitution effects and chain linking in almost all price indices,
- concentration on 'core' inflation,
- the CES Birth-Death Phantom Worker Generator
- and the various other statistical chicaneries perpetrated by the US government (and copied by governments everywhere)
And we now find that recent work shows that there is a life expectancy gap between rich and poor in the US, of thirty years. I doubt that you would have seen a disparity like that in pre-Revolutionary France, or even in England at the time of Marx's 'satanic mills'; it is genuinely staggering, when you consider that government is supposed to exist to ameliorate the failure of the market to adequately provide for the poor and huddled masses. Thirty years? Thirty years? You would be hard pressed to find that sort of gap in any third world dictatorship - and in such a case it would be something used to shame the government.
And if you think that's bad, then consider the difference in life expectancy between Asian-American males and African-American males... a life expectancy gap of FIFTY years.
Now do not think that I favour some sort of socialised intervention to put this sort of thing to right, Dear Reader; not a bit of it. But it shows perfectly, that for an economy with the same Tax to GDP ratio as Australia, the US government has got its priorities completely back-asswards; rather than performing such functions as are economically justifiable (basic healthcare, basic welfare, basic education and territorial defence), the US government is all about funnelling tax money to political cronies, and leaving taxpayers with an increasing tab to pass to unborn generations. It's easy to look rich when you get to spend roughly 7% more than you earn...
Fed Open Market Operations
The Fed's Open Market Operations desk performed 3 repurchase operations:
- a 1-day repurchase totalling $10.75bn, with none of it in Treasury-backed collateral;
- a 7-day repurchase totalling $7bn, all of it in Treasury-backed collateral, with a weighted average rate of 1.964%;
- a 14-day repurchase totalling $5bn, with not a skerrick in Treasury-backed collateral.
Headline Indices
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The Dow Jones Industrial Average advanced 207.38 points (1.85%) to 11446.66 points. The index high for the day was 11446.66, while the low was 11209.56.
Of the 30 Down components, 23 gained ground for the day, with total upside volume of 1.06bn units. 6 Dow components suffered losses for the day, with total volume in declining index components of 142.61m units.
The S&P500 Index advanced 14.95 points (1.2%) to 1260.31 points.
The Nasdaq Composite advanced 27.45 points (1.2%) to 2312.30 points and the Nasdaq100 advanced 9.60 points (0.52%) to 1853.47 points. Interesting - really not very much enthusiasm outside NYSE listed Financials...
The CBOE Volatility Index lost 0.09 points (0.36%) to 25.01 points. The CBOE Nasdaq100 Volatility Index lost 0.29 points (0.96%) to 29.84 points. The index high for the day was 30.66, while the low was 28.70.
A Total of 3490 issues traded today on the NYSE; today's total volume was 2.56 billion shares. A total of 2503 counters posted gains for the day, with aggregate volume of 663m shares trading to the upside. Exerting downwards pressure on the index were the 929 losers, which accounted for a total volume of 1.75 billion shares according to my data feed. (Note - that looks like a data stuffup - a nearly 3:1 tilt toward LOSERs? Doubt it).
31 stocks made new 1-year highs on the NYSE, while 145 shares plumbed new 52-week depths.
Over on the Nasdaq 3039 tickers traded today; total Nasdaq volume was 2.63 billion shares. A total of 1993 stocks posted gains for the day, with aggregate volume of 1.97 billion shares trading to the upside. The red zone of the Nasdaq exchange was populated with 932 losers, which accounted for a total volume of 647.2 million shares.
58 Nasdaq-listed stocks hit new 52-week highs, while 126 shares dipped to new 1-year lows.
| Major Market Statistics | |||
| Index | Close | Gain(Loss) | % |
| Dow Jones Industrial Average | 11446.66 | +207.38 | 1.85% |
| S&P500 Index | 1260.31 | +14.95 | 1.2% |
| Nasdaq Composite | 2312.30 | +27.45 | 1.2% |
| Nasdaq100 | 1853.47 | +9.60 | 0.52% |
| CBOE Volatility Index | 25.01 | -0.09 | -0.36% |
| CBOE Nasdaq100 Volatility Index | 29.84 | -0.29 | -0.96% |
| NYSE Total Volume | 2.56bn | - | - |
| Nasdaq Total Volume | 2.63bn | - | - |
Major Advancers in the Dow were
- Bank Of America (BAC) +3.83 (16.9%) to $26.5 on volume of 186.8m units
- JPMorganChase (JPM) +4.86 (13.5%) to $40.8 on volume of 111.8m units
- General Motors (GM) +1.37 (11.9%) to $12.85 on volume of 43m units
- Citigroup (C) +1.5 (9.1%) to $17.97 on volume of 193.4m units
- AIG (AIG) +1.64 (7%) to $24.92 on volume of 45.2m units
Major Decliners in the Dow were
- Coca-Cola (KO) -2 (3.8%) to $50.34 on volume of 22.2m units
- Alcoa (AA) -1.04 (3%) to $33.74 on volume of 19.9m units
- Chevron (CVX) -0.72 (0.8%) to $85.67 on volume of 20.3m units
- Johnson & Johnson (JNJ) -0.42 (0.6%) to $67.77 on volume of 9.3m units
- Exxon-Mobil (XOM) -0.48 (0.6%) to $80.33 on volume of 38.5m units
Most Traded Dow stocks were
- Citigroup (C) +1.5 (9.1%) to $17.97 on volume of 193.4m units
- Bank Of America (BAC) +3.83 (16.9%) to $26.5 on volume of 186.8m units
- JPMorganChase (JPM) +4.86 (13.5%) to $40.8 on volume of 111.8m units
- Intel (INTC) +1.08 (5.2%) to $21.99 on volume of 93.4m units
- Microsoft (MSFT) +0.26 (1%) to $27.52 on volume of 91.7m units
Precious Metals
Precious metals futures advanced as follows -
| Precious Metals Futures | |||
| Index | Close | Gain(Loss) | % |
| Gold | 956.2 | -6.5 | -0.68 |
| Silver | 18.52 | -0.285 | -1.52 |
| Palladium | 424 | -8.1 | -1.87 |
| Platinum | 1888 | -50.4 | -2.6 |
The Gold Bugs index (XAU) contains 16 components; the total volume traded in the index was 53.06m units. Within the index, 2 issues rose, with aggregate volume of 2.62m units; 14 issues fell, with aggregate volume of 50.44m units. Today the index fell by 3.81 points (2%) to 186.97 points. The main decliners (in percentage terms) were -
- Agnico Eagle Mines (AEM) -3.53 (4.8%) to $69.46 on volume of 2m shares;
- Newmont Mining (NEM) -1.94 (3.9%) to $47.7 on volume of 5.83m shares;
- GoldCorp (GG) -1.53 (3.3%) to $45.54 on volume of 6.42m shares;
- Freeport McMoran (FCX) -1.98 (2%) to $99.45 on volume of 5.6m shares;
- Barrick Gold (ABX) -0.9 (1.9%) to $47.5 on volume of 5.68m shares;
Energy Complex
Energy futures performed as follows -
| Energy Futures | |||
| Commodity | Close | Gain(Loss) | % |
| Crude Oil | 129.82 | -4.78 | -3.55 |
| Heating Oil | 3.751 | -0.09 | -2.34 |
| Natural Gas | 10.595 | -0.803 | -7.05 |
| Gasoline RBOB | 3.1781 | -0.1013 | -3.09 |
| Ethanol | 2.51 | -0.081 | -3.13 |
The Oil Services index (OSX) contains 15 components; the total volume traded in the index was 69.93m units. Within the index, 4 issues rose, with aggregate volume of 14.8m units; 11 issues fell, with aggregate volume of 55.13m units. Today the index fell by 2.69 points (0.84%) to 315.77 points. The main decliners (in percentage terms) were -
- BJ Services (BJS) -1.32 (4.6%) to $27.44 on volume of 6.53m shares;
- Global Industries (GLBL) -0.61 (4.4%) to $13.36 on volume of 3.89m shares;
- Nabors Industries (NBR) -1.8 (4.1%) to $41.75 on volume of 5.81m shares;
- National Oilwell Varco (NOV) -3.03 (3.8%) to $76.5 on volume of 5.08m shares;
- Rowan Co (RDC) -0.95 (2.3%) to $40.72 on volume of 2.2m shares;
Bellwethers
The nine-stock group that makes up the Rant bellwethers advanced on average by 6.5%. The fallout occurred as follows:
- General Electric (GE) +0.32 (1.16%) to $28.00 on volume of 73.02m units.
- Citigroup (C) +1.50 (9.11%) to $17.97 on volume of 193.43m units.
- Wal-Mart (WMT) +0.72 (1.26%) to $57.68 on volume of 12.43m units.
- IBM (IBM) +0.58 (0.46%) to $126.52 on volume of 11.6m units.
- Intel (INTC) +1.08 (5.16%) to $21.99 on volume of 93.41m units.
- Cisco Systems (CSCO) +0.42 (1.99%) to $21.52 on volume of 64.31m units.
- Google (GOOG) -2.16 (0.4%) to $533.44 on volume of 6.84m units.
- Fannie Mae (FNM) +1.68 (18.16%) to $10.93 on volume of 140.53m units.
- Freddie Mac (FRE) +1.50 (21.96%) to $8.33 on volume of 163.18m units.
Other Indices of Interest...
The Semiconductor index (SOX) contains 18 components; the total volume traded in the index was 301.42m units. Within the index, 14 issues rose, with aggregate volume of 231.07m units; 4 issues fell, with aggregate volume of 70.36m units. Today the index rose by 8.3 points (2.31%) to 368.38 points. Contributing tho the advance were -- Infineon Tech (IFX) +0.83 (11.5%) to $8.05 on volume of 4.42m shares;
- ST Microelectronic (STM) +0.74 (7%) to $11.35 on volume of 2.57m shares;
- Intel (INTC) +1.08 (5.2%) to $21.99 on volume of 92.61m shares;
- Intel (INTC) +1.08 (5.2%) to $21.99 on volume of 92.61m shares;
- Taiwan Semiconductor (TSM) +0.5 (5.1%) to $10.36 on volume of 15.9m shares;
- United Technologies (UTX) +3.59 (5.9%) to $64.7 on volume of 7.34m shares;
- United Technologies (UTX) +3.59 (5.9%) to $64.7 on volume of 7.34m shares;
- FLIRr Systems (FLIR) +1.91 (4.5%) to $44.36 on volume of 1.69m shares;
- Boeing (BA) +1.34 (2%) to $66.92 on volume of 3.24m shares;
- Boeing (BA) +1.34 (2%) to $66.92 on volume of 3.24m shares;
Currency Futures
Currency futures performed as follows -
| Currency Futures | |||
| Index | Close | Gain(Loss) | % |
| U.S. Dollar Index | 72.395 | 0.06 | 0.08 |
| Euro FX | 1.577 | 0.0011 | 0.07 |
| Swiss Franc | 0.9779 | -0.0052 | -0.53 |
| Australian Dollar | 0.9627 | -0.0028 | -0.29 |
| Canadian Dollar | 0.9927 | -0.0051 | -0.51 |
| Japanese Yen | 0.9403 | -0.0158 | -1.65 |
| New Zealand Dollar | 0.7546 | -0.0095 | -1.24 |
