Note - from June 24th 2009, this blog has migrated from Blogger to a self-hosted version. Click here to go straight there.
Well, that's interesting - a Monday with little or no adverse news, in which the US markets failed to gain traction. 15 minutes into the session the Dow was up a little over 50 points, and from there it sagged 110 points in a little over two hours.
Well, I say little or no adverse news, but one piece sufficed if you're a drugmanker - the Vytorin story weighed on drugmakers Merck and Schering Plough after the common cholesterol drug was found to be basically ineffective when you need it (i.e., to prevent the adverse effects of cholesterol in heart valve disease). To add insult to injury (especially for the poor schlubs who have shelled out for the drug), it was also linked to cancer. It could have been worse - it could have been another Vioxx. Seems like Big Pharma will have to bribe its way out of yet another shitstorm... par for the course.
It's starting to dawn on people that the economic situation in the US is not going to be fixed by the usual method of opening the monetary spigot - finally people are starting to connect the dots between monetary slackness and the cratering US dollar... and between US dollar weakness and a reduced willingness of foreign holders of US Treasury bonds to maintain their rate of purchase of US government debt.
You see, that's the problem; the US is not just in trouble if foreigners start to sell US Treasuries - the US is in trouble if foreigners reduce the rate of growth of their purchases of US treasuries. Any slackening in the growth of demand for US debt will lead to a rise in interest rates along the market-determined section of the curve (the 6-month to 30-year strip). With inflation starting to be impossible to hide in the US's much manipulated statistics, bondholders are not going to want to add to a bad hand (current yields demand that holders of a 30-year bond receive 3% per annum LESS than the current massaged inflation data... madness).
Also it seems that folks are awake to the idea that Fannie and Freddie can't be saved by either the Fed or the Treasury. It is not a problem of short term cash flow - being given liquidity to get through a rough patch. The longer the two GSEs operate the worse it gets, because it is a problem of balance sheet distress so large that the Fed does not have enough assets on its OWN balance sheet to enable a repair of the balance sheets of FNM and FRE. (The Fed has already used almost 50% of its assets in shoring up the US financial sector)
And this reinforces what I have been saying to all those who claim that the US is 'wealthy' simply because its per capita expenditure is among the highest in the developed world: if you can get access to debt you can expend more than you produce... but it doesn't make you rich; in the longer run it makes you BROKE.
Economic News
The only economic data released today were the Conference Board's Leading Economic Indicators Index, which showed a 0.1% decline - but was still better than the consensus guess which expected a 0.3% decline. No matter, the LEI is not correlated with future activity (except when they periodically rebalance the index weights to make it match history... any idiot can do that).
Fed Open Market Operations
Insert material here
The Fed's Open Market Operations desk performed a single repurchases today - a 1 Day repurchase totalling $ 8.75bn, with $5.58bn in Treasury-backed collateral. The repo was undertaken at a weighted average rate of 1.926%, i.e., at a 7.4 basis point discount to Fed Funds.
Headline Indices
Insert material here
The Dow Jones Industrial Average lost 29.23 points (0.25%) to 11467.34 points. The index high for the day was 11559.67, while the low was 11423.94. the total volume traded in the index was 602.84m units. Within the index, 8 issues rose, with aggregate volume of 272.56m units; 21 issues fell, with aggregate volume of 286.66m units.
The main decliners (in percentage terms) were -
- Merck (MRK) -2.35 (6.2%) to $35.33 on volume of 31.39m shares;
- JPMorganChase (JPM) -1.37 (3.4%) to $38.65 on volume of 21.19m shares;
- American Express (AXP) -1.29 (3.1%) to $40.9 on volume of 11.67m shares;
- Home Depot (HD) -0.32 (1.4%) to $23.12 on volume of 7.58m shares; and
- Disney Corp (DIS) -0.41 (1.3%) to $30.49 on volume of 4.88m shares.
The S&P500 Index barely changed, falling 0.68 points (0.05%) to 1260.00 points. Within the index, 212 issues rose, with aggregate volume of 1124.31m units; 277 issues fell, with aggregate volume of 1417.6m units; the total volume traded in the index was 2595.78m units. The main decliners (in percentage terms) were -
- Schering-Plough (SGP) -2.49 (11.6%) to $18.95 on volume of 57.98m shares;
- Legg Mason (LM) -3.28 (9.2%) to $32.31 on volume of 2.68m shares;
- CIT Group (CIT) -0.77 (8.8%) to $7.97 on volume of 5.38m shares;
- XL Capital (XL) -1.7 (8.6%) to $18.18 on volume of 2.71m shares; and
- Washington Mutual (WM) -0.44 (7.4%) to $5.48 on volume of 50.18m shares.
The Nasdaq Composite lost 3.25 points (0.14%) to 2279.53 points and the Nasdaq100 lost 3.47 points (0.19%) to 1819.76 points. Within the index, 39 issues rose, with aggregate volume of 302.58m units; 60 issues fell, with aggregate volume of 428.73m units.
- UAL (UAUA) -0.46 (8.4%) to $4.99 on volume of 10.66m shares;
- Autodesk (ADSK) -1.76 (4.9%) to $34.25 on volume of 3.9m shares;
- Expeditors International of Washington (EXPD) -2.08 (4.7%) to $42.13 on volume of 2.91m shares;
- Broadcom (BRCM) -1.35 (4.7%) to $27.44 on volume of 16.31m shares; and
- Cadence Design Systems (CDNS) -0.48 (4.7%) to $9.83 on volume of 5.16m shares.
The CBOE Volatility Index lost 0.89 points (3.7%) to 23.16 points and the CBOE Nasdaq100 Volatility Index lost 0.66 points (2.16%) to 29.83 points
A Total of 3465 issues traded today on the NYSE; today's total volume was 2.71 billion shares. A total of 2154 counters posted gains for the day, with aggregate volume of 1.43 billion shares trading to the upside. Exerting downwards pressure on the index were the 1227 losers, which accounted for a total volume of 1.26 billion shares. 20 stocks made new 1-year highs on the NYSE, while 99 shares plumbed new 52-week depths.Over on the Nasdaq 3014 tickers traded today; total Nasdaq volume was 1.79 billion shares. A total of 1604 stocks posted gains for the day, with aggregate volume of 0.85 billion shares trading to the upside. The red zone of the Nasdaq exchange was populated with 1286 losers, which accounted for a total volume of 0.87 billion shares. 48 Nasdaq-listed stocks hit new 52-week highs, while 88 shares dipped to new 1-year lows.
| Major Market Statistics | |||
| Index | Close | Gain(Loss) | % |
| Dow Jones Industrial Average | 11467.34 | -29.23 | -0.25% |
| S&P500 Index | 1260.00 | -0.68 | -0.05% |
| Nasdaq Composite | 2279.53 | -3.25 | -0.14% |
| Nasdaq100 | 1819.76 | -3.47 | -0.19% |
| CBOE Volatility Index | 23.16 | -0.89 | -3.7% |
| CBOE Nasdaq100 Volatility Index | 29.83 | -0.66 | -2.16% |
Precious Metals
Precious metals futures advanced en bloc, although Platinum was still significantly weaker than the rest of the complex -
| Precious Metals Futures | |||
| Index | Close | Gain(Loss) | % |
| Gold | 965.2 | 7.2 | 0.75 |
| Silver | 18.49 | 0.29 | 1.59 |
| Palladium | 418.2 | 1.6 | 0.38 |
| Platinum | 1855.9 | 0.6 | 0.03 |
The Gold Bugs index (XAU) contains 16 components; the total volume traded in the index was 38.98m units. Within the index, 14 issues rose, with aggregate volume of 31.78m units; 2 issues fell, with aggregate volume of 7.21m units.
Today the index rose by 4.26 points (2.27%) to 192.18 points. Contributing to the advance were -
- Royal Gold (RGLD) +2.38 (6.8%) to $37.55 on volume of 0.77m shares;
- Pan-American Silver (PAAS) +2.22 (6.7%) to $35.36 on volume of 1.16m shares;
- Kinroos Gold (KGC) +0.91 (4%) to $23.58 on volume of 2.27m shares;
- Freeport McMoran (FCX) +3.77 (3.7%) to $107.01 on volume of 3.69m shares; and
- Yamana Gold (AUY) +0.46 (3.3%) to $14.43 on volume of 4.09m shares.
Energy Complex
On the whole the Energy complex advanced, with Crude and its primary derivatives (Heating Oil and Gasoline) up roughly 2% -
| Energy Futures | |||
| Commodity | Close | Gain(Loss) | % |
| Crude Oil | 132.45 | 2.98 | 2.3 |
| Heating Oil | 3.7949 | 0.0724 | 1.94 |
| Natural Gas | 10.551 | -0.019 | -0.18 |
| Gasoline RBOB | 3.2303 | 0.0594 | 1.87 |
| Ethanol | 2.373 | -0.044 | -1.82 |
The Oil Services index (OSX) contains 15 components; the total volume traded in the index was 53.53m units. Within the index, 15 issues rose, with aggregate volume of 53.53m units; 0 issues fell, with aggregate volume of 0m units.
Today the index rose by 11.54 points (3.57%) to 334.75 points. Contributing to the advance were -
- Schlumberger (SLB) +5.53 (5.5%) to $106.08 on volume of 6.55m shares;
- Rowan Co (RDC) +2.33 (5.5%) to $44.88 on volume of 2.36m shares;
- BJ Services (BJS) +1.46 (5.1%) to $30.01 on volume of 3.73m shares;
- National Oilwell Varco (NOV) +3.72 (4.7%) to $82.67 on volume of 2.68m shares; and
- Cameron International (CAM) +2.2 (4.2%) to $54.11 on volume of 1.44m shares.
Bellwethers
The nine-stock group that makes up the Rant bellwethers declined on average by 0.3%. The fallout occurred as follows:
- General Electric (GE) -0.31 (1.11%) to $27.69 on volume of 25.35m units.
- Citigroup (C) +0.34 (1.76%) to $19.69 on volume of 60.26m units.
- Wal-Mart (WMT) -0.61 (1.05%) to $57.31 on volume of 7.53m units.
- IBM (IBM) -1.23 (0.95%) to $128.66 on volume of 4.35m units.
- Intel (INTC) -0 (0%) to $22.09 on volume of 43.62m units.
- Cisco Systems (CSCO) +0.18 (0.83%) to $21.84 on volume of 44.09m units.
- Google (GOOG) -12.52 (2.6%) to $468.80 on volume of 5.84m units.
- Fannie Mae (FNM) +0.73 (5.45%) to $14.13 on volume of 77.41m units.
- Freddie Mac (FRE) -0.43 (4.68%) to $8.75 on volume of 72.24m units.
Other Indices of Interest...
The Banks index (BKX) contains 24 components; the total volume traded in the index was 557.79m units. Within the index, 8 issues rose, with aggregate volume of 326.24m units; 16 issues fell, with aggregate volume of 231.55m units.
Today the index fell by 0.64 points (1.02%) to 62.14 points. The main decliners (in percentage terms) were -
- Washington Mutual (WM) -0.44 (7.4%) to $5.48 on volume of 50.18m shares;
- Comerica Inc (CMA) -1.47 (5.1%) to $27.5 on volume of 2.75m shares;
- US Bancorp (USB) -1.14 (4%) to $27.25 on volume of 13.06m shares;
- JPMorganChase (JPM) -1.37 (3.4%) to $38.65 on volume of 21.19m shares; and
- National City (NCC) -0.14 (3.1%) to $4.4 on volume of 11.09m shares.
The Semiconductor index (SOX) contains 18 components; the total volume traded in the index was 178.98m units. Within the index, 3 issues rose, with aggregate volume of 22.46m units; 14 issues fell, with aggregate volume of 112.9m units.
Today the index fell by 4 points (1.09%) to 361.87 points. The main decliners (in percentage terms) were -
- Broadcom (BRCM) -1.35 (4.7%) to $27.44 on volume of 16.31m shares;
- Marvell Technology (MRVL) -0.47 (3%) to $15.08 on volume of 10.5m shares;
- Applied Materials (AMAT) -0.47 (2.6%) to $17.81 on volume of 28.24m shares;
- Xilinx (XLNX) -0.41 (1.7%) to $23.95 on volume of 6.52m shares; and
- Altera (ALTR) -0.33 (1.5%) to $21.19 on volume of 8.5m shares.
The ChildKiller ("Defence") index (DFX) contains 17 components; the total volume traded in the index was 40.91m units. Within the index, 8 issues rose, with aggregate volume of 7.75m units; 8 issues fell, with aggregate volume of 32.98m units.
Today the index fell by 0.03 points (0.01%) to 351.54 points. The main decliners (in percentage terms) were -
- FLIRr Systems (FLIR) -1.68 (3.7%) to $43.42 on volume of 2.39m shares;
- Teledyne Tech (TDY) -0.68 (1.3%) to $53 on volume of 0.13m shares;
- General Electric (GE) -0.31 (1.1%) to $27.69 on volume of 25.35m shares;
- Northrop Grummanl (NOC) -0.49 (0.7%) to $65.16 on volume of 0.75m shares; and
- Rockwell Collins (COL) -0.34 (0.7%) to $46.45 on volume of 1.15m shares.
Currency Futures
Currency futures performed as follows -
| Currency Futures | |||
| Index | Close | Gain(Loss) | % |
| U.S. Dollar Index | 72.20 | -0.225 | -0.31 |
| Euro FX | 1.5847 | 0.0051 | 0.32 |
| Swiss Franc | 0.9798 | 0.0009 | 0.09 |
| Australian Dollar | 0.9685 | 0.0053 | 0.55 |
| Canadian Dollar | 0.9982 | 0.0052 | 0.52 |
| Japanese Yen | 0.9398 | 0.0014 | 0.15 |
| New Zealand Dollar | 0.7541 | -0.0004 | -0.05 |
