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Well crikey - what a carve up. All of a sudden the lack of vim in the Australian market (after about 10:45 a.m. Sydney time) doesn't look as silly as some might have thought.
Journalists will scrape around for today's excuse - for them, markets rise or fall 'on the back of' a single fifteen word event or 'as' a fifteen word event unfolds (regardless of whether the putative link makes the lest lick of sense).
Journalists are like teachers - mostly they are academic also-rans, and they seize on any explanation they can understand... so the US civil war was about slavery, we are all going to drown as the ice caps melt (they're 30% bigger this year), and the government is here to protect us all from nasties. What maroons.
Today it was only three words "Markets fall on Credit Loss Speculation" - which was shorthand for the slightly longer "speculation that credit losses will far exceed initial optimistic estimates of $200 billion".
That's 15 words (you need to count 'two hundred billion dollars' as four words). it has to be 15, or it just doesn't have the right cadence.
Anyhow... the idea that today, Monday August 25th 2008, a bunch of investors woke up and finally saw what had been staring them in the face for the last year and a half? Sorry, but that is hogwash.
Markets fell today because we are in a bear market. A generational bear market that is likely to be longer and deeper and more painful than anything ever witnessed since the Dark Ages (that's the last time society had a genuine multi-generation reversal in the standard of living).
There is one caveat to that - and it is what I think will save us all (so long as politicians can be kept out of the way - by mass slaughter of politicians if necessary). It is nanotechnology - which is proceeding at a pace which gladdens my cynical old heart. Every day I survey the nanotech literature (not the stockbroker babble, which is just absolute tripe - but the journal literature).
Let me tell you, we are closer than ever to the quantum shift in production technology that will be like a thousand Industrial Revolutions rolled into one. So long as we don't allow politicians and bureaucrats - people whose sense of worth is derived from the gap between themselves and the rest - to run the show. People like Prick Cheney, for example.
Economic News
Existing Home Sales for July were 5m units, which was higher than expected. Inventories of unsold homes rose , and prices fell 7% year over year. To think, it's not that long ago that if someone (say, me) babbled about how homes were overvalued, they were looked at with a mixture of scorn and pity - as a if they were a retarded red-headed step-child.
Nobody cared much, since soon banks will own pretty much all the real estate in the western world - but it will be worth about 45% of the value of the loans for which is was used as security.
Fed Open Market Operations
The Fed's Open Market Operations desk performed a single repurchase today - a 1 Day repurchase totalling $7bn, with $4.861bn in Treasury-backed collateral, with a weighted average rate of 2.008%.
Headline Indices
The Dow Jones Industrial Average lost 241.81 points (2.08%) to 11386.25 points. The index high for the day was 11626.27 at the open, while the low was 11362.96 set about a quarter of an hour before the close.
Total volume traded in the index was 546.23m units. All 30 issues fell. Days like this stuff up index-level McLellan Oscillators (believe me - the struggles I have had doing industry-index work for Australian markets where some indices have two or three members and you often get either advancing or declining volume equal to zero... you just have to pull a plausible alternative out of your vord).
The S&P500 Index lost 25.36 points (1.96%) to 1266.84 points. Total volume traded in the index was 2.75bn units. Within the index, 23 issues rose, with aggregate volume of just 412.45m units; 471 issues fell, with aggregate volume of 2.29bn units.
The main decliners (in percentage terms) were -
- Dillard Inc. (DDS) -0.81 (6.8%) to $11.04 on volume of 0.94m shares;
- Coach Inc. (COH) -1.93 (6.8%) to $26.4 on volume of 9.31m shares;
- Huntington Bancshares (HBAN) -0.51 (6.8%) to $7 on volume of 7.79m shares;
- Lehman Bros. (LEH) -0.96 (6.7%) to $13.45 on volume of 60.01m shares; and
- Ryder System (R) -4.41 (6.4%) to $64.72 on volume of 2.47m shares.
The Nasdaq Composite lost 49.12 points (2.03%) to 2365.59 points and the Nasdaq100 lost 41.75 points (2.16%) to 1889.72 points.
The total volume traded in the Nasdaq100 was 616.29m units. Within the index, 3 issues rose, with aggregate volume of 14.96m units; 95 issues fell, with aggregate volume of 601.33m units.
The main decliners (in percentage terms) were -
- Steel Dynamics (STLD) -2.1 (8.2%) to $23.39 on volume of 8.29m shares;
- Focus Media Holding (FMCN) -1.77 (5.5%) to $30.17 on volume of 2.44m shares;
- Expedia (EXPE) -0.96 (5%) to $18.38 on volume of 3.31m shares;
- Ryanair Holdings plc (RYAAY) -1.19 (4.9%) to $23.26 on volume of 0.7m shares; and
- Cognizant Technology Solutions (CTSH) -1.42 (4.7%) to $28.89 on volume of 4.59m shares.
The CBOE Volatility Index advanced 2.19 points (11.64%) to 21.00 points while the CBOE Nasdaq100 Volatility Index advanced 1.97 points (8.8%) to 24.35 points.
Breadth/InternalsA Total of 3474 issues traded today on the NYSE; today's total volume was 3.42 billion shares. A total of 751 counters posted gains for the day, with aggregate volume of 610 million shares trading to the upside. Exerting downwards pressure on the index were the 2636 losers, which accounted for a total volume of 2.79 billion shares. 12 stocks made new 1-year highs on the NYSE, while 103 shares plumbed new 52-week depths.
Over on the Nasdaq 2984 tickers traded today; total Nasdaq volume was 2.65 billion shares. A total of 619 stocks posted gains for the day, with aggregate volume of 260 million shares trading to the upside. The red zone of the Nasdaq exchange was populated with 2234 losers, which accounted for a total volume of 2.36 billion shares. 40 Nasdaq-listed stocks hit new 52-week highs, while 110 shares dipped to new 1-year lows.
| Major Market Statistics | |||
| Index | Close | Gain(Loss) | % |
| Dow Jones Industrial Average | 11386.25 | -241.81 | -2.08% |
| S&P500 Index | 1266.84 | -25.36 | -1.96% |
| Nasdaq Composite | 2365.59 | -49.12 | -2.03% |
| Nasdaq100 | 1889.72 | -41.75 | -2.16% |
| CBOE Volatility Index | 21.00 | +2.19 | 11.64% |
| CBOE Nasdaq100 Volatility Index | 24.35 | +1.97 | 8.8% |
Dow Duds
- AIG (AIG) -1.09 (5.5%) to $18.78 on volume of 47m units
- Bank Of America (BAC) -1.25 (4.1%) to $28.96 on volume of 40.8m units
- JPMorganChase (JPM) -1.54 (4.1%) to $36.13 on volume of 26.8m units
- General Motors (GM) -0.31 (3%) to $10.13 on volume of 11.9m units
- Chevron (CVX) -2.59 (2.9%) to $85.51 on volume of 11m units
Most Traded Dow stocks
- Citigroup (C) --0.53 (2.9%) to $17.61 on volume of 61m units
- Microsoft (MSFT) --0.18 (0.6%) to $27.66 on volume of 50.4m units
- AIG (AIG) --1.09 (5.5%) to $18.78 on volume of 47m units
- Intel (INTC) --0.52 (2.2%) to $22.97 on volume of 41.3m units
- General Electric (GE) --0.8 (2.7%) to $28.32 on volume of 41.1m units
Precious Metals
Precious metals futures continued to mark time after last week's little flourish - we need to hope for a catalyst now, to enable us t get set for the next eye-popping advance (because you just know that the US government is going to start bailing out every loser company in America, at a phenomenal cost to the budget, and thus to inflation and the USD).
| Precious Metals Futures | |||
| Index | Close | Gain(Loss) | % |
| Gold | 822.1 | -7.4 | -0.89 |
| Silver | 13.39 | -0.087 | -0.65 |
| Palladium | 289 | 0 | 0 |
| Platinum | 1439.9 | -1.3 | -0.09 |
The Gold Bugs index (XAU) contains 16 components; the total volume traded in the index was 52.76m units. Within the index, 1 issues rose, with aggregate volume of 2.4m units; 14 issues fell, with aggregate volume of 42.44m units.
Today the index fell by 1.87 points (1.26%) to 146.96 points. The main decliners (in percentage terms) were -
- Silver Stand Resources (SSRI) -1.25 (4.7%) to $25.3 on volume of 0.59m shares;
- Freeport McMoran (FCX) -2.79 (3.1%) to $87.81 on volume of 6.96m shares;
- Royal Gold (RGLD) -0.56 (1.6%) to $33.73 on volume of 0.22m shares;
- AngloGold Ashanti (AU) -0.37 (1.4%) to $26.44 on volume of 0.94m shares; and
- Kinroos Gold (KGC) -0.22 (1.3%) to $16.39 on volume of 3.89m shares.
Energy Complex
Energy futures are still slightly groggy after Friday's futures-expiration sucker-punch.
| Energy Futures | |||
| Commodity | Close | Gain(Loss) | % |
| Crude Oil | 115.33 | 0.74 | 0.65 |
| Heating Oil | 3.1875 | 0.0282 | 0.89 |
| Natural Gas | 7.853 | 0.01 | 0.13 |
| Gasoline RBOB | 2.892 | 0.0234 | 0.82 |
| Ethanol | 2.349 | 0.009 | 0.38 |
The Oil Services index (OSX) contains 15 components; the total volume traded in the index was 52.71m units. Within the index, 2 issues rose, with aggregate volume of 8.07m units; 13 issues fell, with aggregate volume of 44.64m units.
Today the index fell by 3.93 points (1.32%) to 293.7 points. The main decliners (in percentage terms) were -
- Smith International (SII) -2.96 (4%) to $70.71 on volume of 4.33m shares;
- Global Industries (GLBL) -0.19 (2.1%) to $8.86 on volume of 2.71m shares;
- Oceaneering International (OII) -1.11 (1.8%) to $59.11 on volume of 0.42m shares;
- Rowan Co (RDC) -0.6 (1.6%) to $37.02 on volume of 2.39m shares; and
- Noble Corp (NE) -0.8 (1.6%) to $50.61 on volume of 3m shares.
Bellwethers
The nine-stock group that makes up the Rant bellwethers advanced on average by 0.7% thanks to advances in the rescue twins - Fannie and Freddie. The fallout occurred as follows:
- General Electric (GE) -0.8 (2.75%) to $28.32 on volume of 41.09m units.
- Citigroup (C) -0.53 (2.92%) to $17.61 on volume of 60.97m units.
- Wal-Mart (WMT) -0.89 (1.5%) to $58.55 on volume of 11.8m units.
- IBM (IBM) -2.07 (1.66%) to $122.86 on volume of 5.59m units.
- Intel (INTC) -0.52 (2.21%) to $22.97 on volume of 41.27m units.
- Cisco Systems (CSCO) -0.5 (2.02%) to $24.21 on volume of 27.69m units.
- Google (GOOG) -7.58 (1.55%) to $483.01 on volume of 1.98m units.
- Fannie Mae (FNM) +0.19 (3.8%) to $5.19 on volume of 131.51m units.
- Freddie Mac (FRE) +0.48 (17.08%) to $3.29 on volume of 175.92m units.
Other Indices of Interest...
The Banks index (BKX) contains 24 components; the total volume traded in the index was 368.52m units. All index components fell.
Today the index fell by 0.2 points (0.32%) to 61.88 points. The main decliners (in percentage terms) were -
- Huntington Bancshares (HBAN) -0.51 (6.8%) to $7 on volume of 7.79m shares;
- Washington Mutual (WM) -0.23 (6%) to $3.6 on volume of 53.19m shares;
- Suntrust Banks (STI) -2.56 (6%) to $40.15 on volume of 5.27m shares;
- Keycorp (KEY) -0.59 (5.1%) to $10.88 on volume of 8.09m shares; and
- Bank Of America (BAC) -1.25 (4.1%) to $28.96 on volume of 40.69m shares.
The Semiconductor index (SOX) contains 18 components; the total volume traded in the index was 170.76m units. Within the index, 1 issue rose, with aggregate volume of 24.47m units; 17 issues fell, with aggregate volume of 146.29m units.
Today the index fell by 5.69 points (1.55%) to 360.51 points. The main decliners (in percentage terms) were -
- Broadcom (BRCM) -1.25 (4.6%) to $26.17 on volume of 10.43m shares;
- Micron Technology (MU) -0.2 (4.3%) to $4.49 on volume of 16.55m shares;
- Intel (INTC) -0.52 (2.2%) to $22.97 on volume of 41.24m shares;
- Marvell Technology (MRVL) -0.32 (2%) to $15.67 on volume of 10.31m shares; and
- Applied Materials (AMAT) -0.37 (2%) to $18.12 on volume of 11.63m shares.
The ChildKiller ("Defence") index (DFX) contains 17 components; the total volume traded in the index was 62.6m units. Within the index, 1 issues rose, with aggregate volume of 0.09m units; 16 issues fell, with aggregate volume of 62.51m units.
Today the index fell by 6.25 points (1.67%) to 367.75 points. The main decliners (in percentage terms) were -
- Gencorp (GY) -0.45 (5.9%) to $7.22 on volume of 0.4m shares;
- FLIRr Systems (FLIR) -1.32 (3.5%) to $36.1 on volume of 0.78m shares;
- General Electric (GE) -0.8 (2.7%) to $28.32 on volume of 41.07m shares;
- Boeing (BA) -1.48 (2.3%) to $64.07 on volume of 4.46m shares; and
- Teledyne Tech (TDY) -1.27 (2%) to $61.91 on volume of 0.26m shares.
Currency Futures
Currency futures marked time -
| Currency Futures | |||
| Index | Close | Gain(Loss) | % |
| U.S. Dollar Index | 76.925 | 0.03 | 0.04 |
| Euro FX | 1.4741 | -0.0017 | -0.12 |
| Swiss Franc | 0.9129 | 0.0022 | 0.24 |
| Australian Dollar | 0.8615 | -0.0024 | -0.28 |
| Canadian Dollar | 0.9518 | -0.0022 | -0.23 |
| Japanese Yen | 0.9161 | 0.0059 | 0.65 |
| New Zealand Dollar | 0.702 | -0.0043 | -0.61 |
