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It's funny watching professional auto-cue readers - those who call themselves 'financial journalists'. From Faux News to CNBC to Bloomberg , these folks ride every market wiggle like the worst of the nuffnuffs. They desperately search for silver linings during declines, but advances are accorded some sort of 'state of grace'. Declines need explanations, but advances are just reasons to smile - if only to show off the $5k spent on teeth that now look like a bleached mouthguard.
Couple that with the gallons of peroxide evident among the gazillion presenters who didn't think they looked pretty enough as a brunette, and you have a recipe for some of the most fatuous repartee in human history.
Still - today the story is that some bright spark has managed to show that if you ignore the beginning valuation and choose the starting point judiciously, that Democratic presidencies are 'good for the stock market'.
Oh please. That sort of selective analysis tripe should have joined Abby Joseph Cohen and Tom Galvin in history's trash-heap.
Still, it really does look as if America's parasites will be headed up by a skinny bisexual mulatto, replacing the skinny bisexual inbred we know as Brokeback Cowboy, George the Turd.
Now don't get me wrong - I have nothing whatsoever against bisexuals, or homosexuals or even people who want to have sex with vegetables. I would love a world in which nobody gave a rat's, and it wasn't an issue.
But it is an issue for most mouth-breathers... and if it's an issue, you ought not hide it (as 'Dubya' has been doing with his silly Village People cowboy schtick) - he ought to have declared his love of wearing makeup openly, and let folks decide if they still want you to lead.
Can you imagine what will happen to Carlyle's stock price if they accept Dubya into their ranks? Can you imagine anybody being prepared to employ him (except to aid research to show that people shouldn't breed with their cousins)?
Anyway... go back a bit further in history and include a few more Democratic administrations, and you will find that it makes absolutely no difference which party is in power. Beginning valuations matter, and valuations right now are not good - and prospects are for earnings to continue to fall (making valuations even worse).
The US market just touched overbought today, and in all likelihood will test the previous bounce high (set less than three weeks ago). But it's not going higher for any length of time worth measuring.
Economic News
Factory Orders dropped by 2.5% (consensus was for a drop of 0.8%). The important number within the release - non-defence capex excluding aircraft - was weakly positive, although well down on prior months.
Fed Open Market Operations
The Fed's Open Market Operations desk performed 2 repurchase operations:
- a 28 Day repurchase totalling $ 20bn, and
- a 1 Day repurchase totalling $ 25.000bn, entirely in Treasury-backed collateral. The repurchase was undertaken at a weighted average rate of 0.253% - 75 basis points below Fed Funds.
With the Fed continuing to shovel funds into the banks' accounts at massive discounts to the Fed Funds rate, they (the Fed) are encouraging banks to speculate in market indices.
The banks have always done this with a portion of the repurchase dough.
I wrote a guide to reading the repo data some years ago, where it was clear that a one-day repo of more than $5bn (in T-backed collateral) undertaken at a discount of more than 10bp to Fed Funds, would result in a goosing of market indices starting just after 10 a.m.; there are good reasons for this.
If the funds obtained through th repurchase operation are used to goose the futures market, the leverage employed means that the banks require a gain of less than 0.2 points (the minimum move on the S&P futures) to completely fund the repurchase - effectively rendering the money costless.
The threshold numbers for that idea will have changed somewhat - but not substantially.
Headline Indices
The Dow Jones Industrial Average advanced +305.45 points (3.28%) to 9625.28 points. The index high for the day was 9651.01, while the low was 9323.89.
The Dow Jones Industrial Average index (DJI) contains 30 components; the total volume traded in the index was 1072.32m units. Within the index, 29 issues rose, with aggregate volume of 1045.36m units; 1 Dow component fell, with aggregate volume of 26.96m units.
Contributing to the advance were -
- AIG (AIG) +0.27 (12.6%) to $2.41 on volume of 114.92m shares;
- Caterpillar (CAT) +3.24 (8.3%) to $42.25 on volume of 11.36m shares;
- General Electric (GE) +1.47 (7.6%) to $20.77 on volume of 115.34m shares;
- Chevron (CVX) +4.5 (6.1%) to $78.19 on volume of 20.06m shares; and
- Verizon (VZ) +1.86 (6%) to $32.61 on volume of 19.38m shares.
The S&P500 Index advanced +39.45 points (4.08%) to 1005.75 points..
The S&P500 index (SPX) contains 500 components; the total volume traded in the index was 4318.75m units. Within the index, 448 issues rose, with aggregate volume of 3970.85m units; 42 issues fell, with aggregate volume of 342.78m units.
Contributing to the advance were -
- CIT Group (CIT) +1.63 (36.1%) to $6.15 on volume of 36.47m shares;
- Principal Financial Group (PFG) +5.11 (22.8%) to $27.5 on volume of 5.93m shares;
- Rowan Cos. (RDC) +3.81 (20.7%) to $22.25 on volume of 6.34m shares;
- Genl Growth Properties (GGP) +0.76 (20.4%) to $4.49 on volume of 9.7m shares; and
- E*Trade Financial Corp. (ETFC) +0.34 (19.3%) to $2.1 on volume of 18.08m shares.
The Nasdaq Composite advanced +53.79 points (3.12%) to 1780.12 points. The Nasdaq100 advanced +43.65 points (3.27%) to 1378.40 points..
The Nasdaq100 index (NDX) contains 100 components; the total volume traded in the index was 1093.69m units. Within the index, 83 issues rose, with aggregate volume of 964.25m units; 15 issues fell, with aggregate volume of 124.32m units.
Contributing to the advance were -
- Foster Wheeler (FWLT) +5.05 (19%) to $31.6 on volume of 5.48m shares;
- Expeditors International of Washington (EXPD) +5.75 (18%) to $37.75 on volume of 5.65m shares;
- Level 3 Communications (LVLT) +0.18 (15.8%) to $1.32 on volume of 58m shares;
- Ryanair Holdings plc (RYAAY) +3.31 (14.8%) to $25.73 on volume of 1.22m shares; and
- Joy Global (JOYG) +4.12 (14.6%) to $32.26 on volume of 3.22m shares.
Volatility
The CBOE Volatility Index lost 5.95 points (11.08%) to 47.73 points..
The CBOE Nasdaq100 Volatility Index lost 4.97 points (8.84%) to 51.25 points..
Breadth and Internals
A total of 3559 issues traded today on the NYSE; today's total volume was 3.3bn shares. A total of 2779 stocks posted gains for the day, and volume in advancing issues totalled 2.6bn shares. Exerting downwards pressure on the index were 731 losers, which accounted for a total declining volume of 0.7bn shares. 8 stocks made new 1-year highs on the NYSE, while 67 shares plumbed new 52-week depths.
On the Nasdaq 3000 tickers traded today; total Nasdaq volume was 2.3bn shares. A total of 1843 stocks posted gains for the day, with aggregate volume of 1.89bn shares changing hands in the day's winners. The red zone of the Nasdaq exchange comprised 1041 losers, and total declining volume was 0.4bn shares. 13 Nasdaq-listed stocks hit new 52-week highs, while 77 shares dipped to new 1-year lows.
| Major Market Statistics | |||
| Index | Close | Gain(Loss) | % |
| Dow Jones Industrial Average | 9625.28 | +305.45 | 3.28% |
| S&P500 Index | 1005.75 | +39.45 | 4.08% |
| Nasdaq Composite | 1780.12 | +53.79 | 3.12% |
| Nasdaq100 | 1378.40 | +43.65 | 3.27% |
| CBOE Volatility Index | 47.73 | -5.95 | -11.08% |
| CBOE Nasdaq100 Volatility Index | 51.25 | -4.97 | -8.84% |
Dow Darlings
- Caterpillar (CAT) +3.24 (8.3%) to $42.25 on volume of 11.4m units
- General Electric (GE) +1.47 (7.6%) to $20.77 on volume of 115.7m units
- Chevron (CVX) +4.5 (6.1%) to $78.19 on volume of 20.1m units
- Verizon (VZ) +1.86 (6%) to $32.61 on volume of 19.4m units
- United Technologies (UTX) +3 (5.5%) to $57.25 on volume of 8m units
Dow Duds:
- Hewlett-Packard (HPQ) -0.37 (1%) to $38.24 on volume of 27m units
Most Traded Dow stocks:
- General Electric (GE) +1.47 (7.6%) to $20.77 on volume of 115.7m units
- Bank Of America (BAC) +0.92 (3.9%) to $24.53 on volume of 89.5m units
- Citigroup (C) +0.69 (4.9%) to $14.68 on volume of 80.1m units
- Microsoft (MSFT) +0.91 (4%) to $23.53 on volume of 72m units
- Intel (INTC) +0.62 (4%) to $16.26 on volume of 71.1m units
Precious Metals
Precious metals futures advanced solidly -
| Precious Metals Futures | |||
| Index | Close | Gain(Loss) | % |
| Gold | 766.3 | 39.5 | 5.43 |
| Silver | 10.23 | 0.48 | 4.92 |
| Palladium | 208.55 | 6.25 | 3.09 |
| Platinum | 859.9 | 32.8 | 3.97 |
The Gold Bugs index (XAU) contains 16 components; the total volume traded in the index was 128.43m units. Within the index, 16 issues rose, with aggregate volume of 128.43m units; 0 issues fell, with aggregate volume of 0m units.
Today the index rose by 11.99 points (14.78%) to 93.13 points. Contributing to the advance were -
- Pan-American Silver (PAAS) +2.58 (22.5%) to $14.05 on volume of 2.26m shares;
- Silver Stand Resources (SSRI) +1.89 (21.9%) to $10.51 on volume of 1.43m shares;
- Silver Wheaton (SLW) +0.78 (21.1%) to $4.48 on volume of 5.11m shares;
- Agnico Eagle Mines (AEM) +5.65 (19.7%) to $34.27 on volume of 4.01m shares; and
- Kinroos Gold (KGC) +2.08 (19.3%) to $12.84 on volume of 8.83m shares.
Energy Complex
Energy futures went bananas -
| Energy Futures | |||
| Commodity | Close | Gain(Loss) | % |
| Crude Oil | 70.03 | 6.12 | 9.58 |
| Heating Oil | 2.1419 | 0.1591 | 8.02 |
| Natural Gas | 7.255 | 0.417 | 6.1 |
| Gasoline RBOB | 1.525 | 0.1625 | 11.93 |
| Ethanol | 1.843 | 0.08 | 4.54 |
The Oil Services index (OSX) contains 15 components; the total volume traded in the index was 134.81m units. Within the index, 15 issues rose, with aggregate volume of 134.81m units; 0 issues fell, with aggregate volume of 0m units.
Today the index rose by 14.95 points (10.11%) to 162.77 points. Contributing to the advance were -
- Global Industries (GLBL) +0.78 (26.3%) to $3.75 on volume of 3.79m shares;
- Rowan Co (RDC) +3.81 (20.7%) to $22.25 on volume of 6.34m shares;
- Nabors Industries (NBR) +2.4 (16.2%) to $17.25 on volume of 13.5m shares;
- Weatherford International (WFT) +2.14 (14.2%) to $17.17 on volume of 15.5m shares; and
- Cameron International (CAM) +3.16 (13.1%) to $27.37 on volume of 5.24m shares.
Currency Futures
Currency futures performed in line with Monday's SPISpy e-mail (where long Euro was declared as one for those who could withstand a possible counter-move for a day or so) -
| Currency Futures | |||
| Index | Close | Gain(Loss) | % |
| U.S. Dollar Index | 84.925 | -2.06 | -2.37 |
| Euro FX | 1.2931 | 0.0322 | 2.55 |
| Swiss Franc | 0.8587 | 0.0061 | 0.72 |
| Australian Dollar | 0.6944 | 0.016 | 2.36 |
| Canadian Dollar | 0.8672 | 0.0237 | 2.81 |
| Japanese Yen | 1.0036 | -0.0076 | -0.75 |
| New Zealand Dollar | 0.6 | 0.0091 | 1.54 |
Bellwethers
The nine-stock group that makes up the Rant bellwethers advanced on average by 4.4%. The fallout occurred as follows:
- General Electric (GE) +1.47 (7.62%) to $20.77 on volume of 115.69m units.
- Citigroup (C) +0.69 (4.93%) to $14.68 on volume of 80.14m units.
- Wal-Mart (WMT) +0.16 (0.29%) to $56.13 on volume of 23.05m units.
- IBM (IBM) +0.72 (0.78%) to $93.40 on volume of 10.16m units.
- Intel (INTC) +0.62 (3.96%) to $16.26 on volume of 71.1m units.
- Cisco Systems (CSCO) +1.13 (6.57%) to $18.33 on volume of 79.81m units.
- Google (GOOG) +20.45 (5.9%) to $366.94 on volume of 7.34m units.
- Fannie Mae (FNM) +0.05 (5.88%) to $0.90 on volume of 14.84m units.
- Freddie Mac (FRE) +0.04 (3.96%) to $1.05 on volume of 20.97m units.
Other Indices of Interest...
The Banks index (BKX) contains 24 components; the total volume traded in the index was 511.96m units. Within the index, 23 issues rose, with aggregate volume of 511.96m units; 0 issues fell, with aggregate volume of 0m units.
Today the index rose by 3.05 points (5.18%) to 61.95 points. Contributing to the advance were -
- Huntington Bancshares (HBAN) +1.1 (11.4%) to $10.73 on volume of 9.98m shares;
- Capital One Financial (COF) +3.2 (8.1%) to $42.82 on volume of 6.55m shares;
- Northern Trust (NTRS) +3.99 (7.5%) to $57.33 on volume of 3.53m shares;
- Fifth Third Bancorp (FITB) +0.85 (7.4%) to $12.35 on volume of 10.99m shares; and
- National City (NCC) +0.18 (7.1%) to $2.71 on volume of 81.93m shares.
The Semiconductor index (SOX) contains 18 components; the total volume traded in the index was 243.3m units. Within the index, 18 issues rose, with aggregate volume of 243.3m units; 0 issues fell, with aggregate volume of 0m units.
Today the index rose by 10.61 points (4.47%) to 247.71 points. Contributing to the advance were -
- Infineon Tech (IFX) +0.58 (17.1%) to $3.97 on volume of 2.16m shares;
- Marvell Technology (MRVL) +0.66 (9.9%) to $7.36 on volume of 22.05m shares;
- Sandisk (SNDK) +0.73 (7.9%) to $9.96 on volume of 9.64m shares;
- Teradyne (TER) +0.41 (7.9%) to $5.6 on volume of 3.29m shares; and
- ST Microelectronic (STM) +0.6 (7.1%) to $9.02 on volume of 1.21m shares.
The ChildKiller ("Defence") index (DFX) contains 17 components; the total volume traded in the index was 151.76m units. Within the index, 14 issues rose, with aggregate volume of 151.21m units; 2 issues fell, with aggregate volume of 0.5m units.
Today the index rose by 9.27 points (3.28%) to 292.09 points. Contributing to the advance were -
- Embraer Empresa (ERJ) +1.64 (8.2%) to $21.65 on volume of 0.88m shares;
- General Electric (GE) +1.47 (7.6%) to $20.77 on volume of 115.34m shares;
- United Technologies (UTX) +3 (5.5%) to $57.25 on volume of 7.98m shares;
- General Dynamics (GD) +2.75 (4.5%) to $63.77 on volume of 2.55m shares; and
- Esterline Tech (ESL) +1.56 (4.2%) to $38.32 on volume of 0.2m shares.
