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Boy - this is interesting. For the Dow, the S&P500 and the Nasdaq Comp, anybody who bought the index after 10:05 a.m. last Monday is now underwater. The Nasdaq100 was even more worser - it gave back every point of last week's advance, and started eating into the one-day surge off the low of November 21.
Now I am not going to beat you over the head with yet another repetition of how I was right when I declared the pre-holiday rally to have been a complete fake... that is not the interesting bit.
The interesting bit is as follows: look at the internals for today. Horrible breadth and massively tilted advance-decline stats. Volume massively, overwhelmingly on the sell side of the market. A decline that accelerated into the last hour.
If we had seen these sorts of tilts six session ago, I would have been calling a bottom. But the problem is the US market went from oversold to overbought, so the big change in market internals seems (to me, at least) to be nothing more than Buyers' Remorse.
And last but not least, the real 'Money Honey' - Meredith Whitney, the Oppenheimer analyst who was the first major analyst to call the decline in bank stocks (before the fact), has now gone on record as forecasting a $2 trillion reduction in credit card lines by major US institutions.
I have a lot of respect for Ms Whitney (or perhaps I should use her married name - Mrs Death Mask). Not only is she a hottie, not only is she clearly a good analyst... she is also married to a professional wrestler. That is teh cool.
Anyhow... economy in recession... check. What do you think will happen to corporate earnings if $2 trillion is withdrawn from consumer credit?Economic News
Construction Spending for October fell 1.2%, which was a bit worse than expected (expectations were for a fall of about 1%). Inside the report, residential construction fell 3.5%, but still rose almost 10% year-on-year.
The ISM Index fell to 36.2 - its lowest reading since May 1982, and well below what the market expected (consensus was for a fall to 37.5) .
The internals of the index were ghastly: the Orders component of the index fell to its lowest level since June 1980 and the Prices component registered its lowest reading since May 1949. Only one part of the ISM index escaped a loss - Export Orders which was unchanged.
I've said before that the ISM index doesn't measure a damned thing and is not a guide - for good or ill - to the economic landscape. Like the LEI it is a piece of showmanship and advertising. It happens on this occasion to show the same weakness as the rest of the data coming out of the US..
And last but least, the Department of Retardedly Stating the Obvious, declared that the US economy is in recession and that it started in December 2007. They also stated that they have figured out that Japan attacked Pearl Harbour some time in late December 1941, and that George Washington's troops faced a tough winter at Valley Forge in 1777.
OK - maybe they didn't make those last two pronouncements... and the mob doing the announcement was the NBER's Cycle-Dating Committee; a bunch of plodders who could not make a forward-looking statement if you held a gun to their heads.
Headline Indices
The Dow Jones Industrial Average slid 679.95 points (7.7%) to 8149.09 points. The index high for the day was 8827.05, while the low was 8142.80.
Total volume traded in the 30 components of the index was 1.28bn shares. Decliners outpaced gainers by the ultimate margin - all 30 index components declined. The biggest decliners (in percentage terms) were all Financials -
- Citigroup (C) -1.84 (22.2%) to $6.45 on volume of 309.38m shares;
- Bank Of America (BAC) -3.4 (20.9%) to $12.85 on volume of 122.92m shares;
- AIG (AIG) -0.36 (17.9%) to $1.65 on volume of 53.96m shares;
- JPMorganChase (JPM) -5.54 (17.5%) to $26.12 on volume of 67.27m shares; and
- American Express (AXP) -3.67 (15.7%) to $19.64 on volume of 18.69m shares.
The S&P500 Index declined 80.03 points (8.93%) to 816.21 points. Total volume traded in the 500 components of the index was 4.8bn shares. Decliners outpaced gainers by 242.5 to one, with 485 decliners to just 2 advancers. Declining volume was greater than advancing volume by 4.74bn to 10.35m shares. The main decliners (in percentage terms) were -
- ProLogis (PLD) -1.3 (33.9%) to $2.53 on volume of 19.41m shares;
- CB Richard Ellis Group (CBG) -1.34 (29.4%) to $3.22 on volume of 11.71m shares;
- Fannie Mae (FNM) -0.32 (27.6%) to $0.84 on volume of 177.24m shares;
- Liz ClaiborneInc. (LIZ) -0.74 (26%) to $2.11 on volume of 15.97m shares; and
- Developers Diversified Rlty (DDR) -1.22 (25.4%) to $3.58 on volume of 7.7m shares.
The Nasdaq Composite declined 137.5 points (8.95%) to 1398.07 points and the Nasdaq100 slid 94.59 points (7.98%) to 1091.16 points..
The Nasdaq100 index (NDX) dipped 94.59 points (7.98%) to 1091.16 points. Total volume traded in the 100 components of the index was 895.46m shares. Not a single index component gained ground, and there were 98 decliners in the index. The main decliners (in percentage terms) were -
- Virgin Media (VMED) -1.02 (21.6%) to $3.71 on volume of 5.1m shares;
- UAL (UAUA) -2.31 (20.5%) to $8.94 on volume of 8.88m shares;
- Liberty Global (LBTYA) -2.78 (19.2%) to $11.71 on volume of 3.21m shares;
- Amylin Pharmaceuticals (AMLN) -1.35 (18.2%) to $6.06 on volume of 2.58m shares; and
- Steel Dynamics (STLD) -1.45 (17.6%) to $6.81 on volume of 4.38m shares.
Volatility
The CBOE Volatility Index advanced +13.32 points (24.1%) to 68.60 points and the CBOE Nasdaq100 Volatility Index added +10.31 points (18.39%) to 66.36 points..
Breadth and Internals
A total of 3878 issues traded today on the NYSE; today's total volume was 2.21bn shares. A total of 502 stocks posted gains for the day, and volume in advancing issues totalled 270m shares. Exerting downwards pressure on the index were 3329 losers, which accounted for a total declining volume of 1.94bn shares. 14 stocks made new 1-year highs on the NYSE, while 104 shares plumbed new 52-week depths.
On the Nasdaq 2989 tickers traded today; total Nasdaq volume was 1.9bn shares. A total of 466 stocks posted gains for the day, with aggregate volume of just 45 million shares changing hands in the day's winners. The red zone of the Nasdaq exchange comprised 2445 losers, and total declining volume was 1.85bn shares. 5 Nasdaq-listed stocks hit new 52-week highs, while 147 shares dipped to new 1-year lows.
| Major Market Statistics | |||
| Index | Close | Gain(Loss) | % |
| Dow Jones Industrial Average | 8149.09 | -679.95 | -7.7% |
| S&P500 Index | 816.21 | -80.03 | -8.93% |
| Nasdaq Composite | 1398.07 | -137.50 | -8.95% |
| Nasdaq100 | 1091.16 | -94.59 | -7.98% |
| CBOE Volatility Index | 68.60 | +13.32 | 24.1% |
| CBOE Nasdaq100 Volatility Index | 66.36 | +10.31 | 18.39% |
No Dow components rose
.Dow Duds:- Citigroup (C) -1.84 (22.2%) to $6.45 on volume of 309.4m units
- Bank Of America (BAC) -3.4 (20.9%) to $12.85 on volume of 122.9m units
- JPMorganChase (JPM) -5.54 (17.5%) to $26.12 on volume of 67.4m units
- American Express (AXP) -3.67 (15.7%) to $19.64 on volume of 18.7m units
- Alcoa (AA) -1.45 (13.5%) to $9.31 on volume of 22.5m units
Most Traded Dow stocks:
- Citigroup (C) --1.84 (22.2%) to $6.45 on volume of 309.4m units
- Bank Of America (BAC) --3.4 (20.9%) to $12.85 on volume of 122.9m units
- General Electric (GE) --1.67 (9.7%) to $15.5 on volume of 102.7m units
- Microsoft (MSFT) --1.61 (8%) to $18.61 on volume of 76.9m units
- JPMorganChase (JPM) --5.54 (17.5%) to $26.12 on volume of 67.4m units
Precious Metals
Precious metals futures got a shellacking - folks obviously think that money supply expansion at a time of weak output growth is non-inflationary. Idiots.
| Precious Metals Futures | |||
| Index | Close | Gain(Loss) | % |
| Gold | 766.9 | -49.3 | -6.04 |
| Silver | 9.305 | -0.88 | -8.64 |
| Palladium | 174.1 | -18.5 | -9.61 |
| Platinum | 807.1 | -75.2 | -8.52 |
The Gold Bugs index (XAU) slid -12.63 points (12.43%) to 88.96 points. Total volume traded in the 16 components of the index was 121.27m shares. All 16 index components fell. The main decliners (in percentage terms) were -
- Coeur d'Alene (CDE) -0.17 (25%) to $0.51 on volume of 7.85m shares;
- Gold Fields Ltd (GFI) -1.46 (17.8%) to $6.76 on volume of 8.51m shares;
- Yamana Gold (AUY) -0.94 (16.2%) to $4.87 on volume of 17.63m shares;
- Harmony Gold (HMY) -1.39 (16.1%) to $7.25 on volume of 2.5m shares; and
- RandGold Resources (GOLD) -6.01 (15.7%) to $32.22 on volume of 0.98m shares.
Energy Complex
Energy futures were absolutely savaged, with the new front-month (Feb) falling below $50 -
| Energy Futures | |||
| Commodity | Close | Gain(Loss) | % |
| Crude Oil | 49.15 | -5.28 | -9.7 |
| Heating Oil | 1.6164 | -0.1107 | -6.41 |
| Natural Gas | 6.557 | 0.047 | 0.72 |
| Gasoline RBOB | 1.1462 | -0.0336 | -2.85 |
| Ethanol | 1.596 | -0.059 | -3.56 |
The Oil Services index (OSX) declined -21.84 points (15.87%) to 115.82 points. Total volume traded in the 15 components of the index was 109.35m shares. All index components fell. The main decliners (in percentage terms) were -
- Weatherford International (WFT) -2.73 (21.4%) to $10.04 on volume of 14.06m shares;
- Rowan Co (RDC) -3.36 (19.4%) to $13.99 on volume of 3.93m shares;
- Smith International (SII) -5.63 (19.3%) to $23.61 on volume of 3.94m shares;
- BJ Services (BJS) -2.19 (18.3%) to $9.8 on volume of 10.39m shares; and
- National Oilwell Varco (NOV) -5.14 (18.2%) to $23.15 on volume of 10.07m shares.
Currency Futures
Currency futures gave a bit of a bid to the USD; no matter - our AUD long is still well in the black. The EUR long is underwater a tad, but once the ECB cut is out of the way it will be time to skin the late shorts.
| Currency Futures | |||
| Index | Close | Gain(Loss) | % |
| U.S. Dollar Index | 87.12 | 0.415 | 0.48 |
| Euro FX | 1.2668 | -0.0032 | -0.25 |
| Swiss Franc | 0.8321 | 0.008 | 0.97 |
| Australian Dollar | 0.6447 | -0.0108 | -1.65 |
| Canadian Dollar | 0.8074 | 0.0013 | 0.16 |
| Japanese Yen | 1.072 | 0.0255 | 2.44 |
| New Zealand Dollar | 0.5335 | -0.0151 | -2.75 |
Bellwethers
The nine-stock group that makes up the Rant bellwethers declined on average by 13.5%. The fallout occurred as follows:
- General Electric (GE) -1.67 (9.73%) to $15.50 on volume of 102.68m units.
- Citigroup (C) -1.84 (22.2%) to $6.45 on volume of 309.41m units.
- Wal-Mart (WMT) -2.87 (5.14%) to $53.01 on volume of 25.01m units.
- IBM (IBM) -4.7 (5.76%) to $76.90 on volume of 9.78m units.
- Intel (INTC) -1.24 (8.99%) to $12.56 on volume of 57.45m units.
- Cisco Systems (CSCO) -1.58 (9.55%) to $14.96 on volume of 61.06m units.
- Google (GOOG) -26.97 (9.21%) to $265.99 on volume of 5.62m units.
- Fannie Mae (FNM) -0.32 (27.59%) to $0.84 on volume of 177.27m units.
- Freddie Mac (FRE) -0.27 (22.88%) to $0.91 on volume of 86.58m units.
Other Indices of Interest...
The Banks index (BKX) fell -8.34 points (17.42%) to 39.53 points. Total volume traded in the 24 components of the index was 752.39m shares. All components of the index fell. The main decliners (in percentage terms) were -
- Wachovia (WB) -1.32 (23.5%) to $4.3 on volume of 43.17m shares;
- Keycorp (KEY) -2.13 (22.7%) to $7.25 on volume of 6.69m shares;
- Citigroup Inc (C) -1.84 (22.2%) to $6.45 on volume of 309.38m shares;
- New M&I Corporation (MI) -3.4 (22%) to $12.05 on volume of 3.43m shares; and
- Capital One Financial (COF) -7.28 (21.2%) to $27.13 on volume of 9.7m shares.
The Semiconductor index (SOX) dipped -15 points (7.57%) to 183.24 points. Total volume traded in the 18 components of the index was 202.8m shares. All members of the index fell. The main decliners (in percentage terms) were -
- Micron Technology (MU) -0.5 (18.2%) to $2.24 on volume of 11.81m shares;
- Advanced Micro Devices (AMD) -0.36 (15.3%) to $2 on volume of 17.08m shares;
- Teradyne (TER) -0.5 (13.2%) to $3.29 on volume of 2.54m shares;
- Infineon Tech (IFX) -0.28 (11.9%) to $2.07 on volume of 0.76m shares; and
- Marvell Technology (MRVL) -0.59 (10.2%) to $5.21 on volume of 8.34m shares.
The ChildKiller ("Defence") index (DFX) fell -21.22 points (8.47%) to 229.22 points. Total volume traded in the 17 components of the index was 139.14m shares. All members of the index fell. The main decliners (in percentage terms) were -
- Gencorp (GY) -0.47 (16.4%) to $2.39 on volume of 0.23m shares;
- Esterline Tech (ESL) -6.04 (16.4%) to $30.87 on volume of 0.43m shares;
- ITT Corporation (ITT) -4.62 (11%) to $37.24 on volume of 1.68m shares;
- Teledyne Tech (TDY) -4.34 (10.7%) to $36.28 on volume of 0.24m shares; and
- General Electric (GE) -1.67 (9.7%) to $15.5 on volume of 102.63m shares.
