MarketRant: USRant: Political Theatre...

Note - from June 24th 2009, this blog has migrated from Blogger to a self-hosted version. Click here to go straight there.

Before I start, let's have a little Toot.

You'll recall that when the USDX was at 88-ish I declared that the US had finished its run, and advocated a buy on AUD at 0.6117 (now above 0.66), and prior to that did likewise on the Euro at 1.2764 (now above 1.33).

Both of those are now up super-duper solidly, having now profited by more than 100% of margin. USDX is now in the 83s.

Likewise Gold - on Dec 8th it was written (with Gold at $774): "Another close above $750 in Gold and the target will be $820-odd". Gold politely treaded water for a day, closing the following session at 776. Today's close: $820.60... Yayy for GT.

Even Crude Oil is showing us a gain after a spike low - we were long from $46.91 on Dec 3 (the call was made one day early, sadly).

Bonds are now in a hyperbubble, so we have to sit on those for about four more days - they are a pain in the bum.

And now we return to regular Ranting...

If there was any need for further evidence of the incestuous relationship between US mega-corporates and the US government, we are seeing it now. We are now seeing political theatre being used to enable Wall Street to position itself for yet another 'Sunday Surprise'.

Yes, I am talking about the make-believe 'resistance' in the Senate towards the bailout for some of the firms that make cars in the US. It is kabuki (which is not Japanese for bullshit). As I wrote when there was supposed resistance in the Senate to the bank bailout:

...The Tycoon's Whores in the US are undertaking a little bit of political-campaign theatre in order to wring as many posturing-points as possible out of this event. In the end they will do what they're paid to do - drop to their collective knees and administer the trillion-dollar blowjob that Wall Street is demanding - which will give the world financial system the equivalent of gonorrhoea crossed with Ebola, and which will have an eventual price tag of $5-6trillion.

This is no different: and for those who would argue that it is not "campaign season" - it is always campaign season for the murderous, lying, grasping, thieving, parasitic scum that live by eating taxes.

Let's think a little about the US carmaker bailout: how come Honda, Toyota and others aren't included? After all, they make cars in the US, and employ tens of thousands of American car workers. They've also been suffering from a downturn in demand; they've also been losing money for their head offices.

If the Big Three (Losers) don't survive, Toyota, Hyundai and Honda will still be buying parts - that will save at least some of the fictional 3 million jobs that 'depend on the car industry'. That number is calculated the way all partican stats are done - pulled out of someone's arse (by counting everybody who works in any industry that includes the letters 'c' 'a' and 'r' for example).

For those who think that government has no business bailing out foreign-domiciled enterprises, I ask the question: what is the registered tax domicile of Citigroup? JPMorgan? You might be surprised.

Also, being a foreign subsidiary hasn't stopped Ford Australia from sticking out its tentacle for money from the Australian government; Toyota Australia likewise.

Also - given that the US styles itself as a bastion of 'free enterprise', it is annoying to see calls for a 'car czar' - yet another politically-appointed bullshit-artist who will 'oversee' the industry.

I mean please.

If the political parasites pick an industry insider the question has to be "Why couldn't this tool get the thing ship-shape before now?".

If they pick a politically connected crony (the default), the question has to be "What part of Das Kapital aren't you going to implement?"

I also find it mind-boggling that 90-day bills were recently bought at prices which guarantee a negative return over the period of the life of the bill. (Short term rates have been negative before - in 1942, from memory). The idea that buyers of US government debt are prepared to accept a known loss in order to hold US government paper indicates that they think that other assets are going to have worse returns over the period. Short 90-day bills (hell, short the entire yield curve - US debt is behaving ridiculously).

Economic News

Economic news was absolutely dire- but is what you would expect from an economy that has been dose up on crystal meth for fifteen years and is now being fed crack, coke and heroin to try and keep the party going.

New Jobless Claims continued their recent climb - they hit 573,000 (consensus was for a rise to 527000); last week's number was also revised upwards. 573000 is a 26-year high, but it must be remembered that the US workforce is a lot bigger than it used to be: these numbers will continue to get worse.

The Trade Balance blew out to a deficit of $57.2b; expectations were for an improvement to -$53.8b.

Household Net worth fell by the largest amount on record - and equity in US housing fell to a record low of just over 44%. (When you take into account that over a third of US houses are owned outright, there is very little equity in the remainder).

Headline Indices

The Dow Jones Industrial Average index (DJI) dropped 196.33 points (2.24%) to 8565.09 points. The index high for the day was 8809.45, while the low was 8512.76.

Total volume traded in the 30 components of the index was 1.08bn shares. Decliners outpaced gainers by 14 to one within the Dow, with 28 decliners to 2 advancers. Declining volume was greater than advancing volume by 1.04bn to 35.91m shares. The main decliners (in percentage terms) were -

JPMorganChase (JPM) -3.58 (10.7%) to $29.94 on volume of 69.96m shares;
Bank Of America (BAC) -1.78 (10.7%) to $14.91 on volume of 106.05m shares;
General Motors (GM) -0.48 (10.4%) to $4.12 on volume of 36.07m shares;
Citigroup (C) -0.73 (8.8%) to $7.57 on volume of 164.35m shares; and
American Express (AXP) -1.43 (6.6%) to $20.13 on volume of 16.04m shares.

The S&P500 index (SPX) slid 25.65 points (2.85%) to 873.59 points. Total volume traded in the 500 components of the index was 4.14bn shares. Decliners outpaced gainers by 7.2 to one, with 424 decliners to 59 advancers. Declining volume was greater than advancing volume by 3.69bn to 368.93m shares. The main decliners (in percentage terms) were -

ProLogis (PLD) -1.82 (24.5%) to $5.6 on volume of 16.57m shares;
Apartment Investment & Mgmt'A' (AIV) -2.65 (20.7%) to $10.15 on volume of 4.35m shares;
Equity Residential (EQR) -7.05 (20.4%) to $27.43 on volume of 12.26m shares;
Developers Diversified Rlty (DDR) -1.27 (20.1%) to $5.04 on volume of 5.98m shares; and
Ciena Corp. (CIEN) -1.51 (20%) to $6.05 on volume of 8.44m shares.

The Nasdaq Composite lost 57.6 points (3.68%) to 1507.88 points and the Nasdaq100 lost 41.92 points (3.43%) to 1180.46 points..

Total volume traded in the 100 components of the Nasdaq100 was 886.54m shares. Decliners outpaced gainers by 15 to one, with 90 decliners to 6 advancers. Declining volume was greater than advancing volume by 811.99m to 50.56m shares. The main decliners (in percentage terms) were -

Cadence Design Systems (CDNS) -0.89 (22.6%) to $3.04 on volume of 21.31m shares;
Liberty Media (LINTA) -0.26 (9.8%) to $2.39 on volume of 4.64m shares;
Ryanair Holdings plc (RYAAY) -2.83 (9.5%) to $26.99 on volume of 1.37m shares;
PACCAR (PCAR) -2.76 (9.4%) to $26.56 on volume of 6.67m shares; and
UAL (UAUA) -0.93 (9%) to $9.43 on volume of 7.32m shares.

Volatility

The CBOE Volatility Index gained +0.05 points (0.09%) to 55.78 points and the CBOE Nasdaq100 Volatility Index dropped 1.76 points (3.27%) to 52.06 points..

Breadth and Internals

A total of 3910 issues traded today on the NYSE; today's total volume was 1.86bn shares. A total of 998 stocks posted gains for the day, and volume in advancing issues totalled 1.11bn shares. Exerting downwards pressure on the index were 2834 losers, which accounted for a total declining volume of 690m shares. 12 stocks made new 1-year highs on the NYSE, while 119 shares plumbed new 52-week depths. [Note - yet again the NYSE volume stats seem wrong to me. It might be time to change data providers]

On the Nasdaq 2957 tickers traded today; total Nasdaq volume was 2.02bn shares. A total of 732 stocks posted gains for the day, with aggregate volume of 230m shares changing hands in the day's winners. The red zone of the Nasdaq exchange comprised 2113 losers, and total declining volume was 1.74bn shares. 4 Nasdaq-listed stocks hit new 52-week highs, while 87 shares dipped to new 1-year lows.

Major Market Statistics
Index	Close	Gain(Loss)	%
Dow Jones Industrial Average	8565.09	-196.33	-2.24%
S&P500 Index	873.59	-25.65	-2.85%
Nasdaq Composite	1507.88	-57.60	-3.68%
Nasdaq100	1180.46	-41.92	-3.43%
CBOE Volatility Index	55.78	+0.05	0.09%
CBOE Nasdaq100 Volatility Index	52.06	-1.76	-3.27%

Dow Darlings

Chevron (CVX) +1.02 (1.3%) to $79.46 on volume of 20.3m units
Johnson & Johnson (JNJ) +0.45 (0.8%) to $58.25 on volume of 15.6m units

Dow Duds:

JPMorganChase (JPM) -3.58 (10.7%) to $29.94 on volume of 70.1m units
Bank Of America (BAC) -1.78 (10.7%) to $14.91 on volume of 106.1m units
General Motors (GM) -0.48 (10.4%) to $4.12 on volume of 36.1m units
Citigroup (C) -0.73 (8.8%) to $7.57 on volume of 164.4m units
American Express (AXP) -1.43 (6.6%) to $20.13 on volume of 16m units

Most Traded Dow stocks:

Citigroup (C) --0.73 (8.8%) to $7.57 on volume of 164.4m units
Bank Of America (BAC) --1.78 (10.7%) to $14.91 on volume of 106.1m units
Microsoft (MSFT) --1.16 (5.6%) to $19.45 on volume of 82.1m units
General Electric (GE) --0.95 (5.3%) to $17.05 on volume of 74.7m units
Intel (INTC) --0.26 (1.8%) to $14.01 on volume of 71.4m units

Precious Metals

Precious metals futures advanced solidly, following the trade logic detailed in December 8th - where it was made clear that "another close above $750 in Gold and the target will be $820-odd" Ta-daaaaaa!

Precious Metals Futures
Index	Close	Gain(Loss)	%
Gold	820.6	11.8	1.46
Silver	10.32	0.12	1.18
Palladium	181.5	-4.25	-2.29
Platinum	837	-3	-0.36

The Gold Bugs index (XAU) slid -0.96 points (0.9%) to 105.47 points. Total volume traded in the 16 components of the index was 182.64m shares. Decliners outpaced gainers by 2.2 to one, with 11 decliners to 5 advancers. Declining volume was greater than advancing volume by 93.92m to 88.72m shares. The main decliners (in percentage terms) were -

AngloGold Ashanti (AU) -1.71 (6.1%) to $26.28 on volume of 3.32m shares;
Coeur d'Alene (CDE) -0.03 (4.5%) to $0.63 on volume of 19.07m shares;
Royal Gold (RGLD) -1.56 (4%) to $37.06 on volume of 0.87m shares;
Kinroos Gold (KGC) -0.64 (3.9%) to $15.67 on volume of 11.7m shares; and
Harmony Gold (HMY) -0.37 (3.6%) to $9.84 on volume of 2.31m shares.

Energy Complex

Energy futures went berserk a little -

Energy Futures
Commodity	Close	Gain(Loss)	%
Crude Oil	47.35	3.83	8.8
Heating Oil	1.4984	0.0957	6.82
Natural Gas	5.561	-0.125	-2.2
Gasoline RBOB	1.0715	0.1028	10.61
Ethanol	1.518	0.036	2.43

The Oil Services index (OSX) dropped -2.23 points (1.78%) to 123.39 points. Total volume traded in the 15 components of the index was 121.02m shares. Decliners outpaced gainers by 4 to one, with 12 decliners to 3 advancers. Declining volume was greater than advancing volume by 85.71m to 35.31m shares. The main decliners (in percentage terms) were -

Nabors Industries (NBR) -0.8 (6.2%) to $12.1 on volume of 8.86m shares;
Weatherford International (WFT) -0.53 (4.8%) to $10.49 on volume of 21.46m shares;
Noble Corp (NE) -1.01 (3.8%) to $25.28 on volume of 6.8m shares;
Rowan Co (RDC) -0.6 (3.7%) to $15.56 on volume of 3.19m shares; and
Cameron International (CAM) -0.76 (3.5%) to $20.77 on volume of 5m shares.

Currency Futures

Currency futures have been doing precisely what we have wanted them to do. Spot USDX is now under 84 - the number below is the futures price.

Currency Futures
Index	Close	Gain(Loss)	%
U.S. Dollar Index	84.405	-1.88	-2.18
Euro FX	1.3282	0.0302	2.33
Swiss Franc	0.8459	0.0073	0.87
Soybeans	856	27	3.26
Australian Dollar	0.6663	0.0159	2.44
Canadian Dollar	0.8105	0.0175	2.21
Japanese Yen	1.0923	0.0094	0.87
New Zealand Dollar	0.5445	0.008	1.49

Bellwethers

The nine-stock group that makes up the Rant bellwethers declined on average by 4.2%. The fallout occurred as follows:

General Electric (GE) -0.95 (5.28%) to $17.05 on volume of 74.65m units.
Citigroup (C) -0.73 (8.8%) to $7.57 on volume of 164.37m units.
Wal-Mart (WMT) -0.22 (0.4%) to $54.79 on volume of 24.73m units.
IBM (IBM) -2.28 (2.75%) to $80.58 on volume of 10.49m units.
Intel (INTC) -0.26 (1.82%) to $14.01 on volume of 71.42m units.
Cisco Systems (CSCO) -0.42 (2.42%) to $16.91 on volume of 55.29m units.
Google (GOOG) -8.6 (2.78%) to $300.22 on volume of 6.09m units.
Fannie Mae (FNM) -0.03 (4.29%) to $0.67 on volume of 27.32m units.
Freddie Mac (FRE) -0.07 (9.33%) to $0.68 on volume of 14m units.

Other Indices of Interest...

The Banks index (BKX) lost -4.19 points (8.96%) to 42.55 points. Total volume traded in the 24 components of the index was 591.6m shares. All 23 stocks in the index fell. The main decliners (in percentage terms) were -

Capital One Financial (COF) -4.23 (13.2%) to $27.85 on volume of 11.35m shares;
National City (NCC) -0.26 (13.1%) to $1.72 on volume of 26.53m shares;
Wachovia (WB) -0.66 (11.6%) to $5.02 on volume of 32.08m shares;
PNC Financial (PNC) -6.04 (11.5%) to $46.65 on volume of 7.05m shares; and
Comerica Inc (CMA) -2.38 (11.4%) to $18.56 on volume of 2.81m shares.

The Semiconductor index (SOX) dipped -5.2 points (2.49%) to 203.37 points. Total volume traded in the 18 components of the index was 229.9m shares. All stocks in the index declined. The worst affected (in percentage terms) were -

Micron Technology (MU) -0.22 (10.6%) to $1.85 on volume of 38.77m shares;
Infineon Tech (IFX) -0.1 (10%) to $0.9 on volume of 2.93m shares;
Teradyne (TER) -0.23 (5.5%) to $3.97 on volume of 2.48m shares;
Marvell Technology (MRVL) -0.31 (4.8%) to $6.19 on volume of 10.29m shares; and
Texas Instruments (TXN) -0.59 (3.8%) to $15.14 on volume of 15.79m shares.

The ChildKiller ("Defence") index (DFX) dipped -7.75 points (3.09%) to 242.71 points. Total volume traded in the 17 components of the index was 108.58m shares. Karma had an up day, with all 17 index components losing value. The main decliners (in percentage terms) were -

Esterline Tech (ESL) -2.8 (8%) to $32 on volume of 0.43m shares;
General Electric (GE) -0.95 (5.3%) to $17.05 on volume of 74.65m shares;
ITT Corporation (ITT) -1.93 (4.4%) to $41.62 on volume of 1.11m shares;
Teledyne Tech (TDY) -1.62 (3.9%) to $39.4 on volume of 0.3m shares; and
Lockheed Martin (LMT) -2.99 (3.8%) to $76.2 on volume of 4.1m shares.

Thursday, December 11, 2008

USRant: Political Theatre...