USRant: False Alarm...

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

Well, lucky that the standard Rant intraday target (100 Dow points or its index equivalent) was achieved yesterday. I mentioned in today's OzRant that the markets are coiling for a rebound. Today's US session was NOT - repeat, NOT - the start of that rebound. Anyone who goes long on the back of today's US session is going to wind up wearing their colon around their neck. 

A big shout out to the Echos who have started to stand up regarding waterboarding (and about torture in general). 

Sure, they're only enlisted men, but 97E is a grade where you're the guy getting your hands wet (if you accept the assignment) and to hear some Echos sounding off is very heartening.

Economic News

Aaaah, Economics... it's a primary love of mine (along with small arms, light infantry tactics, and missiles), but frankly the less you know about it the better (from a trading perspective). For a start the statistics now being produced by the US government would make Orwell explode, and H.L. Mencken (never shy in saying "I told ya so") would be saying "I told ya so". So let's get this over with fast.

Today's stats:

• Retail Sales rose 0.3%, confounding the consensus guess which looked for a decline. Once motor vehicles were removed, the number was magically the same. but the main increase was in fuel and energy expenditures... if there was a "Core" retail sales number (excluding food and energy) it would have fallen.
• Business inventories rose 0.6%, slightly lower than the expert guess. Big deal. Means nothing.
• Crude Oil inventories rose 1.07 million barrels.

Fed Open Market Operations

The Fed did one repurchase operation - a $9.75 billion 1-day repo, of which $5.384 billion was in Treasury-backed collateral; the repurchase was at a 12.3 basis point discount to Fed Funds... that's a fair discount, and a relatively large slab of repo dough, too.

Headline Indices

The Dow Jones Industrial Average advanced +178.83 points (1.45%) to 12552.24 points. No real catalyst - just a little flowover from the recent soothing noises being made by that woeful failure bush and his coterie of depressingly stereotypical cronies. 

The index high for the day was 12573.13, set just before the close. The low was 12367.80, set just after 10:30 a.m. NY time..

Major Advancers in the Dow were

• Alcoa (AA) +2.02 (6.03%) to 35.51 on volume of 19.9 million units
• American Express (AXP) +1.77 (3.93%) to 46.85 on volume of 9.1 million units
• AT&T (T) +1.16 (3.09%) to 38.67 on volume of 30.2 million units
• Verizon (VZ) +1.10 (2.93%) to 38.66 on volume of 21.2 million units
• 3M (MMM) +2.28 (2.88%) to 81.38 on volume of 3.1 million units

Major Decliners in the Dow were

• Amer Intl Group (AIG)  -0.62 (1.34%) to 45.52 on volume of 29.4 million units
• Coca Cola  (KO) -0.53 (0.88%) to 59.39 on volume of 12.6 million units
• Procter Gamble (PG) -0.16 (0.24%) to 67 on volume of 9.3 million units
• Home Depot (HD) -0.04 (0.14%) to 28.34 on volume of 9.4 million units
• Du Pont (DD) -0.05 (0.11%) to 46.66 on volume of 5 million units

Most Traded Dow stocks were

• Citigroup (C) + 0.13 (0.5%) to 26.34 on volume of 89.4 million units
• Microsoft (MSFT) + 0.62 (2.19%) to 28.96 on volume of 87 million units
• Intel (INTC) + 0.31 (1.48%) to 21.21 on volume of 48.3 million units
• Pfizer (PFE) + 0.06 (0.26%) to 22.74 on volume of 35.1 million units
• General Electric (GE) + 0.61 (1.77%) to 34.98 on volume of 32.1 million units

The S&P500 Index advanced 18.35 points (1.36%) to 1367.21 points. The Nasdaq Composite climbed 53.89 points (2.32%) to 2373.93 points, and the Nasdaq100 launched to the tune of 42.46 points (2.38%) to 1823.00 points.

The CBOE Volatiity Index lost 1.55 points (5.89%) to 24.78 points and the CBOE Nasdaq100 Volatilty Index lost 3.01 points (10.67%) to 25.21 points. The index high for the day was 27.30, while the low was 24.88.

NYSE Total Volume totalled 3.69billion units; Nasdaq Total Volume totalled 2.17billion units.

Major Market Statistics
Index	Close	Gain(Loss)	%
Dow Jones Industrial Average	12552.24	+178.83	1.45%
S&P500 Index	1367.21	+18.35	1.36%
Nasdaq Composite	2373.93	+53.89	2.32%
Nasdaq100	1823.00	+42.46	2.38%
CBOE Volatiity Index	24.78	-1.55	-5.89%
CBOE Nasdaq100 Volatilty Index	25.21	-3.01	-10.67%
NYSE Total Volume	3.69bn	-	-
Nasdaq Total Volume	2.17bn	-	-

Precious Metals

Precious metals futures were mixed: the nuffnuffs keep gtting their heads slapped whenever Gold climbs above $925 an ounce, and the small long side of the platinum market is ripe for gutting.

Precious Metal Futures
Index	Close	Gain(Loss)	%
Gold	908.3	-2.8	-0.31
Silver	1729.5	+4.5	0.26
Platinum	1980.0	+58.2	3.03
Palladium	436.90	+5.40	1.25

Energy Complex

Energy futures have sort of lost interest - I notice that small long interest is waning a little, which should set the stage for another move up pretty soon. -

Energy Futures
Index	Close	Gain(Loss)	%
Crude Oil	93.25	+0.47	0.51
Heating Oil	2.6170	+0.0259	1
Gasoline RBOB	2.3900	+0.0220	0.93
Natural Gas	8.389	-0.047	-0.56
Ethanol	2.100	unch	0

Bellwethers

The nine-stock group that makes up the Rant bellwethers advanced on average by 1.7%. The fallout occurred as follows:

• General Electric (GE) up $+0.61 (1.77%) to $34.98 on volume of 32.12 million units.
• Citigroup (C) up $+0.13 (0.5%) to $26.34 on volume of 89.4 million units.
• Wal-Mart (WMT) up $+0.41 (0.82%) to $50.66 on volume of 15.21 million units.
• IBM (IBM) up $+1.89 (1.77%) to $108.42 on volume of 5.07 million units.
• Intel (INTC) up $+0.31 (1.48%) to $21.21 on volume of 48.29 million units.
• Cisco Systems (CSCO) up $+0.63 (2.69%) to $24.06 on volume of 63.65 million units.
• Google (GOOG) up $+16.53 (3.19%) to $534.62 on volume of 6.33 million units.
• Fannie Mae (FNM) up $+1.02 (3.35%) to $31.47 on volume of 9.97 million units.
• Freddie Mac (FRE) down $0 (0%) to $29.15 on volume of 8.83 million units.

Currency Futures
Index	Close	Gain(Loss)	%
U.S. Dollar Index	76.530	+0.080	0.1
British Pound	1.9609	+0.0029	0.15
Canadian Dollar	1.0017	+0.0034	0.34
Japanese Yen	0.9264	-0.0074	-0.79
Swiss Franc	0.9030	-0.0048	-0.53
Euro FX	1.4564	-0.0015	-0.1
Australian Dollar	0.8920	-0.0086	-0.95
New Zealand Dollar	0.77940	-0.0083	-1.05

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USRant: What's That Burning Smell?

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

Although I have not yet finished preparing the proper version of the USRant for 2008, today was interesting enough to encourage me to crank out some 'scheizola' (as Jim Dunn used to call it) for the Yank markets.

Imaginez-vous... before the open, futures were up a tad, and as a result places like Bloomberg were babbling on about the market rising in anticipation of the ISM (formerly NAPM) manufacturing Index and the Fed minutes... waxing lyrical... for the sole reason that the futures were already green.

Then the ISM survey came in much weaker than expected - at 46-and-a-bit as opposed to expectations of 52-and-a-bit. (As if anybody ought to give a flying crap about the ISM survey - it correlates with nothing whatsoever in the real economy).

Anyhow, anything that falls short of expectations causes coniptions in the post-CreditCrunch markets (before you mount your keyboard, I do not believe we are 'post'-Credit Crunch... but the entire MainSwamp is trying to give the impression that it was all in subprime mortgages, and that it's over).

Once the ISM number stank, bond markets spiked upwards - and some time later I pointed out as an afterthought that the 10 and 30-year bonds ought to be shorted sometime between now and Friday. Thereafter, the bond softened a tad, but firmed in late trading... it's still a screaming short, because every man and his dog is long the stupid thing, thinking that people no longer require compensation for inflation risk, when they're investing money for a 30-year period.

The Fed minutes were the usual pointless waste of ink and manpower - blah blah things are surprisingly weak... "surprising"? In a world where the government has poured money into the sands of the Middle East as if money was the blood of Iraqi children? Where's the surprise, when the US government is spending like a sailor on crack? When the US dollar index is the victim of the now-global mistrust of a profligate government?

Oddly enough, the Fed did not pump vast amounts of repo crack into the banking system in anticipation of the misery-laden ISM numbers (the Fed knows about economic stats beforehand, don't kid yourself). No, the Fed only pumped in a lousy $2.69 billion in Treasury-backed overnight repurchase agreements: the rest of the $14.25 billion repurchase operation was primarily in Mortgage-backed ($5.37 billion) and Agency-backed ($6.19 billion) - consistent with the near-terminal condition of (a) the mortgage market; and (b) agencies like Fannie Mae and Freddie Mac, which are both hollower than the US Social Security Trust Fund (which has been completely emptied by government borrowing, off-the-accounts).

The Dow kept falling throughout the session - punctuated only by the release of the aforementioned Fed minutes. it was the standard "move 50, try to stabilise, drop another 50, try to stabilise, bounce 50, stop in your tracks... " and so on until the market was looking 13000 in the face (having opened above 13250). And of course the bounce between the 'tease break' of 13000 and the close was... wait for it... yep you guessed it, 50 points. In 20 minutes. Then it dropped 25 points... in four minutes.

Gold broke its all-time (nominal) record high during the session; Oil broke the $100 mark (also a nominal record) during the session; a move back above 1.48 in the Euro (not yet happened) would herald 1.5000 and 1.6000 in weeks; the US Dollar Index still has a 75 handle...does that look like a global vote of confidence as far the US is concerned? I point out also that all of these things were the subject of prior Rants... 

By the close, the Dow was showing a fall of just over 220 points (1.67%) at 13046.6. Only one Dow component rose - Pfizer (PFE, +0.17 to $22.90 on volume of 38.7 million shares), while the average fall in the other 29 components was almost 2%. Needless to say, declining volume in Dow stocks swamped advancing volume - to such a ludicrous extent that I can't be bothered doing the calculation.

The broader S&P 500 Index dropped 21.19 points (1.44%); quite a bit better than the Dow. Like the Dow, advancing volume in S&P components was absolutely swamped by declining volume. 

The volume skews were almost to the extent that a decent contrarian would buy the after-market in the S&P futures just for a punt at a pop-recovery (say, five or six futures points). To be honest though, the longer-term RantLook for the US is so staggeringly negative that for the present I am not remotely interested in trying to scalp a bit of a pop after an awful day.

The Nasdaq Composite and Nasdaq100 indices fell about the same percentage as the Dow (NComp -42.65 (1.61%) to 2609.63 ; NDX -35.22 (1.69%) to 2049.70). It is surprising that the Nasdaq indices held up as well as they did relative to the Dow, since the Dow's Energy components (XOM in particular) were somewhat insulated by the pop in oil prices.

As I mentioned earlier today, the "full works and jerks" version of the USRant will be up and running sometime tomorrow (US/European time). As I have now introduced a ludicrous requirement for spell-checking it is not a given that the USRant will be available within a half-hour of the close (as this one was), but it will certainly be available well before the Oz market open.

And it will have tables, which are obviously missing from this "USRant Lite".