Friday, June 26, 2009

Market wrap - 4:30PM

Pretty dull day today for the most part. Maybe many are afraid to stick their toe in the casino. Dow 8,438.39 -34.01 (-0.40%) S&P 500 918.90 -1.36 (-0.15%) Nasdaq 1,838.22 +8.68 (0.47%) Gold 941 +2 +0.16% Oil 69.34 -1.07 -1.52% Today by sector: The financials win AGAIN! Shocked, just shocked I tell ya'. Today's heatmap:
I'm going out on a limb here, and make a prediction. Next Tuesday is the last day of the quarter/half. This is also the date where many people retirement deadline is set. That meaning, they have until Tuesday (or a day before)to enter their choices for how they want to invest. Many plans I know of let you change your risk and plans on a quarterly or bi-annually. Next Tuesday is the date. What happens then? The guess of this blogger is the market will go down. How far and how fast, I don't know, but the general direction is down. How low? Not sure, we have two things that are in a fistfight - the truth, and the government. The truth of the matter is, the economy, not only here, but all over the world, is not good at all. Despite the slight up ticks (or the second derivative - rate of change), the reports we see (and you can read them, many I post here)are not very good. You must remember the people on CNBC only give us the headline numbers. You must dig into the reports, sometimes not too far, to find the real truth. Housing, retail,GDP,what some consider to be the next big shoe to drip, Commerical Real Estate (CRE), and above all JOBS - are not good. That is the truth part of the equation. On the other side you have the government and the banks. Who will get saved and who will get screwed. Fundamentals don't matter any more, and probably haven't for quite some time. This is a casino - cash is a position - and rationality has left the building. The road to economic prosperity and will be driven by I-phones, coffee, and some other stocks that make no sense. Bernanke is in front of congress having an "I can't recall" recital, while the administration might be happy to put Larry Summers in his place. Either way, the FED chair will be the most powerful force in how the dollar, bond curves, and securities will fare. It will be an interesting and probably entertaining next few quarters. Safe trading.

Pre-market - June 26, 2009

Futures down a little before open: DJIA INDEX 8,398.00 -16.00 S&P 500 915.10 -1.50 NASDAQ 100 1,470.50 -2.50 Gold 940 5 0.55% Oil 70.26 -0.03 -0.04% Today's economic calendar: Personal Income and Outlays 8:30 AM ET Consumer Sentiment 9:55 AM ET Today's earnings reports: AZZ,GBR, KHB,LGDY, SJR All before market opens

Thursday, June 25, 2009

Market wrap - 4:10PM

Quite the day in the market. Dow 8,472.77 +172.91 (2.08%) S&P 500 920.26 +19.32 (2.14%) Nasdaq 1,829.54 +37.20 (2.08%) Gold 940 +5 +0.55% Oil 70.33 1.56 2.27% Today's leaders by sector: Today's heatmap (check out the obscure shit that made this go up today).
This was a bizarre day. Futures flat before open, then dropped considerably once the jobs and GDP came out. Then, once the casino opened, it shot off like a rocket. All the while, Bernanke was in process lying, and "I don't recall"ing to congress. Of course the shill on CNBC did their best at making him out to be a hero. Nice. The market sold off a bit after the testimony, only to rip almost straight up at the close. How many times have we seen that? Amazing. Free market my ass.

Jobless claims - 10:40AM

Full report here UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT SEASONALLY ADJUSTED DATA In the week ending June 20, the advance figure for seasonally adjusted initial claims was 627,000, an increase of 15,000 from the previous week's revised figure of 612,000. The 4-week moving average was 617,250, an increase of 500 from the previous week's revised average of 616,750. The advance seasonally adjusted insured unemployment rate was 5.0 percent for the week ending June 13, unchanged from the prior week's unrevised rate of 5.0 percent. The advance number for seasonally adjusted insured unemployment during the week ending June 13 was 6,738,000, an increase of 29,000 from the preceding week's revised level of 6,709,000. The 4-week moving average was 6,759,750, a decrease of 3,250 from the preceding week's revised average of 6,763,000. The fiscal year-to-date average for seasonally adjusted insured unemployment for all programs is 5.333 million. UNADJUSTED DATA The advance number of actual initial claims under state programs, unadjusted, totaled 566,586 in the week ending June 20, an increase of 8,548 from the previous week. There were 358,159 initial claims in the comparable week in 2008. The advance unadjusted insured unemployment rate was 4.6 percent during the week ending June 13, an increase of 0.1 percentage point from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 6,098,083, an increase of 19,737 from the preceding week. A year earlier, the rate was 2.1 percent and the volume was 2,852,599. Extended benefits were available in Alaska, Arizona, Arkansas, California, Colorado, Connecticut, the District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nevada, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, Vermont, Virginia, Washington, and Wisconsin during the week ending June 6. Initial claims for UI benefits by former Federal civilian employees totaled 1,832 in the week ending June 13, a decrease of 149 from the prior week. There were 1,914 initial claims by newly discharged veterans, an increase of 38 from the preceding week. There were 16,744 former Federal civilian employees claiming UI benefits for the week ending June 6, an increase of 829 from the previous week. Newly discharged veterans claiming benefits totaled 27,850, a decrease of 697 from the prior week. States reported 2,429,772 persons claiming EUC (Emergency Unemployment Compensation) benefits for the week ending June 6, an increase of 70,235 from the prior week. EUC weekly claims include both first and second tier activity. The highest insured unemployment rates in the week ending June 6 were in Michigan (7.0 percent), Oregon (6.8), Puerto Rico (6.7), Nevada (6.3), Pennsylvania (6.2), Wisconsin (5.7), California (5.4), Arkansas (5.3), Illinois (5.3), and North Carolina (5.3). The largest increases in initial claims for the week ending June 13 were in Florida (+8,383), Pennsylvania (+3,191), Missouri (+2,874), Puerto Rico (+2,561), and California (+2,540), while the largest decreases were in Michigan (-5,414), New York (-5,299), North Carolina (-4,714), Tennessee (-4,414), and Ohio (-3,802).
Green shoots? I think not, and neither does the futures who dropped after these two reports

GDP report - 8:34AM

Full GDP report here Gross Domestic Product, 1st quarter 2009 (final) Corporate Profits, 1st quarter 2009 (final) Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- decreased at an annual rate of 5.5 percent in the first quarter of 2009, (that is, from the fourth quarter to the first quarter), according to final estimates released by the Bureau of Economic Analysis. In the fourth quarter, real GDP decreased 6.3 percent. The GDP estimates released today are based on more complete source data than were available for the preliminary estimates issued last month. In the preliminary estimates, the decrease in real GDP was 5.7 percent (see "Revisions" on page 3). The decrease in real GDP in the first quarter primarily reflected negative contributions from exports, equipment and software, private inventory investment, nonresidential structures, and residential fixed investment that were partly offset by a positive contribution from personal consumption expenditures (PCE). Imports, which are a subtraction in the calculation of GDP, decreased.

Pre-market June 25, 2009

Future flat today before the jobs and GDP number. Economic calendar for today: GDP 8:30 AM ET Jobless Claims 8:30 AM ET Corporate Profits 8:30 AM ET Ben Bernanke Speaks 10:00 AM ET EIA Natural Gas Report 10:30 AM ET 3-Month Bill Announcement 11:00 AM ET 6-Month Bill Announcement 11:00 AM ET 52-Week Bill Announcement 11:00 AM ET 7-Yr Note Auction 1:00 PM ET Money Supply 4:30 PM ET Today's earnings reports: Before market opens in BOLD

Wednesday, June 24, 2009

FED statement - 2:17PM

Full link here Release Date: June 24, 2009 For immediate release Information received since the Federal Open Market Committee met in April suggests that the pace of economic contraction is slowing. Conditions in financial markets have generally improved in recent months. Household spending has shown further signs of stabilizing but remains constrained by ongoing job losses, lower housing wealth, and tight credit. Businesses are cutting back on fixed investment and staffing but appear to be making progress in bringing inventory stocks into better alignment with sales. Although economic activity is likely to remain weak for a time, the Committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth in a context of price stability. The prices of energy and other commodities have risen of late. However, substantial resource slack is likely to dampen cost pressures, and the Committee expects that inflation will remain subdued for some time. In these circumstances, the Federal Reserve will employ all available tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. As previously announced, to provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of up to $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt by the end of the year. In addition, the Federal Reserve will buy up to $300 billion of Treasury securities by autumn. The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. The Federal Reserve is monitoring the size and composition of its balance sheet and will make adjustments to its credit and liquidity programs as warranted. Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Donald L. Kohn; Jeffrey M. Lacker; Dennis P. Lockhart; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen. 2009 Monetary Policy Releases

Crude oil report - 10:30AM

Distillate inventories rise 2.1 million barrels Gasoline inventories rise 3.9 million barrels U.S. crude inventories fall 3.8 million barrels

New home sales - 10:05PM

NEW RESIDENTIAL SALES IN MAY 2009 - Full report here Sales of new one-family houses in May 2009 were at a seasonally adjusted annual rate of 342,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 0.6 percent (±17.8%)* below the revised April rate of 344,000 and is 32.8 percent (±10.9%) below the May 2008 estimate of 509,000. The median sales price of new houses sold in May 2009 was $221,600; the average sales price was $274,300. The seasonally adjusted estimate of new houses for sale at the end of May was 292,000. This represents a supply of 10.2 months at the current sales rate.

Durable goods report - 8:35AM

HIGHLIGHTS FROM THE ADVANCE REPORT ON MANUFACTURERS' SHIPMENTS, INVENTORIES, AND ORDERS - Full report here New Orders New orders for manufactured durable goods in May increased $2.8 billion or 1.8 percent to $163.9 billion, the U.S. Census Bureau announced today. This was the third increase in the last four months and followed a 1.8 percent April increase. Excluding transportation, new orders increased 1.1 percent. Excluding defense, new orders also increased 1.4 percent. Shipments Shipments of manufactured durable goods in May, down ten consecutive months, decreased $3.6 billion or 2.1 percent to $169.9 billion. This was the longest streak of consecutive monthly decreases since the series was first published on a NAICS basis in 1992 and followed a 0.5 percent April decrease. Unfilled Orders Unfilled orders for manufactured durable goods in May, down eight consecutive months, decreased $2.0 billion or 0.3 percent to $747.5 billion. This followed a 1.1 percent April decrease. Inventories Inventories of manufactured durable goods in May, down five consecutive months, decreased $2.5 billion or 0.8 percent to $323.3 billion. This followed a 1.1 percent April decrease. Capital Goods Industries Nondefense Nondefense new orders for capital goods in May increased $4.9 billion or 10.0 percent to $53.8 billion. Defense Defense new orders for capital goods in May increased $0.8 billion or 7.4 percent to $12.0 billion.

Pre-market - Wednesday, June 24, 2009

Futures up slightly this morning, before the durable goods report and the housing data: DJIA INDEX 8,297.00 40.00 S&P 500 895.00 4.80 NASDAQ 100 1,428.75 4.75 Gold 924 3 0.36% Oil 68.42 -0.79 -1.14% Today's economic calendar: MBA Purchase Applications 7:00 AM ET Durable Goods Orders 8:30 AM ET New Home Sales 10:00 AM ET EIA Petroleum Status Report 10:30 AM ET 5-Yr Note Auction 1:00 PM ET FOMC Meeting Announcement 2:15 PM ET Today's earnings reports:

Tuesday, June 23, 2009

Is this CNBC or Jerry Springer? 5:34PM

This was a report from the CNBC crew on the trade war. It starts out ok, but by the end, it turns into a typical CNBC shouting match. This gets so silly, it became funny enough to keep watching.

Market wrap - 4:10PM

Very slow and uneventful day on the Street. The final numbers: Dow 8,322.83 -16.18 (-0.19%) S&P 500 895.09 +2.05 (0.23%) Nasdaq 1,764.92 -1.27 (-0.07%) Gold 924 +3 +0.36% Oil 69.20 1.74 2.58% Today by sector: The fall of the dollar today had an impact on the Basic Materials. Today's heatmap:
The news today was little or none at all. CNBC did not cover the Redbook report at all. It wasn't good, which might explain why they didn't. They also reported on many occasions how the 2 year bond auction went so well. Big friken deal - it's two year auction. Let's see how the 5 year goes tomorrow, or the ones on the longer end of the curve. With the dollar down, oil and commodity stocks went up. If that wouldn't have happened, the market would probably been down significantly again. Cisco earning after the close appear to be good, which might rally the NASDAQ tomorrow, if the housing data doesn't rain on that parade. Important info at 8:30 tomorrow will be Durable Goods report, and then New Home Sales at 10:00AM.

Pre-market - Tuesday, June 23,2009

Futures up a little this morning: DJIA INDEX 8,311.00 28.00 S&P 500 892.40 3.80 NASDAQ 100 1,432.00 4.00 Gold 921 -15 -1.62% Oil 67.61 0.11 0.16% Today's economic calendar: FOMC Meeting Begins ICSC-Goldman Store Sales 7:45 AM ET Redbook 8:55 AM ET Existing Home Sales 10:00 AM ET State Street Investor Confidence Index 10:00 AM ET 4-Week Bill Auction 11:30 AM ET 2-Yr Note Auction 1:00 PM ET Today's earnings reports: Before market opens in BOLD

Monday, June 22, 2009

Market wrap - 4:10PM

Not a good day (depending on how you played it) today. All index's significantly lower: Dow 8,339.01 -200.72 (-2.35%) S&P 500 893.10 -28.13 (-3.05%) Nasdaq 1,766.19 -61.28 (-3.35%) Gold 921 -15 -1.62% Oil 66.93 -2.62 -3.77% Today by sector: Notice the banks and commodity's didn't do so good. Are the green shoots turning into weeds? About damn time - this rally has been a scam from the beginning. Today's heatmap:
It was a pleasure to watch the CNBC cheerleaders today (while not watching the US Open - congrats to Glover)try to spin this puppy. They talked profit taking, the World Bank report over the weekend, and the housing report (below) as reasons. But as any of us know that do our DD, this market was way overbought based on the fundamentals beneath it. It's really this simple - you invest in profitss - and there are very few companies making significant profits right now. The truth is, many are losing money, and will continue to do so because everyone is cutting back, paying off debt, and trying to save money. The picture is not good, nor does it look to be any better in the near future. Anyone who tells you differently have been smoking those green shoots.

MBA Lowers 2009 Originations Forecast To $2.03 Trillion - 3:30PM

MBA Lowers 2009 Originations Forecast To $2.03 Trillion Washington, DC (June 22, 2009) — The Mortgage Bankers Association today lowered its forecast of mortgage originations in 2009 to $2.03 trillion, a drop of over $700 billion from its March forecast. $84 billion of the drop is due to lower purchase originations and the rest is due to lower rate/term refinancings and very low volumes in the Fannie Mae and Freddie Mac Home Affordable Refinance Program (HARP). MBA is now forecasting $737 billion in purchase originations and $1,297 billion in refinance originations. In announcing the drop in the forecast, MBA’s Chief Economist Jay Brinkmann issued the following statement: “In March we boosted our forecast of mortgage originations by over $800 billion following the drop in interest rates associated with the Federal Reserve’s announcement on the Treasury bond and mortgage-backed securities (MBS) purchases programs as well as the implementation of HARP. We warned at the time that with the billions in Treasury securities that would be issued to finance record budget deficits and with the Fed expected to purchase only a portion of those Treasury securities, how long rates stayed low would depend on whether other investors stayed in the market. If other investors shied away from Treasuries due to expectations of future inflation and the declining value of the dollar, the effect on rates would be more short-lived and our mortgage originations forecast would prove too optimistic. That has proven to be the case. “While the Fed has been successful in reducing the spread between conforming mortgage and Treasury rates through its purchase of agency MBS, it has not been successful in maintaining lower Treasury yields. Since March, the Federal Reserve purchases have equaled approximately 85% of new MBS issuance for Fannie Mae, Freddie Mac and Ginnie Mae combined. In contrast, Federal Reserve purchases of long-term Treasuries equaled about 50% on new issuance during that same three month period. Given the high issuance volume of Treasuries in June, the Fed is likely approaching its self-imposed ceiling of $300 billion and may be reluctant to increase its current commitment to purchase long-term Treasuries for two reasons. First, Fed officials have made public statements about their outlook for an improving economy. Second, the Fed may have decided that its purchases may not be efficacious in maintaining lower long-term Treasury rates and may not be worth the risks entailed in building up a large Fed balance sheet that will need to be reduced at some future point. “The March increase in refinance originations was driven by two factors. The first factor was the drop in interest rates. The subsequent increase in interest rates, however, began to choke off the refinance wave in May, much earlier than anticipated in the March forecast. The second factor was the large volume of loans expected from HARP. While generally accepted estimates were that around 1.5 to 2 million borrowers might avail themselves of this program, with many more potentially eligible, to date only about 13,000 loans have been completed according to press reports. While the number of loans completed under this program is likely to increase, it is difficult to craft a scenario under which origination volumes would come anywhere close to reaching the numbers originally envisioned for the program, particularly under our higher rate environment. “MBA had estimated that purchase mortgage originations in 2009 would be $821 billion. We have now lowered this to $737 billion for several reasons. First, while home sales have been higher than expected, home prices have fallen more than expected leading to smaller loans. Second, the large share of distressed sales or homes purchased by investors has resulted in the share of all cash home purchases being higher than normal. Therefore, even with higher projected home sales for all of 2009, the projected lower average home price and higher cash share have combined to lower projected volume of purchase originations. “MBA now projects that total existing home sales for 2009 will be 4.8 million units, a drop of 1.2 percent from 2008. MBA projects new home sales will be 352,000 units, a decline of about 27 percent from 2008. Median home prices for new and existing homes will likely continue to fall, dropping by about ten percent from 2008 levels, but leveling off in 2010 as the economy improves. “There are several schools of thought about where long-term interest rates are headed. One school holds that continued anemic growth and high unemployment will combine to hold down inflation and the demand for debt. The increase in government debt has been partially offset by declines in other forms of debt, especially mortgage and other consumer debt. The result will be long-term interest rates at approximately current levels through the end of 2010. Another school of thought holds that the large increases in federal debt will put tremendous pressure on domestic and international investors to absorb this debt, and that the large increases in the money supply and declines in the dollar could trigger inflation, all leading to higher rates. The MBA forecast is for increasing rates through the end of the year and through 2010. Adding to the pressure for higher long-term Treasury yields is the notion that, at some point, the Fed has to withdraw the substantial liquidity it has injected into the financial markets to keep a lid on expected inflation. On the other hand, a resumption of a flight to quality, induced by political unrests around the globe or a renewed financial crisis, could cause long-term Treasury yields to reverse their course.” Full report here

Pre-market - Monday, June 22, 2009

Futures down a bit this morning: DJIA INDEX 8,419.00 -57.00 S&P 500 908.40 -7.30 NASDAQ 100 1,453.00 -11.00 Gold 936 2 0.17% Oil 68.34 -1.21 -1.74% Today's economic calendar: 4-Week Bill Announcement 11:00 AM ET 3-Month Bill Auction 1:00 PM ET 6-Month Bill Auction 1:00 PM ET Today's earnings reports: SWHC - TYN - WAG