Monday, December 12, 2011

Stocks Falling into Final Hour on Rising Eurozone Debt Angst, Rising Global Growth Fear, Earnings Jitters, Technical Selling

Broad Market Tone:

  • Advance/Decline Line: Substantially Lower
  • Sector Performance: Every Sector Declining
  • Volume: Light
  • Market Leading Stocks: Performing In Line
Equity Investor Angst:
  • VIX 27.18 +3.03%
  • ISE Sentiment Index 88.0 -42.48%
  • Total Put/Call .88 -26.05%
  • NYSE Arms 2.66 +407.97%
Credit Investor Angst:
  • North American Investment Grade CDS Index 126.02 +2.79%
  • European Financial Sector CDS Index 305.84 +8.4%
  • Western Europe Sovereign Debt CDS Index 381.17 +3.76%
  • Emerging Market CDS Index 304.43 +3.49%
  • 2-Year Swap Spread 45.0 +2 bps
  • TED Spread 54.0 unch.
  • 3-Month EUR/USD Cross-Currency Basis Swap -127.75 -2.25 bps
Economic Gauges:
  • 3-Month T-Bill Yield .00% unch.
  • Yield Curve 179.0 -4 bps
  • China Import Iron Ore Spot $138.30/Metric Tonne -.86%
  • Citi US Economic Surprise Index 77.80 -.2 point
  • 10-Year TIPS Spread 2.05 +2 bps
Overseas Futures:
  • Nikkei Futures: Indicating -125 open in Japan
  • DAX Futures: Indicating -1 open in Germany
  • Slightly Lower: On losses in my tech, biotech and medical sector longs
  • Disclosed Trades: Added to my (IWM)/(QQQ) hedges and to my (EEM) short, then covered some
  • Market Exposure: Moved to 50% Net Long
BOTTOM LINE: Today's overall market action is bearish, as the S&P 500 rolls over again near its 200-day moving average on rising Eurozone debt angst, rising global growth fears, some earnings jitters, technical selling, profit-taking, more shorting and high energy prices. On the positive side, Restaurant shares are just slightly lower on the day. Oil is falling -1.8% and gold is down -2.7%. On the negative side, Coal, Alt Energy, Oil Tankers, Energy, Oil Service, Steel, Semi, Networking, Bank, I-Banking and Construction shares are under substantial pressure, falling more than -3.0%. (XLF) has traded poorly throughout the day. Cyclical and small-cap shares are underperforming. Copper is falling -2.94% and Lumber is dropping -4.2%. The 10-year yield is falling -4 bps to 2.02%. The Italy sovereign cds is rising +5.6% to 564.0 bps, the France sovereign cds is jumping +9.54% to 229.17 bps, the German sovereign cds is gaining +4.96% to 103.83 bps, the Spain sovereign cds is surging +6.2% to 448.67 bps, the Russia sovereign cds is gaining +5.8% to 277.67 bps, the Belgium sovereign cds is climbing +5.33% to 333.33 bps and the UK sovereign cds gaining +4.68% to 101.0 bps. The Western Europe Sovereign CDS Index made a new all-time high today. The TED spread continues to trend higher and is at the highest since June 2009. The 2Y Euro Swap Spread is near the highest since Nov. 2008. The 3M Euribor-OIS spread is the highest since February 2009. The 3M EUR/USD Cross-Currency Basis Swap is falling -4.4% to -127.75 bps(back to late-Nov. levels). The Libor-OIS spread is very near the widest since May 2009, which is also noteworthy considering the equity surge off the recent lows. China Iron Ore Spot has plunged -27.9% since February 16th and -23.6% since Sept. 7th. The Citi Asia-Pacific Economic Surprise Index fell -8.5 points today to -25.30, which is the worst since April 2009. Asian equities continue to trade very poorly. India shares fell -2.1% and are now down -22.6% ytd. The Shanghai Composite broke down to the lowest level since March 2009 overnight and is now down -18.4% ytd. Major European equities fell 2-3.75% today, led lower by Italian shares which plunged -3.8% and are now down -26.2% ytd. European credit gauges are still performing very poorly given that the European debt crisis “can-kicking” solution is supposedly at hand. Equity index volume remains light and trading has an overall complacent feel given the action overseas, which is likely related to year-end window-dressing. The short-term rally I had expected on the perceived Eurozone "solution" may now occur from lower levels. I still remain very cautious on the intermediate-term. I expect US stocks to trade mixed-to-higher into the close from current levels on short-covering, seasonality and investor performance angst.


Anonymous said...

The Iranian Army Says It Will 'Practice' Shutting Down The Strait Of Hormuz

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theyenguy said...

In my blog article, A Bank Run Is Rumored To Be Underway In Latvia … Will Eurozone Banks Be Nationalized Soon?, I wrote, An inquiring mind asks, will the global banks seen in this Finviz Screener, be nationalized?

Will they become known as government banks, or gov banks for short.

Elliott Wave International asks What Is Backing Your Deposit In The bank?

In the age of deleveraging the only forms of sovereign wealth will be diktat and gold bullion

Neoliberalism featured inflationism that came from ponzi lending of all types such as GSE lending, HELOC lending, and copper commodity funded shadow lending in the city Wenzhou China.

Now with rise of sovereign and banking insolvency in the EU, as well as an exhaustion of credit expansion globally, especially the pricking of the global government finance bubble, deflationism is commencing, and that is introducing Neoauthoritarianism features the seigniorage of diktat, such as the introduction of a fiscal union in the EU, and the appointment of technocratic government in the profligates.

Out of Mediterranean Sea countries, the Beast regime of regional global governance, and statism, is rising globally. This monster has seven heads, symbolic of its occupation in mankind’s seven institutions, and ten horns, symbolic of its rule in all of the world’s ten regions.

The Beast regime is also known as the Ten Toed Kingdom of regional global governance. Fate is passing the baton of sovereignty from nation states to regional authorities such as the EU ECB and IMF troika. The 1974 Clarion Call of the Club of Rome for regional economic government is delivering sovereign authority out of nation states and into the regional authorities as Leaders meet in summits and waive national sovereignty and announce regional framework agreements such as the December 9, 2011 EU Leaders’ Fiscal Compact, designed by Herman van Rompuy, which establishes a Eurozone Fiscal Union

Charles Hugh Smith writes in Zero Hedge When Things Fall Apart: Disorientation, Desperation, Chaos

Yet, fate will bring forth a resolution of the crisis and an even deeper eurozone integration. A credible sovereign stands in the wings. He and his banking partner will come to rule a united Europe through yet another and even more powerful stability compact than the signed December 9, 2011; and this superior fiscal compact will be never, ever, be voted on. At the appointed time, not any human action, but rather, fate will open the curtains, and onto the Europe’s stage will step the Europe’s New Charlemagne and his Banking Partner.

These sovereigns will develop the Eurzone into a type of authoritarian revived Roman Empire. These sovereigns, and their committee will be Europe’s financial supervisor, and will oversee the seigniorage of diktat. Their word, will and way of will provide a new moneyness, and the people will be amazed and follow after it, placing their confidence and trust in it, giving it their full allegiance. A ten toed kingdom of regional global governance is rising to displace the two iron legs of world power, the UK and the US, which have governed the world for the last 150 years.

The Sovereign and the Seignior will be in charge in the Eurozone; their rule will be the premier example of regional diktat, as ten tings rise to rule in each of the ten toes.