Buzz Bits: DOW, Nasdaq Slip
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Funny thing happened on my way to penning the spell-binding conclusion to Guys Wide Short. I was just sitting down to type when a couple strangers showed up at my door and invited me to golf. As I was pondering my answer, I found myself wondering why one of them was dressed up as the Queen of Diamonds. It gets a little blurry from there but let's move on to retail...
There's a certain widely respected Poppa Bear out there wondering if this morning's punk retail sales figures can be attributed to a flagging consumer. My take is "kind of." I think February weakness was most-likely the Other Shoe in a pair with the better-than-expected January results.
Overall, I think sales growth remains pretty much "blah" rather than crashing.
Flashback! - Bill Meehan - 3:09 PM
This day in market history...
- Closing levels 6 years ago
- DJIA: 10,164.92
- Naz: 4754.51
- S&P 500: 1381.76
- Crude: 31.51
- Gold: 287.15
This day in Minyanville history...
- Prof. Reamer wrote Of Fat Tails and Leptokurtosis with regard to Efficient Market Hypothesis
In other news...
- In 1962, Wilt Chamberlain dropped a cool 100 pts on the Knicks. The Knicks have even had the kitchen sink dropped on them this year.
Hot Pockets! - Todd Harrison - 3:00 PM
The stand-out action in today's equity fray? It's gotta be the silver stocks, and not because they're on my laundry list after peeling out of my "long-term" exposure.
With white lightning up a finski (5%), Pan American (PAAS) is up a dime (10%) and Silver Standard Resources (SSRI) is up 9%. Neither stock has taken out their previous highs (yet) but, as metals (and energy) are my long-term secular winners---and CRB 320 fades into the rear-view--I'll openly wonder if I've out-traded myself (again).
Things that make you go hmm...
There are some things I wanna know as well - Bennet Sedacca - 1:18 PM
If the ten year note were to close here, the bear flag would be activated, and we would have effectively 'trapped' 3 years of buyers who become a source of supply. That is what happens when support becomes resistance. If, and this is a BIG if, we close like this, I think a quick trip to the 4.90 level or so is in the cards.
So tell me why the XBD isn't down? The BKX is down a little bit, but not as much as I would think with the long bond down a point and a half. I also wonder why stocks, in general, aren't reacting more - but it is early.
One thing is for sure, we are flattening away from that deep inversion and quickly. The 6 month to 30 year spread that I track is down to 6.5 basis points from 21 basis points just the other day. So our 6 month bills, 2 year notes and cushioned mortgages are hanging tough. I just think the close in bonds holds the clue to the next 6 weeks or so in bonds, which could ultimately set the stage for stocks. You just have to wonder if Snapper is hanging in the woods waiting to make a late entry, making this a 'false breakdown.' We'll see.
Position in various treasuries and MBS
Mini-Minyan Mailbag - John Succo - 12:08 PM
Do you feel there is a low risk of default on GXM's? The yield and short-term maturity are very enticing.
We put the risk of General Motors (GM) bankruptcy this year at fairly small, maybe 10%. After this year that probability probably doubles, but it is highly dependent on fundamentals going forward.
If GM went bankrupt today, we believe they would be able to pay off bondholders with equity at zero. The problem is the company is burning cash, so the longer they take to go bankrupt, the worse the chances are for bondholders.
That is why they are trading cheap even though there are enough assets to cover debt holders currently.
Position in GM
Mini-Minyan Mailbag - Scott Reamer - 11:53 AM
Prof. Reamer -
I think sports leagues are fascinating little econospheres, and the NFL's announcement that there will be no labor deal, completely blowing future cost certainty out of the water, is going to be a great little experiment of a shift in time preferences. The first reaction, which will happen today: teams are forced to cut costs to get under the salary cap. And I'm sure there will be no new stadium deals, team sales, or long term projects undertaken until this gets resolved. Should be interesting...
Agree 100%; as sociometers, sports tend to be terrific - almost without exception - in terms of their utility for understanding the preference for risk (seeking or aversion). All the constituents: owners, players, coaches, networks, and fans each have their own preference for risk appetite. How they interact should tell us much about which is dominant...
Sssnaapppy!! - Fil Zucchi - 11:46 PM
After the back and forth of the last two and a half sessions we are at some well defined levels in the Spiders (SPY) and the Russell 2000 (IWM). With bonds cracking, piggies lagging, breadth still red despite Snapper's efforts, and the chips (SMH) pulling in during the Snapper, Boo is tugging me back in (like the Mafia I may add) for a short term play.
I am also shedding a bit of the gold names. With the ECB jacking up rates and Japan inflation numbers coming out tonight (will Japanese rates break above zero?), I don't want to stand still in front of another leg of Japanese carry traders unwinding their positions.
Just trading them Minyans.
Positions in IWM, SPY financials
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