September Bull and Baird Blog

September 12, 2013

Equities start the day lower as Jobless claims plunge to the lowest level since 2006. 292k? Wow, bring on the mega taper Ben. Wait….what’s that? There was a computer glitch responsible for bad data? Come on man! If I can’t rely on 100% accuracy from the Federal Gov’t what can I rely on? @zerohedge is going to have a field day with this one right? Apparently the BLS is upgrading a few of their Commodore 64s so we’re not supposed to draw any conclusions from the data. Inquiry: If it had been 450k instead of 292k would they even have released it? The conspiracy theories are too innumerable to ponder, needless to say governmental data isn’t exactly infallible (I blew your mind there didn’t I?). Anyway, we start the day a whopping 1.2% off all time highs with no real change to the playing field. The taper is on for Sep 18, Syria is fading into the rear view mirror, and Putin thinks America is just average (I’m going to refrain from commenting on this one). Hey, since I have you here, how about a real data point you can wrap your arms around. Try this one on for size: Small Business Job creation plans are at their highest level in years. Whoa, man I gotta sell these stocks. I hate when small businesses create jobs.

After the open it felt like the day before thanksgiving mixed with the day after Christmas. Just a total lack of interest from anyone and everyone. Was there a holiday I missed? Actually wait, there wasn’t a lack of interest from everyone, let’s talk about retail shall we? What do Yoga Pants, Paisley handbags, and “you’re gonna like the way you look, I guarantee it” all have in common? If you answered “they gave mediocre guidance and got smacked” you win the prize! Tell ‘em what they’ve won Jonny! “’ve won absolutely nothing, thanks for playing”. Well, unless you were short, then you won some positive PnL. Most of the other losers were materials related, stuff like CLF, VLO, NEM, TSO, and COG. Winners were WAG, KR, IRM, D, and YHOO. Hey, look at that YHOO, what a story. Hire a great CEO, pump out a new logo, get a few activist investors to sing your praises and all of a sudden you’re hotter than a guy in a TSLA using Z to find his new home in sunny Las Vegas. In which he’ll watch NFLX on the TV he just bought at BBY…yea I killed this joke, sorry. Slow day. By lunch we were aimlessly trading between 1,683 and 1,689 with no feel for where we should go.


The back half saw us test the lows, 1,682, down a whopping 34bps, and close right above there. Well there goes that 7 day winning streak we were on. Tragedy huh? This bear market just won’t let up, it’s ugly all over the place. Well, for a few weeks at a time at least, then everyone throws in the towel and calls it 2000 or 2007 or whatever other time we were in a massive bubble. Because anytime the market goes up its gotta be a bubble right? By the way, in case you didn’t notice, nothing really happened today. This is what you would call a “middle” day. 99% of the days don’t have any meaning at all they are just grinding around the “middle”. At least there’s a couple of decent economic data points on Friday, let’s see if those have any kick in them.

Final Score: Dow -17bps, S&P500 -34bps, Nasdaq -14bps, Rus2k -65bps.

News Highlights:

  • Let’s take a walk down memory lane shall we? From 2007 we have the future of cell phones!
  • And another one from 2007! Seriously, after seeing this, how was it not blatantly obvious?
  • Bullish job charts? I got your bullish job charts right here. “I first checked in on various employment indicators in March, which argued for higher stock prices and in May ran an update that suggested higher stock prices into the fall. Those same indicators are calling for further employment gains heading into 2012 and suggests the unemployment rate could reach 6% by next year, all of which would obviously be bullish for the stock market”
  • How mad would you be?
  • Tech IPOs are delivering the best returns since 2000? Is that right? “This year’s newly public tech companies jumped an average 39% their first month, better than the 31% average first-month return in the like 2012 period, according to Dealogic. Tech IPOs haven’t delivered stronger initial performance since 2000. In the same period that year, U.S.-listed tech IPOs jumped 77% their first month.”
  • I haven’t had a football link yet so here you go. Look at that little dude rumble!
  • If I ever buy a boat, it would be this one. I mean specifically this one.
  • Oh man people are already writing 2014 market commentary? I’m behind the curve. “Putting these (very normal) short-term events aside, I believe that markets will test and ultimately set new highs. Moreover, I think 2014 could be another record year for stocks, and here’s why..”
  • Which one of these two scenarios do you think plays out? I think you know where I stand. “So our current situation sees fundamental and technical factors coming together to create The Perfect Storm. If everything goes well, that is, Syria hands over its weapons, the Fed does "taper light" and Congress and the White House can come to a quick conclusion on the debt ceiling debate, it will be a solid green light for the stock market. On the other end of the spectrum, military action in Syria, an adverse reaction to withdrawal of easy money by the Fed or a standoff between the House and the White House over the debt ceiling lead to potentially rough waters and big waves ahead for global financial markets.”
  • Show this to your favorite lawyer friend to remind them why they will always be employed.
  • A great lesson to dwell on, especially in our businesses where things can get heated.

We’ll end tonight with a product banned in the USA. Apparently it’s not banned in Russia though because this guy is rocking it!

Have a good night.