That Guy From The Social Network Bows Out Of The Fed Chairman Race

Equities start the day higher as that guy from the Social Network bows out of the Fed Chairman race. You know when a CEO quits overnight, the stock opens up 10%, and you say to yourself “I wonder what it feels like to the guy who just left?” Now imagine the world’s largest stock market added a few hundred billion in market cap because you said “yea….maybe I’m not the right guy here.” Do you go down to your local watering hole and say “you are all ingrates. I made you richer because I’m going golfing instead of running Fed Funds.” The mind does wonder. So I guess that’s ANOTHER downside catalyst left for dead on the side of the road. What’s the bearish case right now? Taper? That and valuation right? (Oh and this, but we’ll circle back to that in our news highlights) The problem with being bearish on valuation is it’s impossible to time, there’s just no way you are going to call the exact top. Being bearish on the Taper is worse because we literally have no idea what their timetable looks like. So why stand in front of a market that wants to go higher, that continues to shrug off wars and bad politicians and made up things like a “debt ceiling fight”? Again, I’m not trying to play the role of perma-bull here, there are plenty of those on Twitter/Wall St. I’m trying to bring a little fun to an otherwise boring recap world while taking the temperature of the market. And right now its remains hot, completely resistant to antibiotics, and ready to make you sweat! Let’s do this.

After the open we went absolutely nowhere, but that ALWAYS happens on gap up moves. Look at futures from last night to about mid-way thru the session. Basically sideways. Overnight news is good enough for the rip but not incremental enough for the follow thru, fairly cookie cutter price action for a Sunday news drop. Economic data was a non-issue, inline prints from Industrial Production and Capacity Utilization brought nothing fresh to the table. Basically the first half of the day was dominated by two things: relief that Summer is over (you knew I’d work this pun in) and the shooting in Washington DC. The rally was led by exactly what you want too: Industrials / Financials / Materials, and we even saw a fresh all-time high from the Rus2k. Winners were ATI, BA, CF, ADT, and BMY. Losers AAPL (lack of any news on iPhone pre-orders really hurt), ALTR, DNR, and AN. Not many big losers though, only 16 names in the S&P were down more than 1%. By lunch we sat on 1,699, 4 pts off the high as another exchange broke (the CBOE..again). Seriously, what is the deal here, stock markets functioned for 200 years, flawlessly, only pausing for things like, I don’t know, WORLD WARS, and now they break every other week? Is there a business here I can start? How about I mix Social Media with Stock Market computer securi….yea you might not hear from me anymore. Look me up at my new home in Mallorca (my envy hit an all-time high clicking that link).

The 2nd half of the day saw a slow grind lower and we closed at 1,697, up 57bps. At one point we were trading 1,704 so what should’ve been a great day ended up just an average day. Oh well, looks like one news headline wasn’t enough to push us to new highs, guess we’ll have to wait for something else. Couple of things to keep your eye on: price action in Goldman and the Transports. Both are threatening new breakouts for 2013, which is a great signal for the good guys. Anyway, another day another brick laid on the wall of worry. For now we march on, for we know nothing else.
Final Score: Dow +77bps, S&P500 +57bps, Nasdaq -30bps, Rus2k 22bps.


News Highlights:

We’ll end tonight with a wedding disaster. Now you all know I love football, and who doesn’t love going to other people’s weddings (besides everyone), so why not mix the two together? If you are this guy, and you just did this, do you have to leave? I say you do.

Have a good night.