Bear Mountain Bull

It’s time again for a little BMB R&R, especially with the market behaving as bizarrely as it’s been. Maybe if we stop watching it start to behave a little better…

Posting will be very light and variable over the course of this week, but we’ll put up an open thread each market day for our readers to comment on the day’s market activity or to post any interesting links they might run across.

Check the space below for whatever the latest might be during this ‘off’ time, and please visit the various sites in the ‘Links’ and ‘Regular Stops’ for up-to-date market news and analysis.

BMB will be back in full swing by next weekend.

This time, in deep space:

Two supermassive black holes have been found to be spiraling toward a merger, astronomers said today.

Don’t worry, David Faber will be all over it in the morning on CNBC. And I’m sure there are tons of regulatory issues to be considered.

Quite a bit of nothing today. Things looked a little dicey mid-morning, but that action mellowed to reveal pretty much a snoozer. The Dow Industrials fell 23 points (-0.2%) to 11217, the S&P 500 dropped 3 points (-0.2%) to 1309, but the Nasdaq gained 1 point (+0.1%) to 2361. The Russell 2000 was flat at 766. The Dow Transports mustered only a couple of points but the Utilities got sacked for a 1.4% loss. Bonds had another rough time of it, sending yields back up: 6-month: 4.83%, 2-year: 4.83%, 5-year: 4.83%, 10-year: 4.89% and the 30-year: 4.96%.

Market internals were mixed, with a slight tick up in volume on the Nasdaq and another small tick down on the NYSE. Advance/declines were below the flat line on both exchanges, at 8 to 11 on the NYSE and 14 to 15 on the Nasdaq. Up/down volume, however, was positive on both: 11 to 10 on the NYSE and 13 to 7 on the Nasdaq. New highs/lows were 215/69 on the NYSE and 208/38 on the Nasdaq.

A split decision among the industry groups, with about half up and half down. Winners were led by gold & silver stocks (+1.6%), steel stocks (+1.3%), semiconductors (+1.3%) and computer hardware (+1.1%), while biotech (_2.3%), airlines (-1.9%), HMOs (-1.6%) and utilities (-1.5%) led the losers.

Energy prices were mixed: crude oil up almost a buck to $67.94/barrel and gasoline closing in on 2 bucks a gallon again ($1.99), but natural gas dipping a few cents after the morning natgas inventory report to $6.97/mmBTU. The dollar index crept up a bit to 88.94. The precious metals continue to romp, with gold tagging $600 in the futures market - the spot price is $596/ounce - and silver clearing $12 to $12.09/ounce.

BMB Note: The churn continues. For two days at least, another caboose has peeled off the train and moved toward the front in the form of the semiconductors. How long will that last? No way to know, but the moves haven’t been lasting real long lately. The market failed to gain any ground today, but didn’t give up much either.

I never like to see the internals out of whack like they were today, with advance/declines diverging from up/down volume, but nothing seems to really mean anything anymore, so it probably just doesn’t matter. If you don’t like the way the market is going, wait a few hours, or maybe a couple of days, and it’ll change.

Monthly jobs report out tomorrow morning (see discussion earlier today). That usually has an impact on the markets, but I’m not sure any impact can be lasting at this point. Maybe that’ll change with earnings coming up.

RIMM earnings after the bell - a miss. Looks like the stock’s down about 4½ bucks from its 84.38 close.

Honoring the very “best” of hurricanes.

Hopefully the storms don’t have to wear those putrid yellow jackets that the Pro Football HOF guys do.

…for the start of trading on both the silver ETF and the new oil ETF. No word yet.

Football. It’s going to start anyday now, right? After all, the NFL is releasing their 2006 schedule today! Check it out after 2:00ET at NFL.com.

In other sports news, the Masters is underway at Augusta National (been there!), and the NCAA hockey Frozen Four semifinals are today/tonight. Go Badgers!

As always, there is a lot of discussion surrounding tomorrow morning’s monthly non-farm payroll report. For quite some time, pundits had been complaining about the “jobless” recovery. But the jobs numbers have been a little better the past few months and the complaining seems to have quieted somewhat.

Now the pundits - and the market - find themselves in a sticky situation: strong jobs numbers may indicate a supposedly still-strong economy, and that’s bad news for those waiting for the Fed to put a halt to its rate hikes. On the other hand, weak job numbers may indicate that the economy really is weakening, and that’s not necessarily good news either.

So what about the number? Regular BMB readers know that we don’t like goverment numbers very much, since we know they’re not very real - like the games that are played with the CPI, and all of the other ’seasonally adjusted’ figures that are produced - but they’re the only numbers we get.

Unfortunately, the payroll numbers are no exception. Just to help keep things nicely obfuscated, the government employs a birth/death model, basically inventing mythical companies and employees that they “guess” might have been created. And according to Barry Ritholtz at The Big Picture, we’re about to enter the “seasonally strong” period for birth/death adjustments, and that’s bad news for the “Stop the Fed” crowd. Barry quotes John Crudele in the New York Post:

“What is happening is much simpler (and, in a way, more inister): starting with the March number to be released Friday, the government starts making optimistic assumptions about hiring spurts caused by new companies coming into existence.

The government will assume that around 200,000 jobs a month are being created by new companies in the April, May and June report.

If the next four jobs reports reflect the seasonal abnormalities that I think they will, then the markets will be soon expecting a whole lot more rate hikes.”

Keep this information in mind tomorrow morning when you hear how many jobs were “created” in March - some of those having been ‘created’ out of thin air. You never realized the economic world we lived in was this foggy, did you?

The see-saw action continues. After a feeble attempt to move things higher at the open, things have turned to the negative side. All three majors are showing slight losses, with the A/D lines well into the red - for now. Positive movement in the precious metals and steel stocks, while airlines, biotechs and utilities are lower. Bonds are under pressure, with yields up across the board.

Energy prices are higher, not helping matters. The spot price of gold has moved up to $593/ounce, and silver is making its way near $12. The dollar is being helped a bit by the higher interest rates.

• Generally poor retail sales figures roll in. This time, we have another excuse, in addition to the weather: it’s the calendar’s fault, since Easter is too late in the year.
• Merck wins one and loses one in the latest Vioxx lawsuit saga.
• European Central Bank doesn’t move on interest rates.
• Weekly initial jobless claims fall below the 300K mark.