Some of the events and news that I would normally cover were very hard to get to today with the internet problem, but there are a few things worth mentioning...
Last night I saw some surprising news as details of the "Greek Bailout" continue to leak. It appears that a former Labor Minister in Greece spilled some details that included the right for Greek lenders to seize the gold in the Greek National bank. Reuters confirmed what the former labor minister said, saying they found it in the "fine print" of the deal details. This new revelation really makes me wonder what else is in the fine print and why the full details of the deal have not been released and if this is a bailout for Greece or as some have suggested, a mechanism to bailout European banks?
Yesterday was a slow day on the economic docket for the US, today wasn't a whole lot busier, but we had some auctions and Initial Claims.
Initial Claims came in 351k (consensus of 355k) which is slightly better then expected, but not much. As is almost always the case, the previous week's data was revised higher from 348k to 351k making today's print flat (at least until it is likely revised higher next week). Surprisingly, this did seem to put some pressure on S&P E-minis (ES) futures as they lost about 9 points from the release at 8:30 a.m.
| Released On 2/23/2012 8:30:00 AM For wk2/18, 2012 |
| Prior | Consensus | Consensus Range | Actual |
| New Claims - Level | 348 K | 355 K | 330 K to 363 K | 351 K |
| 4-week Moving Average - Level | 365.25 K | | | 359.00 K |
| New Claims - Change | -13 K | | | 0 K |
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Other news weighing on the early ES trade were comments out of Canada that the G20 may not add to IMF resources when the G-20 meets over the weekend.
The EIA reports were released today given Monday's market holiday. The n
atural gas report was a minor negative as the in storage fell 166 billion cubic feet in the February 17 week vs consensus for a slightly larger draw of 170 bcf.
As for Crude, Gas and Distillates, here were the results:
| Prior | Actual |
| Crude oil inventories (weekly change) | -0.2 M barrels | 1.6 M barrels |
| Gasoline (weekly change) | 0.4 M barrels | -0.6 M barrels |
| Distillates (weekly change) | -2.9 M barrels | -0.2 M barrels |
There was a 1.6 mm barrel build in oil, despite refineries increasing output of gasoline, there was a rare decline for the week. Year on year wholesale supply shows a 6.1% decline in demand for gas. For distillates there was a slight draw. There's also less demand for distillates year over year with a decline of 5.9% and -9.1% for jet fuel. USO's first reaction was a slight decline on the build, despite closing strong on the day.
News was out mid-day that showed after having a really terrible 2011, Hedge funds are by and large underperforming the market with only 10% beating the S&P benchmark. An argument could be made that the hedge fund carry favorite AUD/JPY has underperformed the market and as such is a measure of hedge fund's willingness to be in the "risk on trade", thus the underperformance may be due to their unwillingness to be long or aggressively long the market.
Other then the F_E_D Balance Sheet and Money Supply, the 7 year auction was the only other US economic event today and very successful at that.
The Treasury Auctioned off $29 billion in 7 year bonds with a record Direct Bidder takedown, doubling from the last auction and setting a new record. Direct bidders are typically institutional money (ex Primary Dealers). Primary Dealers (usually the ones to step in on slow auctions) were much lower then the average and even in-directs (typically foreign central banks) were healthy in the auction (reversing the last auction when they were noticeably absent). I find it a little ironic as I mentioned in my meeting two nights ago with a financial firm, we were debating where long only money would likely go in the market and I mentioned this here, my opinion was in to treasuries, if not for the yield which is insignificant, just for the protection.
AAPL, which managed an afternoon rally to close up .69% after having been in the red during the early afternoon, apparently didn't take well to remarks made at the AAPL shareholder meeting by Cook, talk of what AAPL will do with it's excess cash touched on a dividend which AAPL did not respond well to, taking AAPL down -1% in about 10 minutes.
Late in the session, a move in the uSD/JPY that started at 3:07 p.m. through about 3:45 looks to be responsible for the surge in stocks around the same time as the USD/JPY broke below the important 80 level.
The dollar drop at the same time vs the SPY in red.
Despite some moderate to impressive gains (Russell 2000) today, all of the averages are still locked within the recent lateral range that has developed.
That's a brief wrap, time to take a closer look.
