29 Nov
Daily Market Commentary

Buyers Gobble Up Stocks; 8th Weekly Gain

SPX -12.02.13 little extended approaching upper trendline in big uptrendSTOCK MARKET COMMENTARY:
FRIDAY, NOVEMBER 29, 2013

Stocks enjoyed their 8th consecutive week as the major averages continue to march higher. As we have mentioned several times recently, in the short-term the market is extended and a light volume pullback would do wonders to restore the health of this rally. The market negatively reversed (opened higher and closer) on Friday which could signal the start of a short term pullback. So far, these pullbacks are lasting a matter of days, not weeks or months- which illustrates how strong the bulls are right now. The intermediate and long term outlook remains very bullish as the major averages and a slew of leading stocks continue to act very well. As we have mentioned several times this year, we are in a very strong bull market and pullbacks should be bought, not sold. Every pullback this year has been shallow in both size (% decline) and scope (weeks, not months). The primary catalyst behind this 4.5 year bull market remains easy money from global central banks. We know that the easy money is here to stay (for now). Therefore, barring some unforeseen massive decline, this bull market is alive a well. Eventually the music will end, but as a market practitioner, our only job is to align ourselves with what is actually happening, not what someone thinks will happen.

MONDAY-WEDNESDAY’S ACTION: Nasdaq Tops 4k

Stocks opened higher but ended mixed on Monday after the Nasdaq Composite jumped above 4k mark for the first time since 2000. Sellers showed up and the Nasdaq closed just below that psychologically important level. Over the weekend, Iran reached a deal with several western nations to limit its nuclear program in exchange for easier trade restrictions. Oil and gasoline futures slid on the news. In the US, pending home sales slid -0.6%, missed estimates and marked the fifth straight monthly decline.

Stocks rallied on Tuesday as the major averages continued edging higher ahead of the holiday. Building permits rose to 974k in September and by 1.034 million in October, topping estimates for a gain of 932k in both months. This was the highest reading since October 2008 and bodes well for the ongoing housing recovery. The September Housing Price Index from the FHFA rose by 0.3% which was another healthy sign for the housing market. Finally, Consumer Confidence fell to 70.4 in November, missing estimates for 72.4. The drop in confidence reduced the odds for the Fed to taper when they meet in December.
Stocks were quiet on Wednesday as investors digested a slew of economic data. Durable goods, which are goods made to last at least three years, fell by -2% in October and matched estimates. Weekly jobless claims fell to 316k easily beating estimates for 330k. Remember, fewer jobless claims is healthy for the labor market. Leading economic indicators rose by 0.2% in October which beat estimates for a gain of 0.1%. Chicago PMI rose to 63, topping estimates for 60.5. Finally, the University of Michigan said consumer confidence rose to 75.1, beating estimates for 73.3.

THURSDAY & FRIDAY’S ACTION: Thanksgiving &  Black Friday

Stocks were closed on Thursday in observance of Thanksgiving. Initial indications suggest sales were higher on Black Friday compared to last year. Only time will tell if that translates into stronger Q4 earnings for retailers and the broader market.

MARKET OUTLOOK: Major Averages Close Above Round Numbers (16k,  1,800 & 4k)

The market is very strong and, in the short-term, remains very extended. The market will pullback and it is just a matter of when, not if. As always, keep your losses small and never argue with the tape.

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27 Nov
Media Quotes

Adam Sarhan Reuters Quote: Gold lower after strong US jobs data; platinum falls 

Reuters * Drop in US jobless claims stirs ideas of Fed tapering
 * Platinum hits four-month low on technical selling
 * China's imports from Hong Kong highest in seven months
 * Coming up: U.S. markets shut on Thursday
    By Frank Tang and Clara Denina
    NEW YORK/LONDON, Nov 27 (Reuters) - Gold fell on Wednesday,
erasing initial gains, as a drop in U.S. jobless claims
supported expectations the Federal Reserve will soon scale back
its monetary stimulus, traders said.
    Platinum dropped about 1.5 percent to a four-month low,
underperforming other precious metals, on pressure from
technical selling that developed when prices fell below support
at $1,350 an ounce.
    Bullion prices were down for a second consecutive day after
the unexpected drop in last week's U.S. jobless claims. However,
 a separate report showed continued weakness in business
spending on capital goods.
    As a gauge of gold interest among funds and institutional
investors, holdings in gold-backed exchange-traded funds fell on
Tuesday, extending a trend of heavy outflows.
    "Negative sentiment and weak physical demand trends indicate
further weakness in gold prices may continue in the months
ahead," said Robert Haworth, senior investment strategist at the
Private Client Reserve at U.S. Bank Wealth Management.
    Gold investors digested news that Venezuela is evaluating a
swap agreement involving gold reserves as a way to fortify
dollar supplies in the OPEC nation, a senior government source
told Reuters on Wednesday.
    Spot gold was down 0.3 percent at $1,239 an ounce by
1:57 p.m. EST (1857 GMT), after rising nearly 1 percent earlier
in the day.
    U.S. gold futures settled down $3.60 at $1,237.80 an
ounce. Trading volume was at 220,000 lots, preliminary Reuters
data showed, nearly 35 percent above its 30-day average of
165,000 lots.
    Strong turnover was largely boosted by the December-February
contract roll over ahead of the December contract's first-notice
day on Friday, traders said.
    With U.S. markets shut on Thursday for the Thanksgiving
holiday, market activity is expected to slow and not pick up
until next week, traders said.
    CHINESE DEMAND
    Losses in the gold market were limited after data showed
China's net gold imports from Hong Kong hit the highest in seven
months in October.
    Chow Tai Fook Jewellery Group, the world's largest
jewellery retailer by market value, posted a 92 percent rise in
net profit for the six months ended in September.
    Platinum fell 1.3 percent to $1,350.99 an ounce,
having earlier hit a four-month low of $1,347.25.
    "Platinum was down due to a steady downtrend in commodities
because of deflation worries and a lot of technical support
being breached," said Adam Sarhan, chief executive of Sarhan
Capital.

    Silver dropped 1 percent to $19.64 an ounce, and
palladium eased 0.3 percent to $713.72 an ounce.
 1:57 PM EST     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold JAN   1237.80  -3.60  -0.3  1237.20 1253.20      438
 US Silver MAR  19.682 -0.211  -1.1   19.665  20.140   41,024
 US Plat JAN   1352.70 -19.20  -1.4  1351.80 1385.30   10,412
 US Pall MAR    715.95  -2.50  -0.3   715.50  726.30    4,615
 Gold          1239.00  -3.90  -0.3  1238.33 1254.20
 Silver         19.640 -0.190  -1.0   19.650  20.100
 Platinum      1350.99 -17.11  -1.3  1355.75 1382.75
 Palladium      713.72  -2.25  -0.3   717.75  723.25
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        220,952   164,655   187,471        19   -0.17
 US Silver       67,199    56,389    57,404      24.6   -1.72
 US Platinum     10,805     9,465    12,889     16.15   -0.62
 US Palladium     7,386     8,099     5,934     20.42   -0.40
Source: http://www.reuters.com/article/2013/11/27/markets-precious-idUSL4N0JC21020131127
27 Nov
Media Quotes

Adam Sarhan WSJ Quote: U.S. Stock Futures Edge Higher

WSJ LOGO

WSJ LOGO


By 

TOMI KILGORE and  PETER NURSE
Updated Nov. 27, 2013 8:28 a.m. ET
NEW YORK—U.S. stock futures edged higher, signaling a possible extension of a rally that has taken the Nasdaq Composite Index above 4000 for the first time in 13 years and blue chips to a string of records.European markets got a lift from upbeat economic data out of Germany and signs of political stability in the euro zone.
Activity was expected to remain light throughout the session ahead of the Thanksgiving holiday.
About 90 minutes ahead of the open, Dow Jones Industrial Average futures advanced 18 points, or 0.1%, to 16078.
S&P 500 index futures gained two points, or 0.1%, to 1804 and Nasdaq-100 futures rose five points, or 0.1%, to 3452. Changes in stock futures don’t always accurately predict stock moves after the opening bell.
On Tuesday, the Nasdaq Composite closed above 4000 for the first time since Sept. 7, 2000. The index remained 26% below its all-time closing high of 5048.62 hit on March 10, 2000. The Dow closed up less than one point Tuesday, but still managed a fourth-straight record high and the 43rd this year.
“The bulls are clearly in control of this market,” said Adam Sarhan, chief executive officer of Sarhan Capital. “You ride this trend until it ends. Right now, to argue with this tape would be foolish.”
At 8:30 a.m. EST, initial claims for jobless benefits in the latest week are expected to show a rise to 330,000 from an original estimate of 323,000 the week before. At the same time, durable goods orders for October are seen slipping 1.7% on the month.
That will be followed after the open by the Institute for Supply Management’s Chicago-area purchasing managers index for November at 9:45 a.m., which is forecast to slip to 60.0 from October’s 65.9. The final reading of the Thomson-Reuters/University of Michigan consumer-sentiment index for November is expected to be revised up to 73.5 from a preliminary reading of 72.0. And at 10 a.m., the Conference Board’s Leading Economic Index for October is forecast to be unchanged.
Although recent data suggest the economy continues to improve, many are still convinced the Federal Reserve will keep its easy-money policies intact, and won’t start paring back its $85-billion-a-month bond purchasing program until early next year.
Mr. Sarhan said he has been telling clients that are looking to commit fresh capital to stocks to exercise patience in the very short term, but to buy aggressively on pullbacks, which he believes will remain shallow and short-lived until the Fed starts reducing its bond purchases.
“The Fed-induced melt-up is alive and well,” Mr. Sarhan said. “We’ve yet to see any major economic data point to clearly show that the Fed will taper in December.”
The yield on the 10-year Treasury note inched up to 2.722% from 2.696% late Tuesday.
In Europe, the Stoxx Europe 600 rose 0.4%. The U.K.’s FTSE 100 index tacked on 0.2%, Germany’s DAX 30 gained 0.2% and France’s CAC 40 added 0.2%.
In Germany, GfK’s forward-looking consumer-sentiment indicator rose to 7.4% in December, the highest level in more than six years, from a revised 7.1% in November, and above expectations of 7.1.
Separately, Germany’s biggest parties have agreed on a deal to forge a coalition government led by Chancellor Angela Merkel, ending a month of fraught negotiations. In addition, the government of Italian Prime Minister Enrico Letta won a confidence vote on the country’s 2014 budget late Tuesday, despite opposition from former premier Silvio Berlusconi.
“Beyond the critical importance of the legislation…to be approved today, yesterday’s Senate confidence vote represents an important step for the government of PM Letta in the direction of more stability,” Barclays said, in a note to clients.
The euro was a touch firmer against the dollar, trading at $1.3595, from $1.3572 late Tuesday. Meanwhile, the dollar strengthened against the yen.
Asian markets closed mixed. China’s Shanghai Composite rose 0.8% after the head of the country’s central banks assured the market of more financial reforms. Japan’s Nikkei Stock Average slipped 0.4%, pulling back further from the six-month high reached on Monday.
Front-month January crude oil futures fell 0.4% to $93.27 a barrel, and was on an early track to settle at a five-month low, while gold futures rose 0.9% to $1,251.90 an ounce.
In corporate news, former Dow component Hewlett-Packard climbed 5.8% in premarket trading after the computer and printer maker reported late Tuesday that it swung to a profit in its fiscal fourth quarter, with adjusted earnings and revenue both beating analyst expectations. The company also maintained its full-year earnings outlook.
Time Warner Cable advanced 1.4% after The Wall Street Journal reported late Tuesday that Cox Communications is considering jumping into the bidding for the second-largest cable operator.
Charter Communications has expressed interest in Time Warner Cable, and Comcast is also contemplating a bid, the report said. Shares of Charter and Comcast were untraded ahead of the open.

Source: http://online.wsj.com/news/articles/SB10001424052702304747004579223590956272688?KEYWORDS=”adam+sarhan”
 

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23 Nov
Media Quotes

Reuters Quote: GLOBAL MARKETS-U.S. shares rise on Fed hopes; euro up on Draghi remarks

Reuters

Thu, Nov 21 2013

* U.S. data lessens fear of Fed tapering
* Euro rises as ECB plays down risk of deposit rate cut
* Dollar rises above 100 yen, BOJ keeps policy loose
* Copper, oil rally; gold holds close to 4-month lows
By Ryan Vlastelica
NEW YORK, Nov 21 (Reuters) – U.S. stocks rose on Thursday as the latest economic data suggested the Federal Reserve would not begin to slow its stimulus soon, although conflicting views over the issue limited gains globally.
The euro rebounded after the head of the European Central Bank moved to quell growing talk that the ECB was considering an unprecedented policy of making banks pay to deposit cash overnight in a bid to boost economic activity.
An indication the Fed may be ready to scale back its $85 billion a month in stimulus had weighed on equities on Wednesday and drove the dollar to a more than four-month high against the yen earlier on Thursday. But the U.S. central bank has repeated it will not taper until the economy can stand on its own and interest rates will remain low well after stimulus is cut back.
Data on factory activity in November in the U.S. mid-Atlantic region indicated the economy continues to struggle to gain traction. The Philadelphia Federal Reserve Bank on Thursday reported its business activity index fell to its lowest level since May.
“The Fed minutes hinted that tapering could come soon, which spooked us yesterday, but that this missed expectations so much adds to the idea that the Fed will continue to be accommodative,” said Adam Sarhan, chief executive of Sarhan Capital in New York.
The Dow Jones industrial average gained 109.17 points, or 0.69 percent, to 16,009.99. The Standard & Poor’s 500 Index was up 14.48 points, or 0.81 percent, at 1,795.85. The Nasdaq Composite Index was up 47.89 points, or 1.22 percent, at 3,969.16.
The rally on Wall Street failed to translate overseas. European shares dipped 0.1 percent, with investors finding few reasons to keep pushing prices higher, though they remained near five-year highs.
Equity markets were also pressured by surprisingly weak data from China and the euro zone, which outweighed upbeat comments from the Bank of Japan as it left its massive stimulus policy in place.
The flash estimates of purchasing managers’ indexes underlined the fragility of the global economic recovery while the European PMIs underlined the lopsided nature of the euro zone’s recovery from recession.
MSCI’s world equity index, which tracks 45 countries, rose 0.1 percent.
In currency trading, the euro rebounded after ECB chief Mario Draghi moved to dispel talk that the bank was considering charging banks to deposit cash overnight in a bid to boost economic activity.
Bloomberg had reported on Wednesday the ECB might cut the deposit rate into negative territory, citing unnamed sources.
Soon after Draghi’s comments, the euro was up 0.2 percent at $1.3468. It had started the day weaker on views the Fed could scale back its stimulus earlier than consensus forecasts, which had been pointing to March.
The pressure from the Fed talk was triggered by the release of minutes from the U.S. central bank’s last policy meeting on Wednesday. The minutes showed officials felt there was room to begin scaling back the bank’s bond purchase program at one of their next few meetings, if warranted by economic conditions.
That shift in perception caused a big spike in U.S. bond yields, boosting demand for the dollar, which hit a four-month high of 101.08 yen, up 1.1 percent on the day.
The U.S. dollar index, which measures the dollar against a basket of currencies, dipped 0.1 percent.
The benchmark 10-year U.S. Treasury note was unchanged in price, the yield at 2.7897 percent.
German 10-year bond yields rose slightly, encouraging equity investors to lock in some of the profits made this year from the Fed’s money-pumping policy.
“Having got hooked on both indefinite QE and low interest rates, investors are becoming increasingly restless and inclined to taking profits,” said Alastair Winter, chief economist at Daniel Stewart.
OIL MARKET EYES IRAN
The prospect of more Fed stimulus also boosted the oil market, with Brent crude up 2 percent and U.S. crude futures up 1.4 percent.
Oil investors were also watching whether world powers will be able to strike a deal with Iran over its nuclear program.
“Coming toward the end of the year, there are two taperings that people are watching — the tapering of Fed bond purchases and Iranian sanctions,” said Olivier Jakob at Petromatrix consultancy in Switzerland. Both would depress prices.
Gold dipped 0.1 percent on the day, following a drop of 2.5 percent on Wednesday. Copper gained 0.3 percent.
 

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22 Nov
Daily Market Commentary

Week In Review: 7th Straight Weekly Gain on Wall Street

SPX- 7 consecutive up weeks 11.25.13STOCK MARKET COMMENTARY:
FRIDAY, NOVEMBER 22, 2013

Stocks enjoyed their 7th consecutive week as the major averages continue to march higher. As we have mentioned several times recently, in the short-term the market is extended and a light volume pullback would do wonders to restore the health of this rally. So far, these pullbacks are lasting a matter of days, which illustrates how strong the bulls are right now. The intermediate and long term outlook remains very bullish as the major averages and a slew of leading stocks continue to act very well. As we have mentioned several times this year, we are in a very strong bull market and pullbacks should be bought, not sold. Every pullback this year has been shallow in both size (% decline) and scope (weeks, not months). The primary catalyst behind this 4.5 year bull market remains easy money from global central banks. We know that the easy money is here to stay (for now). Therefore, barring some unforeseen massive decline, this bull market is alive a well. Eventually the music will end, but as a market practitioner, our only job is to align ourselves with what is actually happening, not what someone thinks will happen. That said, weakness should be bought until intermediate and longer-term technical levels are broken.

MONDAY-WEDNESDAY’S ACTION: Market Pauses After Obvious Levels Hit

Stocks opened higher on Monday, helping the DJIA and SPX hit fresh record highs and jump above 16k and 1,800 for the first time in history. Stocks turned lower in the afternoon and closed below those levels after Billionaire Investor Carl Icahn said he could see a “big drop” in stocks. He is worried that earnings at many companies are due to low borrowing costs (QE) rather than strong management or economic demand. The National Association of of Home Builders/Wells Fargo Housing Market Index, which measures home builder sentiment, was flat for November after a downwardly revised level of 54 in October.
The benchmark S&P 500 (SPX) experienced its first two day decline this month as the market spent most of the day trading in a narrow range. Before the open, Carl Icahn softened his stance and clarified that he is not calling for the market to crash- he is just hedged and has been hedged since 2009. Warren Buffet jumped into the conversation and said stocks are trading in a “reasonable zone” which means they are not over or under valued right now. After the close, Bernanke said rates can stay low for a very long time – even after the the unemployment rate drops below 6.5%. The Fed is doing its best to separate tapering (buy less than $85B/month) from tightening (raising rates).
The S&P 500 fell for the third consecutive day on Wednesday which was its longest losing streak in 8 weeks. The fact that the market hasn’t fallen for three straight days in the past two months clearly illustrates how strong the buyers are right now. The sellers emerged after the Fed minutes were released. The minutes showed central bankers are open to tapering QE in the coming months. The Fed anticipates that economic reports would “prove consistent with the committee’s outlook for ongoing improvement in labor market conditions and would thus warrant trimming the pact of purchases in coming months.” This opened the door for a possible taper at their December meeting, which we feel is possible just not probable.

THURSDAY & FRIDAY’S ACTION: Buyers Are In Control

Stocks rallied on Thursday and snapped the three day losing streak for the SPX after a flurry of economic data was released. Weekly jobless claims fell by 21k to 323k, which beat the Street’s estimate for 335k. Inflation remained a virtual non-event after the Producer Price Index slid by 0.2% in October, matching estimates. The Philly Fed index came in at 6.5, missing estimates for 15.5. Separately, the Senate Banking Panel approved Yellen as the next Fed Chief by a 14-8 vote. Stocks continued to rally on Friday- helping the DJIA and the SPX close above 16k & 1800, respectively.

MARKET OUTLOOK: SPX Tops 1800

The market is very strong and, in the short-term, is getting more and more extended by the day. The last time the SPX rallied for 7 straight weeks was in January. After a brief and shallow pullback, it continued to rally and hit new highs a few weeks later. Please note that our goal is to remain in sync with the broader trend of the market (up or down) and not get caught up with the minutiae of changing labels on the market status very often. As always, keep your losses small and never argue with the tape.

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19 Nov
Media Quotes

MarketWatch.com Quote: Carl Icahn clarifies his stock-caution comments as others downplay them

Carl Icahn clarifies his stock-caution comments as others downplay them

November 19, 2013, 10:47 AM

Activist investor Carl Icahn has clarified his comments that contributed to pushing stocks to session lows on Monday.
Icahn posted a clarification on his website Shareholders’ Square Tablein order to shed light on his stock-related remarks originally reported on Monday from the Reuters Global Investment Outlook Summit. “I am very cautious on equities today. This market could easily have a big drop,” Icahn was originally quoted by the news service as saying.

“Reuters was completely accurate that I am concerned about the level of the market. But I also made it clear on the conference call (and I believe as Reuters reported it), that it is almost impossible to predict what a market will do in the short term. There are too many variables,” Icahn wrote on his website.

Often, continued Icahn, when investors are worried about the markets, “we hedge to some extent and this is one of those times.” He said his firm’s investment funds have had an annualized return of around 27% since January 1, 2009, which would have been greater if they hadn’t hedged.

“As I have often said, picking short-term moves in the market is like predicting how many sevens the “hot” dice player will continue to roll,” he said.

Icahn also addressed comments he made at the conference about Apple Inc.AAPL +0.04%. He said he still thinks Apple’s stock price is undervalued and that CEO Tim Cook feels the same way.
But he also criticized Apple for holding onto too much cash. Apple isn’t a “bank” and “should not be run like a bank because investors did not invest in a bank,” he said at the conference.

“While I do not micromanage, at the risk of being immodest, I believe that in the area of allocating capital there are very few better than we and we hope to be able to be involved, as a large shareholder, with Apple, in this area,” said Icahn on the Shareholders” Square Table website.

As for his stock comments from Monday, several observers were brushing aside the power that just one man could have over the market. Stan Shamu, analyst at IG Markets was one of those, saying that “at such elevated levels investors are always looking for excuses to take some profits off the table.”
Sarhan Capital’s Adam Sarhan pretty much agreed, saying the market is “very extended and happened to fall after the Dow industrials DJIA -0.06% and S&P 500SPX -0.20% crossed above two very obvious round numbers. It is important to keep in mind that markets are counter-intuitive in nature and rarely move when things are that obvious.”
Sarhan says he’s still bullish on the market, but finds the market is getting “very extended and a bit frothy up here.”
Added Stephen Guilfoyle, chief economist at sarge986.com, of Icahn’s Monday comments:

“It was nothing new, nothing that you did not know, but it is food for continued thought…Equities seem fairly valued to me, or should I say, not severely overvalued…”

And so far on Tuesday, the Icahn effect appeared to be fading somewhat. Check out our live market blog.
– Barbara Kollmeyer
Follow Barbara @bkollmeyer
Follow The Tell Blog @thetellblog

Source: http://blogs.marketwatch.com/thetell/2013/11/19/carl-icahn-clarifies-his-stock-caution-comments-as-others-downplay-them/

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19 Nov
Media Quotes

Reuters Quote: Palladium's "golden cross" signals near-term gains

Reuters

TECHNICAL-Palladium’s “golden cross” signals near-term gains

3:17pm EST

* Palladium up 3 pct in 2013, lone gainer in precious metals
* “Cross” seen bullish on prices in next 3-6 months -analyst
* Open interest in U.S. futures near 1-1/2 year high
* Has met strong resistance at $780 six times in 2013
By Frank Tang
NEW YORK, Nov 19 (Reuters) – A “golden cross” set to form on palladium’s chart suggests the autocatalyst metal has room to rally in the next several months, reflecting fund buying on hopes of a better economic outlook, analysts said.
On Tuesday, spot palladium’s 50-day moving average was poised to break above its 200-day moving average, a highly bullish formation known as a golden cross, as the metal rose 0.5 percent to around $720 an ounce to snap a two-day decline.
(For a chart, click link.reuters.com/sev74v)
“The 50 crosses above 200 illustrates continued demand from institutional investors,” said Adam Sarhan, chief executive of New York-based Sarhan Capital.
“The golden cross is a good intermediate- and long-term signal for further strength. Typically, the market’s higher in 3-6 months out, if not longer,” Sarhan said.
Palladium, with auto catalytic converters representing two-thirds of total demand, is one of the few bright spots in precious metals.
Year to date, palladium is up almost 3 percent, standing in sharp contrast to platinum’s 8 percent drop and gold and silver’s 24 and 33 percent losses respectively.
While platinum is a more effective catalyst and often required in diesel engines to clean tailpipe emissions, the less-expensive palladium is more widely employed in gasoline vehicles.
Some analysts said platinum has underperformed palladium because of the still lackluster European market, in which most vehicles are diesel-powered.
FUNDS BULLISH ON ECONOMIC HOPES
Strong institutional investment demand in U.S. palladium futures <0#PA:> is reflected as open interest, a liquidity gauge, hovered near a 1-1/2 year high.
Palladium held by exchange-traded funds, however, were down 15 percent at 1.65 million ounces from a 2013 peak of 1.95 million ounces set in March.
“Just because the stock market is doing well, palladium is doing more decently relative to the other precious metals because of its industrial uses,” said Rick Bensignor, head of trading strategy at Wells Fargo Securities in New York.
Earlier in November, precious metals specialist Johnson Matthey forecast China’s strong appetite for cars and lower supplies from the depleted Russian state stockpile should keep the palladium market in a deficit of 740,000 ounces in 2013.
Renewed supplies worries from South Africa, which accounts for nearly 40 percent of annual mine output, should also underpin palladium prices after the country’s utility Eskom declared a power emergency on Tuesday.
Prices have largely traded in a range between $640 and $780 an ounce this year. It has rallied toward heavy technical resistance in an area from $760 to $780 six times since January but has failed each time.
Bensignor said that palladium’s unique sideways pattern this year and the DeMark trend-momentum model suggest that the metal will most likely not hit a bottom until Friday.
“It would make me think that I probably would not want to buy for a few more days,” said Bensignor. (Reporting by Frank Tang; editing by Andrew Hay)
 

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 Source: http://www.reuters.com/article/2013/11/19/precious-palladium-idUSL2N0J41R220131119

19 Nov
Media Quotes

IBTimes.com Quote: JPM $13 Billion Fine…

IB TIMES

Why Is The Government Getting Off Scot Free From JPMorgan’s (NYSE:JPM) $13 Billion Fine? After All They Were The Ones Who Sold Them Washington Mutual

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on November 19 2013 11:47 AM
It’s unlikely that when J.P. Morgan Chase & Co. (NYSE:JPM) agreed to buy Washington Mutual for $1.9 billion five years ago it could imagine it would find itself paying a $13 billion settlement to end several investigations and lawsuits stemming from dodgy mortgage bonds that were issued before they took control.
Late on Monday night and a little over five years later the Jamie Dimon-led bank agreed to just such a deal.
While few will shed a tear at the fate of America’s biggest bank by assets for paying this record breaking fine, the deal does suggest a a dangerous precedent for government-brokered deals going bad.
According to a Wall Street Journal report the deal was structured by U.S. Attorney General Eric Holder to avoid a scenario where a part of the government issued penalty to JPMorgan would be extracted from another government agency. Holder feared such a scenario was a real possibility given the government’s hands on role when they seized Washington Mutual in Sept. 2008 before handing it over to J.P. Morgan.
In addition, J. P. Morgan also agreed not to pursue the the U.S. Federal Deposit Insurance Corp. (FDIC) for any part of the $13 billion, seemingly bringing an end to any lingering possibility that the government would take any blame for its involvement.
However, what kind of precedent does this set? It’s widely known that JPMorgan and other banks in strong positions were pressured by the government to step up and take on the troubled banks, many of which were either in bankruptcy or about to enter bankruptcy. At the time this was deemed essential for the American economy and in some ways could be seen as a public service. JPMorgan was certainly viewed that way after they acquired Bear Stearns. However for all the plaudits the bank received it now finds itself as lead character in a scenario where federal authorities can force commercialbanks to make acquisitions while at the same time denying them protection from unseen liabilities later down the road.
There’s no doubting JPMorgan have benefitted hugely from that and the Bear Stearns deal, making them one of America’s most important banks that had until recently recorded nearly a decade of straight gains before making a loss in the last quarter, ironically from the legal implications of the very deals that made them such a tour de force.
“The real question to ask is: What, if anything, were the banks forced to buy during the financial crisis that they didn’t want?” mused Adam Sarhan of Sarhan Capital. “Even if they were forced to buy something they didn’t want, the price was so low that it was accretive to their bottom line at the time.”
In the case of Washington Mutual, JPMorgan had tried to buy the bank in April 2008 for $8 per share, clearly proving that it was something they wanted. But the bank rebuffed J.P. Morgan’s advances and settled instead for a $7 billion private capital injection from investment company TPG.
By September  2008 the bank was back in trouble because of a run that sucked $16 billion out in just nine days, and with no willing buyers the government intervened and seized the bank on the Sept. 25, 2008 before selling it all to JPMorgan just one day later. That series of events cost Washington Mutual shareholders $26 million.  Had the bank taken J.P. Morgan’s offer in April of that year they would have walked away with at least something.
In the end JPMorgan acquired 2,239 branches, $307 billion in assets and $188 billion in deposits for a price of $1.9 billion plus debt assumption and write downs of about $30 billion in bad loans. It all points to what can only be described as a good deal and a fair amount cheaper than what they were offering in April.
It appears that for all the government’s pressure on J.P. Morgan, there was an equal amount of desire from the New York-based bank to acquire Washington Mutual. So shouldn’t it stand to reason that if they both shared a desire to make the deal happen in Sept. 2008 – the government ensuring that they were seen by the public to be securing the economy and J. P. Morgan just trying to make a good business deal – shouldn’t they now be sharing in the failures of that past?
It’s a difficult question to answer, however, if a similar financial apocalypse should unfold in the future, there now appears to be little reason for these private banks to step up as the banking super hero when they will face public outrage and the possibility of huge fines many years down the road.
 
URL: http://www.ibtimes.com/why-government-getting-scot-free-jpmorgans-nysejpm-13-billion-fine-after-all-they-were-ones-who-sold
16 Nov
Media Quotes

Adam Sarhan Reuters Quote: Paulson holds onto bullish bets in gold ETF in Q3, others cut

Reuters

Thu, Nov 14 2013

By Frank Tang
NEW YORK (Reuters) – Hedge fund Paulson & Co maintained its stake in SPDR Gold Trust, the world’s biggest gold-backed exchange-traded fund, in the third quarter after slashing its stake by more than half in the second quarter when bullion prices plummeted.
However, some notable money managers and pension funds, including PIMCO, continued to cut their gold ETF holdings, sparking fears that the exodus in gold led by institutional investors in the first half of the year will continue as the economy improves.
New York-based Paulson & Co, led by longtime gold bull John Paulson, owned 10.2 million shares in the ETF worth $1.31 billion on September 30, unchanged from its holdings on June 30, a filing with the U.S. Securities and Exchange Commission showed on Thursday.
That represents a gain of $93 million as the price of gold rebounded in the third quarter.
“For hedge fund managers like Paulson, I think they are long-term investors,” said Axel Merk, portfolio manager of California-based Merk Funds, which has about $450 million worth of assets under management.
“With Janet Yellen, we know that the Federal Reserve is likely to err on the side of inflation, so there is a good reason to continue holding onto it,” said Merk, whose firm also owns a stake in SPDR Gold Trust.
Gold prices were little changed at $1,290 an ounce after the filings by Paulson. On Thursday, bullion rose after the nominee for Federal Reserve chairman, Janet Yellen, defended the U.S. central bank’s bold steps to spur growth, suggesting the massive bond-buying stimulus will continue. <GOL/>
Investors pay close attention to the quarterly filings by Paulson and other notable hedge fund managers because they provide the best insight into whether the so-called “smart money” has lost faith in gold as a hedge against inflation and economic uncertainty.
Paulson, which shot to fame in 2007 with a prescient bet against subprime mortgages, sharply cut its stake to 10.2 million shares in Q2 from 21.8 million in Q1, marking the first time the firm cut its gold ETF stake since the fourth quarter of 2011.
SOROS SWITCHES POSITIONS, PIMCO CUTS
The price of gold gained 8 percent during the third quarter, its largest quarterly gain in a year, thanks to a sharp rebound rally following a record 23 percent drop in the second quarter.
The general sentiment among gold investors, however, remains cautious as hedge funds continue to pile into the U.S. equities market for a better return. The S&P 500 index .SPXhas been up about 25 percent this year, while gold was down over 20 percent and set to snap a 12-year bull run.
“Hedge funds are in the wait-and-see mode looking for more data to emerge before making the decisions for their next move in gold,” said Adam Sarhan, chief executive at New York-based Sarhan Capital.
SPDR Gold Trust held 906 tonnes of gold at the end of the third quarter, versus 968.3 tonnes in the second quarter. The pace of selling appeared to slow after a more than 250-tonne outflow in the first quarter.
Among large institutional investors, PIMCO has now cut its stake in SPDR Gold Trust for a fourth consecutive quarter to 1.2 million shares by Q3, down sharply from 6.3 million shares in the second quarter of 2012.
PIMCO’s commodities portfolio manager said in October he was positive on gold’s outlook and has been selling gold puts, a bullish strategy.
Meanwhile, Teacher Retirement System of Texas also trimmed its gold ETF stake to 479,600 shares in Q3 from 499,600 shares in Q2.
George Soros eliminated his stake in Goldcorp Inc (G.TO: Quote, Profile, Research,Stock Buzz) and exited massive put options in Market Vectors Junior Gold Miners ETF (GDXJ.P: Quote, Profile, Research, Stock Buzz). However, he also initiated a stake in the larger-cap Market Vectors Gold Miners ETF and kept its calls in Barrick Gold Corp (ABX.TO: Quote, Profile, Research, Stock Buzz).
Boston-based Baupost Group, one of the industry’s most-revered hedge funds run by Seth Klarman, dissolved its stakes in several large-cap Canadian gold mining companies after aggressively adding them in the second quarter, and he left his 21.7 million stake in NovaGold Resources Inc (NG.TO: Quote, Profile, Research, Stock Buzz) intact.
Hedge fund managers who were bullish on gold a year ago, including Third Point’s Daniel Loeb, Omega Advisors’ Leon Cooperman and Eton Park’s Eric Mindich, have all eliminated their stakes in gold ETFs and gold equities by the end of the third quarter.
Institutional investors’ massive stakes in SPDR Gold Trust have tremendous influence in gold prices as redemptions of their massive ETF mean dumping the metal in the open market.
(Reporting by Frank Tang; Editing by Meredith Mazzilli, Bob Burgdorfer and Lisa Shumaker)
 
Source: http://www.reuters.com/article/2013/11/15/us-hedgefunds-filings-gold-idUSBRE9AE02820131115

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