The major indexes declined to major support levels from the August/September decline and held at those levels into the close ahead of the three-day weekend. Assuming China does not implode over the weekend this could be a potential rebound point.
The market had multiple major headwinds on Friday. First, the Asian and European markets closed down again with the Shanghai Composite losing -3.5% for the day and -8.96% for the week for a -22.6% decline from the December high of 3,684 to put it back into a bear market. The SSEC is now -44% off its June 2015 high at 5,166. The chart suggests the decline will continue.
The European markets were down more than -2% and that was also a negative for the U.S. open.
Also weighing on the U.S. markets was falling oil prices. WTI collapsed and lost more than 10% for the week to close at $29.44 and the lowest close since November 2003. The market typically trades in tandem with oil prices but twice in the last year, the S&P resisted the downward pull for several weeks but eventually caught up when the decline in crude prices accelerated.
Last week I elaborated on why crude prices were going to continue lower and I will not go through it again but I do expect to see $25 tested, if not lower. That should have a negative impact on the S&P. However, when crude prices begin to firm in April/May it will have a huge impact to the upside on the S&P.
Adding to the downdraft was an implosion in the financial stocks. JPM, Citi and Wells Fargo all beat earnings but their shares crashed. Morgan Stanley (MS) lost -4.3%, Citi -6.4%, Wells Fargo -3.6% and JP Morgan -2% to name a few. The financial ETF (XLF) declined -2.2%. The financial sector now has twice the weighting in the S&P than the energy sector.
Financials were falling on weak economic reports and the potential for the next rate hike to be postponed to July or later. According to the CME futures the chance of a March rate hike have fallen from 50% to 35% with June the first month with a better than 50% chance at 54%. The chances of a hike had been pushed out to July or later until NY Fed President, William Dudley said in a speech that he still sees rates on a steady trajectory higher. This was contrary to St Louis Fed President James Bullard on Thursday when he said the fall in oil prices were messing up the inflation expectations and could delay the rate hike decision process.
Hampering the Fed's decision process was the unexpected decline in retail sales for December. Sales fell -0.1% with holiday buying of apparel, electronics and general merchandise showing declines. Restaurants showed a gain thanks to the falling gasoline prices. Building material stores and furniture also posted minor gains.
Retail sales have risen only once in the last five months despite the very low gasoline prices. Consumers are keeping the money in their pocket or using it to pay down debt. There has only been one instance of two consecutive months of decent gains since late 2014.
The NY Empire State Manufacturing Survey for January fell from -4.6 to -19.4 and the biggest decline since 2009. The internal components were terrible. New orders fell from -6.2 to -23.5 while backorders improved only slightly from -16.2 to -11.0. Employment also improved slightly from -16.2 to -13. The gap between new orders and production fell from +5.9 to -17.5. There is no way to interpret this chart in a bullish manner.
Industrial Production for December declined -0.4% compared to -0.6% in November. Analysts were expecting only a -0.1% decline. Capacity utilization fell from 76.9 to 76.5% and the lowest level in more than a year.
Business inventories for November declined -0.2% after zero gain in October. Total business sales declined -0.2%, wholesalers fell -0.3% and manufacturers dropped -0.2%.
The Producer Price Index (PPI) for December declined -0.2% after a +0.3% gain in November. Analysts had expected a -0.1% decline. Goods prices fell -0.7% with core unprocessed goods falling -6.5%. On a year over year basis prices are down -1.1% with goods prices down -3.9%. That is the biggest decline in more than five years.
Consumer Sentiment for January rose slightly from 92.6 to 93.3. This is probably due to the falling fuel prices and the left over holiday cheer. Apparently, the people interviewed for the sentiment survey were not investors in the equity market.
The present conditions component declined from 108.1 to 105.1 and the expectations component rose from 82.7 to 85.7.
The surplus of negative economic numbers caused the Atlanta Fed to lower their real time GDPNow forecast from 0.8% to 0.6% GDP growth in Q4. That forecast is moving ever closer to zero or even negative growth for the quarter. There are only two more updates before the government releases its first estimate of the Q4-GDP on Jan 29th. You can see in the table below how the forecast has declined as each economic report showed progressively more negative numbers.
The yield on the ten-year treasury fell under 2% at the open on Friday but recovered slightly by the close. The buying in treasuries is definitely not projecting another rate hike in the near future. This is a flight to quality because of the falling economics and weakness in the Asian markets.
The economic calendar for next week is weighted to the housing sector with three major reports. Unless there is a major miss of expectations, I do not expect them to move the market. The Philly Fed Manufacturing Survey on Wednesday is the most important report for the week. The report has been in contraction for four consecutive months with December the worst reading at -10.2. To expect the report to suddenly show expansion at +2.0 is delusional.
The big news for the week may be the grouping of Chinese economics on Monday evening. This is like winning the Chinese lottery to have all of these reports on a day when our markets are closed. This is a major reason for the sharp selloff in equities on Friday. Nobody wanted to be long over a three-day weekend when Chinese data is likely to be negative and the possibility of their markets going into free fall.
There were no new splits announced last week.
For the full split calendar click here.
Sarepta Therapeutics (SRPT) saw its stock cut in half by the FDA without the benefit of a stock split. The FDA regulators posted a negative review of the company's experimental muscular dystrophy treatment ahead of a high profile meeting next week. Sarepta has been seeking approval of the drug eteplirsen to treat the debilitating disease. The agency posted a negative review ahead of next week's meeting suggesting the approval is not going to be forthcoming. Shares fell from $31.63 to $14.25 a -55% decline.
Chipotle Mexican Grill (CMG) rose +12% for the week after the company's presentation at the ICR Conference in Orlando. Analysts met with the company and received the details on how they are planning to avoid future occurrences of food borne illnesses and win back customers. The FDA is expected to pronounce the company free of E.coli soon since there have not been any new outbreaks since late November. The company said it was going to close all 1,900 stores on February 8th for a companywide training session via satellite. CEO and founder Steve Ells will "thank and encourage" employees and discuss upcoming changes to the food processing methods. Shares hit $402 on Tuesday and closed at $475 on Friday. That is a lot of fire in those burritos.
Electronic Arts (EA) was upgraded by Bank of America to buy from neutral. The analyst said EA was attractive again after a 15% pullback. They reiterated their $81 price target and the stock closed at $66. The bank sees strong potential in the video game lineup for 2016. The NPD group said Call of Duty: Black Ops 3 was the top-selling video game at U.S. retailers in December. Unit sales have surpassed 20.5 million in 2015 and more than the 18 million in the prior version "CoD: Advanced Warfare." December sales also saw the EA hit "Star Wars Battlefront" and "Fallout 4" was in third place.
Wynn Resorts (WYNN) shares spiked +13% on a bad tape after Wynn reported preliminary results for Q4 that beat analyst estimates. Adjusted earnings will be $156-$164 million for Macau and in line with estimates. However, earnings from Las Vegas will be in the range of $123-$131 million and analysts were expecting $111 million.
Disney (DIS) was downgraded to underperform or the equivalent of a sell rating by Barclays. The analyst said Netflix is becoming increasingly competitive and Disney will be fighting the cord cutting at ESPN for another quarter until we get closer to the Olympics. Analysts have really been raining on the Disney parade for the last quarter and shares are nearly $30 off the November high of $120. There is strong support at $90 and I would expect the decline to end there. The company has too much happening in 2016 to ignore it. Earnings are Feb 9th.
After six years of construction, Shanghai Disney will open in June. It will be the second largest Disney park and have six themed lands. The park will cover nearly 1,000 acres or 3 times the size of the Hong Kong Disneyland Park and cost $5.5 billion. They are expecting millions of visitors. More than 330 million people live within 3 hours of the park. That is equal to the population of the entre USA. Annual visitations are expected to be 60-75 million people. Disney World in the USA has 45 million visitors annually.
Walmart (WMT) announced it was closing 269 stores (3%) with 154 of those in the USA. More than 10,000 U.S. workers will be eliminated. In 2011, they started the Walmart Express concept of smaller stores and they never caught on. One of the big draws for Walmart is the "everything under one roof" concept and consumers were disappointed with the small store concept. They are closing all 102 of the Express stores and 23 neighborhood markets. They will also close 12 supercenters, 6 discount stores, 4 Sam's Clubs and 7 stores in Puerto Rico. They are also closing 60 stores in Brazil because of economic conditions in that country. This is a good move for Walmart and shares would have been higher except for the negative market.
They are closing the Walmart closest to me. They will close forever at 7:PM on Sunday. I asked the manager on Saturday when she was notified and she said Friday morning. That is some seriously fast movement to come in on Friday morning and find out the store is closing in two days. They discounted all the perishable items by up to 50% but everything else is going back to the warehouse.
Intel reported earnings on Thursday after the bell and the stock was crushed on Friday. Intel reported earnings of 74 cents compared to estimates for 63 cents. Revenue of $14.91 billion posted a minor beat. Operating income was $4.3 billion. That would appear to be a good report. However, analysts and investors found multiple reasons to complain. Revenue only rose +1%. Earnings declined -$200 million from the year ago quarter. The datacenter segment had revenue of $4.3 billion that missed estimates for 4.4 billion. The PC division saw revenue of $8.8 billion that beat estimates but grew only 1%. Gross margins declined -1.1%.
Intel posted great earnings and the CEO was very positive but investors wanted more growth not just more earnings. Shares declined -9% on the news.
Citigroup (C) reported adjusted earnings of $1.06 compared to estimates for $1.05. Lower legal and regulatory costs helped fuel the earnings. They earned $3.34 billion for the quarter compared to $344 million in the year ago quarter when they suffered $3.6 billion in legal costs. Citi was also able to sell $32 billion in assets from Citi Holdings. That is the "bad bank" entity that was formed to hold all the toxic assets from the financial crisis. Total revenues were $18.46 billion, up from $17.9 billion. Expenses declined -23% but most of that was a reduction in legal costs.
Citi had to set aside $250 million to cover potential losses from its energy portfolio. If oil declined to $25, they will have to more than double the reserve to $600 million for the first half of 2016. Citi has more than $58 billion in energy loans. Shares declined because of the energy exposure.
US Bank (USB) reported earnings of 79 cents that were in line with analyst estimates. Revenue of $5.16 billion exceeded estimates for $5.11 billion. Provisions for loan losses rose +5.9% to $305 million due to concerns over energy defaults. Total allowance for doubtful loans was $4.3 billion. Nonperforming loans declined -16.7% to $1.5 billion. Total loans increased 4.2% to $256.7 billion. Deposits rose +6.9% to $294.5 billion. The earnings were solid but unexciting.
Wells Fargo (WFC) reported earnings of $1.03 compared to estimates for $1.02. Revenue was $21.59 billion and slightly less than the $21.7 billion estimate. Wells earned $5.71 billion for the quarter. The bank reported losses of $118 million on loans to energy companies and has $114 million in existing commercial loans that are more than 90 days past due. That compares to $47 million in the year ago quarter. Mortgage originations slowed to $47 billion but that was mostly a seasonal slowdown. Total loans rose +7% to $912.3 billion. Total deposits rose +6% to $1.2 trillion. The CEO said there was no recession in sight, yet.
Earnings will increase next week with the calendar starting to fill up. However, the number of high profile companies is still small. Netflix, Starbucks, Goldman Sachs, IBM and GE will be the most watched next week. The Nasdaq is not going to get much help from the hand full of tech companies reporting. The Dow will have the most to gain or lose with UNH, GS, AXP, TRV, VZ, IBM and GE reporting.
The two stocks I will be watching the most will be Netflix and Starbucks.
Crude oil declined to $29.13 intraday on expectations for the Iranian sanctions to be lifted any day now. The IAEA was expected to issue its report this weekend on Iran's compliance with the rules of the agreement. That happened on Saturday and sanctions are being removed. Iran's exports were on pace to hit a nine-month high in January at 1.10 mbpd even before the sanctions are lifted. They have 30.0 million barrels in tankers anchored in the Persian Gulf and they claim they are going to increases production by 500,000 bpd immediately and by another 500,000 bpd by the end of March and 500,000 bpd more by the end of 2016. This tsunami of oil flowing into a market that is already dealing with a 1.2 mbpd surplus is going to push prices lower.
Brent prices fell to $28.82 intraday on the worries over Iran's oil. The Brent contract represents "water borne" crude in Europe and that is where Iran's volumes will be going in addition to India and China. That is the lowest price since February 2004.
Most analysts believe we will see $25 per barrel for WTI in the days ahead. However, the pendulum always over swings on both the upside and downside so there is no way we can accurately predict the bottom. We could see prices under $25 but only briefly. At least that is my opinion.
Active rigs declined -14 last week but only one of those was an oil rig. The rest were gas rigs. U.S. production rose to a new four-month high at 9.227 mbpd despite the rapid decline in active rigs. The lack of a decline in the U.S. is going to pressure prices even more.
As long as oil prices continue to decline, the equity market is likely to follow.
The Baltic Dry Shipping Index ($BDI) sank to another record low at 373. For the period January 8-9th there were ZERO ships moving between the U.S. and Europe. All ships in the Atlantic were parked in harbors or moored offshore. I cannot remember when that has happened before.
The Commodity Index ($CRB) hit another 44 year low on Friday. This only happens in periods of global recession.
The Bureau of Transportation Statistics said "Freight volumes in the U.S. have fallen year on year for the first time since 2012 and before that the recession of 2009." Also, "The total volume of freight moved by road, rail, pipeline, inland waterways and air cargo in November was 1.1% lower than the corresponding month a year earlier." Commodity prices are so low that farmers have delayed shipping some grains, especially corn and soybeans, in hopes the prices will rise.
The Dow Delivery Index and Dow Railroad Index are at two-year lows and dropping fast. If you want to know what the economy looks like when it is heading into a recession this is it.
There is very little I can say positive about the markets last week. Multiple support levels were broken and the average index decline was about -2.5%. That puts the Dow down about -8.25% for the year and -9.9% from the high at 17,750 on December 29th. That is a 10% correction in only 13 trading days.
The S&P collapsed back to the August lows at 1,867 and then dipped another ten points to 1,857 before rebounding on Friday afternoon. In theory, 1,867 should have been a good retest point that triggers a rebound. There was no material rebound.
However, with a flood of Chinese economic data coming out on Monday and the U.S. markets closed there were very few traders that wanted to be long ahead of that event. Discretion is the better part of valor. Translated that means it is good to be brave but it is also good to be careful. Investors were careful on Friday and exited positions rather than risk being caught in a market meltdown on Tuesday.
It was also option expiration Friday. Volume was huge at 10.8 billion shares and 9:1 declining volume over advancing volume. Declining stocks were 6:1 over advancers. The most telling statistic was the 2,127 new 52-week lows. That is the most I can remember since the financial crisis.
Note in the graphic below the steady increase in the number of new 52-week lows and the number of declining stocks. The market is getting worse, not better, but we should be getting close to an oversold capitulation day.
The percentage of S&P stocks still above their short-term 50-day average has fallen to 11.4%. Only 21.4% are still above their long-term 200-day average. We are clearly extremely oversold although not yet at the same levels we saw in August.
The worry over the energy sector and the potential for up to 30% of the producers and service companies to file bankruptcy has caused the High Yield market to continue its decline. The chart below shows the correlation between the HYG bond fund in red and the S&P in black. Note that the high yield ETF ALWAYS leads the SPX and it is currently leading it down. Add to that the correlation between oil prices and the SPX and they are also leading it down. It is tough to argue market direction when there are major factors leading the S&P lower.
The S&P "should" attempt to hold the support at 1,867 but it will likely lose the battle because of all the factors I listed above.
Since 1995 if you had exited/shorted the markets whenever the 10-month moving average crossed under the 21-month on the S&P and gone long the markets when the average crossed back over the 21-month line you would have profited from nearly all of the big moves both up and down. This is a VERY long-term indicator and it has not failed in more than 20 years.
The 10-month average is now 2,033 and the 21-month is 2,020. They are right on the verge of a bearish cross. These are monthly averages so it may take another month for them to actually cross even though the S&P is already down to 1,880. That is the beauty of this indicator. It smoothes out all the week-to-week volatility. The big money funds and investors do follow these long-term strategies. This appears to be warning of a long-term decline ahead if those averages cross. However, NO indicator or strategy is foolproof.
The Dow broke below support at 16,000 and slowed when it reached the October 2014 support low at 15,855. However, unless those Dow components reporting next week all have blowout earnings there is a good chance we will retest the August low at 15,370. There is also the January 2014 support low at 15,350. If we return to that level, we will have erased two years of gains.
The July 2015 closing high was 18,312. A dip to 15,350 would be a -16.2% decline. The financial stocks are crashing with Goldman at a two-year low, Citi at a three-year low and Wells Fargo on the verge of a two-year low. Exxon is only about $7 above a five-year low with Chevron only $10 above a similar level. If oil prices continue to decline as expected to $25 or even lower, those stocks are going to make those new lows and drag the Dow lower.
For most of last year, we continually warned that the market was being supported by the ten largest tech stocks and once those stocks failed the market would quickly correct. Those stocks have failed.
The chart of the Nasdaq advance/decline line for the last three years supports the fact that breadth was very slim. For most of 2015, the A/D line declined rather than rose as fewer stocks took part in the rise to the July market top. The A/D line is approaching the lows seen in October 2012. On the positive side, that was the low point just ahead of a strong 15-month rally in the tech sector. We can expect the Nasdaq to continue declining until the A/D line reverses to the upside.
Friday was a bad day for the Nasdaq with a -126 point, -2.74% loss. All the prior momentum favorites are still in the losing column as funds continue to take profits in very high volume. Eventually they are going to run out of stock but the market can still move lower while we wait. Many of the tech stocks have reached what most analysts call bargain levels but nobody is bargain shopping just yet. Netflix at $102, Facebook at $93, Starbucks at $57, Amazon $565, Priceline under $1,100, etc.
The Nasdaq dipped under the September low of 4,487 and nearly reached 4,400. This is still well above the August flash crash low of 4,292. The index has erased all the gains from 2015 and is now down -10.4% for the year. Any further declines would probably target the 4,300 level.
Resistance is well above at 4,700 where it failed three times in the last six days.
The Nasdaq 100 ($NDX) came to a dead stop right on support at 4,085 from Jan 2015. That would be the perfect rebound point in a perfect world. A breakdown there could test the August flash crash low at 3,787.
The Russell 2000 small caps are down -11.28% for the year but -22% from their June highs at 1,295. The drop has been dramatic and the index dipped under 1,000 intraday on Friday.
The small cap A/D line is crashing and the normal strength in December/January was nonexistent.
The Russell is our fund manager sentiment indicator and clearly, sentiment is ugly. I am not expecting the Russell to rebound as long as there is any weakness in China. The low volume small caps are dangerous for funds because they cannot exit positions in a hurry without taking large losses.
Real support on the Russell is well below at 800. Let's hope the 1,000 level tries to hold.
The NYSE Composite is still in free fall because of all the financials and energy stocks listed on the NYSE. The index has declined -17.3% from the May closing high of 11,239.
To recap, falling oil prices, the potential for bankruptcies of up to 30% of the energy sector causing higher loan loss reserves at banks, the declining high yield sector, weakness in China, a projected decline of 5.5% in S&P earnings and weakening economics in the U.S. are all contributing to the market decline.
As an offshoot of those items above, there are numerous rumors of massive liquidation by sovereign wealth funds. With oil revenues down -70% from two years ago and those revenues responsible for the budgets of most oil producing countries, those countries are being forced to liquidate their sovereign wealth funds to pay the bills and fund the governments. Saudi Arabia has enough excess production capacity and more than $500 billion in currency reserves and they are still in serious trouble. They are losing more than $600 million a day in oil revenues at the current prices. The short-term solution is to sell the stocks in your funds.
At some point, something will change and provide a pause point for the markets. Friday's Dow drop at -537 points intraday was due to those factors above plus option expiration and the worry over the Chinese economic numbers due out on Monday while the U.S. markets are closed.
Assuming those numbers are not a disaster and the Chinese markets do not implode on Sunday/Monday nights, we could see a relief rally next week. However, we had a huge up day on Thursday and it was erased in a matter of minutes on Friday. That volatility may have convinced traders to wait on the sidelines until events calm.
Remember, in every prolonged decline we will always get sporadic rebounds fueled by dip buyers and short squeezes. Until those rebounds become progressively higher and longer lasting, we should be careful about plunging our hard-earned money into a lottery ticket on the market.
I would continue to be a watcher not a trader. Be patient. Be cautious. There is always another day to trade as long as you have capital to invest.
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The global equity markets added $30 trillion in market cap since the low in 2011. Since June, they have lost $14 trillion. In the U.S., index ETFs like the SPY, DIA and QQQ have seen more than $1 billion in outflows every day in 2016.
Market Volatility Makes Us Nervous
By Mohamed A. El-Erian
Stock market swings do not matter to most investors, precipitous drops in prices are acceptable if they are followed by sharp rises, and this remains true no matter how long the phase of heightened volatility.
If the above is your investing credo, you can ignore another roller-coaster week in markets, in which the major indices fluctuated wildly, including intraday. On Thursday, for example, the Dow closed 227 points higher after falling more than 360 points on Wednesday. And the sessions were wild on both days.
But volatility does matter to investor positioning, risk appetite and the formation of price expectations. And the longer it lasts, and especially if it is the "volatile volatility" of recent weeks, the more likely it is to be accompanied by a durable decline in markets overall.
Consider this thought exercise: You are driving on a road that has an increasing number of potholes, resulting in quite a bumpy ride. Wouldn't you start worrying about the increasing probability of damage to the car, and slow down?
A similar process is likely to unfold in markets. Some of the greater risk aversion occurs automatically, including among traders and investors who pursue approaches that condition portfolio construction on measures of overall market risk based on volatility (such as VAR, or value at risk). Some of the slowdown will be due to unfavorable revisions in the "risk-adjusted returns" that are critical inputs for asset allocation models. In addition, investors, even though they enjoy the up days, are likely to increasingly worry that the downward phase increases the probability of a more damaging air pocket.
The recent volatility also has undermined the conventional wisdom that investors should "buy on dips" and this week, at least one brokerage house advised clients to "sell the rallies" in this period of heightened market volatility.
Partial indicators suggest that portfolio risk already has been reduced, notably among hedge funds and broker-dealers. There has been some reduction by longer-term institutional and retail investors as well, but it has been limited so far.
This period of heightened volatility is likely to persist given that investors can no longer rely as much on monetary measures to calm the markets, especially now that the systemically important central banks now are pursuing divergent policies. That makes it more likely there will be more durable declines in asset prices as a whole. And, if a comprehensive policy response continues to be delayed, the declines could be quite large given the extent to which market prices have been decoupled from fundamentals.
Iran's nuclear agreement was implemented on Saturday and the process to remove sanctions has begun. Iran will receive more than $100 billion in frozen assets that have been held for years by western nations.
In preparation for the removal of sanctions, Iran has been drilling as fast as possible in an effort to convert some of their 167 billion barrels of proven reserves into production. They have the fourth largest reserves on the planet. Oil minister Bijan Zanganeh said the drilling has been successful and they are prepared to put even more oil on the market than previously thought. As soon as the sanctions are lifted they plan on upping exports by 500,000 bpd. By the end of March, they plan to add another 500,000 bpd. By the end of 2016, they plan on adding another 500,000 bpd. That is 1.5 million barrels per day in an already flooded market. They expect to ramp production to 6.0 mbpd by 2020. They currently sell about 1.0 mbpd. Plus they have more than 30 million barrels stored in tankers in the Persian Gulf. That oil will be for sale immediately.
Iran is preparing to unveil 50 oil and gas projects worth more than $185 billion next week. They will be accepting bids from outside energy companies to develop those projects. Contracts will be up to 25 years and include generous production sharing provisions. The first of these contracts is expected to be signed by the middle of 2016.
Shares of Tyson Foods, Pilgrim's Pride and Cal-Maine Foods fell on Friday after a highly contagious form of bird flu was found in a flock of 60,000 birds in Dubois County, Indiana. The Dept of Agriculture said the H7N8 strain is different from the one that caused the destruction of 50 million birds in 2015. The prior outbreak cost the industry $3.3 billion. Last year the USDA stockpiled millions of doses of vaccine designed to fight the 2015 strain. They will be ineffective against the current outbreak. More than 65 egg and turkey farms are within 6 miles of the affected flock. The area is home to more than 4.5 million egg layers and up to 2 million turkeys. Bird Flu Returns
Earnings are fading fast. Last week analyst downgrades to earnings expectations outnumbered upgrades by the most since 2009 according to Citigroup. Jeffery Gundlach said global growth would slow to 1.9% in 2016 and the weakest since 2009. S&P Capital IQ is predicting a -5.5% decline in S&P earnings. JP Morgan is predicting a -6.7% drop. Bloomberg Article
The bears are gaining. Both bullish and neutral sentiment declined for the week with bearish sentiment approaching 50%. This survey closes on Wednesday so the results do not include the Thursday rebound or the Friday crash.
It just dawned on me why Mayberry was so peaceful and quiet...nobody was married. The single people included Andy, Aunt Bea, Barney, Floyd, Howard, Goober, Sam, Ernest T Bass, the Darling family, Helen, Thelma Lou and Clara. In fact the only one married was Otis and he stayed drunk and in jail.
Enter passively and exit aggressively!
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