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TODAY’S S&P 500 SET-UP - October 27, 2010

As we look at today’s set up for the S&P 500, the range is 25 points or -1.66% downside to 1166 and 0.45% upside to 1191.  Equity futures are trading below fair value having finished narrowly in positive territory on Tuesday after indices pared earlier losses. A stronger dollar has dampened risk appetite across Asia and Europe as investors curtail expectations for QE and look to cover naked short dollar positions ahead of next week's FOMC meeting. Earnings will again take center stage, while Sep Durable Goods and New Home Sales are the primary economic releases.

  • Aflac (AFL) 3Q rev., EPS beat ests.
  • Broadcom (BRCM) 3Q rev. beat est., said it is to acquire Percello for ~$86. Offers $600m senior notes
  • Buffalo Wild Wings (BWLD) sees net earnings growth next year below est. 3Q adj. EPS beat est.
  • C.H. Robinson Worldwide (CHRW) 3Q rev. missed est.
  • Delphi Financial Group (DFG) 3Q operating EPS, rev. beat est.
  • DeVry (DV) 1Q EPS, rev. beat est.
  • DreamWorks Animation SKG (DWA) 3Q EPS beat est.
  • Equinix (EQIX) sees 2011 rev. above est.
  • F5 Networks (FFIV) announces buy back of up to $200m shares and 4Q adj. EPS beat est.
  • Fiserv (FISV) 3Q EPS beat est., affirmed 2010 EPS forecast
  • Illumina (ILMN) 3Q EPS, rev. beat ests.
  • JDA Software (JDAS) 3Q adj. EPS beat ests, said it sees achieving higher end of 2010 software rev. forecast range
  • McKesson (MCK) reaffirmed its 2011 fiscal earnings forecast of $4.72 to $4.92 a share. Earnings showed positive impact of non-cash, pre-tax asset impairment charge of $72m in Technology Solutions
  • Molex (MOLX) forecast 2Q EPS below est.
  • Netgear (NTGR) 3Q adj. EPS beat est., forecast 4Q rev. above est.
  • Novellus Systems (NVLS) 3Q adj. EPS beat est. 
  • Panera Bread (PNRA) sees 2011 EPS above est. 
  • Western Union Co. (WU) 3Q EPS beat est, raised its outlook for the year

 PERFORMANCE

  • One day: Dow +0.05%, S&P 0.00%, Nasdaq +0.26%, Russell 2000 (0.14%)
  • Month/Quarter-to-date: Dow +3.54%, S&P +3.89%, Nasdaq +5.43%, Russell +4.55%
  • Year-to-date: Dow +7.11%, S&P +6.33%, Nasdaq +10.05%, Russell +13.04%
  • Sector Performance: Consumer Disc +0.4%, Energy +0.3%, Tech +0.1%, Financials +0.1%, Telecom +0.1%, Utilities (0.2%), Materials (0.2%), Industrials (0.3%), Healthcare (0.3%), Consumer Spls (0.4%)

 EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: -239 (-832)  
  • VOLUME: NYSE - 966.37 (-4.02%)
  • MARKET LEADING/LAGGING STOCKS YESTERDAY: Coach +11.92%, Natl Oilwell +8.46% and Carnival +6.37%/Lexmark -20.98%, Tellabs-13.15% and Regions Financial -7.82%.
  • VIX: - 20.22 +1.86% - YTD PERFORMANCE - (-6.73%)
  • SPX PUT/CALL RATIO: - 1.97 from 1.91 +3.22%

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD - 16.06 -0.609 (-3.651%)
  • 3-MONTH T-BILL YIELD 0.14%    
  • YIELD CURVE - 2.27 from 2.22

COMMODITY/GROWTH EXPECTATION:

  • CRB: 301.29 +0.33%
  • Oil: 82.55 +0.04% - BULLISH
  • COPPER: 386.90 +0.16% - OVERBOUGHT
  • GOLD: 1,339.05 +0.27% - BULLISH

CURRENCIES:

  • EURO: 1.3864 -0.69% - BULLISH
  • DOLLAR: 77.708 +0.78%  - BEARISH

OVERSEAS MARKETS:

European markets:

  • FTSE 100: (0.49%); DAX: 0.5%; CAC 40: 0.15%
  • European markets opened lower as investors reviewed a mixed set of European earning releases and a stronger US dollar weighed on commodity prices sending the sectors lower.
  • Results from SAP and Heineken saw their shares decline whilst Deutsche Bank bucked the trend post its Q3.

Asian markets:

  • Asian Markets: Nikkei +0.1%; Hang Seng (1.9%); Shanghai Composite (1.46%)
  • Asian markets were mostly down today.
  • A stronger US dollar led to sell-offs in materials and commodities stocks.
  • Japan finished flat after a rollercoaster day.
  • South Korea fell as investors waited for earnings reports later this week; sentiment was dampened when Q3 GDP growth slowed sequentially. 
Howard Penney
Managing Director

THE DAILY OUTLOOK - levels and trends

THE DAILY OUTLOOK - S P

THE DAILY OUTLOOK - VIX

THE DAILY OUTLOOK - DOLLAR

THE DAILY OUTLOOK - OIL

THE DAILY OUTLOOK - GOLD

THE DAILY OUTLOOK - COPPER