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TODAY’S S&P 500 SET-UP - November 10, 2010

As we look at today’s set up for the S&P 500, the range is 34 points or -0.94% downside to 1202 and 1.86% upside to 1236.  Equity futures are trading higher following yesterday’s lower close on Wall Street and ahead of key claims data later today. Economic data indicating slowing imports in China triggers concern over the demand outlook, keeping European equities under pressure.

Following some market speculation, the Bank of China confirmed it raised the reserve ratio for banks by 50 bps. In MACRO data today we have September Trade Balance and Initial Jobless Claims.

  • Briggs & Stratton (BGG) cut FY 2011 EPS forecast to $1.13-$1.35 from $1.20-$1.40, vs est. $1.29
  • Global Indemnity (GBLI) said it will cut U.S. workforce by 25%, close underperforming facilities
  • Grand Canyon Education (LOPE) reported 3Q EPS 28c vs est. 30c
  • Higher One Holdings (ONE) sees 4Q adj. EPS 12c-14c vs est. 11c
  • Insulet (PODD) raised full-year sales forecast to $95m-$98m vs est. $97.1m
  • Invesco (IVZ): Morgan Stanley said it will sell its $717m stake in 30.9m secondary offering
  • Jamba (JMBA) said it sees 2011 comp. sales up 2%-4%
  • Medidata Solutions (MDSO) reported 3Q adj. EPS 29c vs est. 18c
  • Ngas Resources (NGAS) reported 3Q loss-shr 6c vs est. loss- shr 5c; said it is evaluating options including possible sale
  • Starwood Property Trust (STWD) boosted Q dividend to 40c-shr from 33c-shr, in line with est.; 3Q core EPS beat est.
  • Tesla Motors (TSLA) reported 3Q rev. $31.2m vs est. $28.1m
  • Tennant (TNC) boosted Q dividend to 17c-shr from 14c-shr
  • Weight Watchers International (WTW) boosted full-year EPS forecast to $2.47-$2.52 vs est. $2.47
  • Werner Enterprises (WERN) says it will pay special one-time dividend of $1.60-shr in addition to regular div.

 PERFORMANCE

  • One day: Dow (0.53%), S&P (0.81%), Nasdaq (0.66%), Russell 2000 (1.46%)
  • Month-to-date: Dow +2.05%, S&P +2.55%, Nasdaq +2.22%, Russell +3.22%.
  • Quarter-to-date: Dow +5.18%, S&P +6.33%, Nasdaq +8.21%, Russell +7.38%.
  • Year-to-date: Dow +8.81%, S&P +8.82%, Nasdaq +12.95%, Russell +16.09%
  • Sector Performance: Financials (2.2%), Materials (1.6%), Industrials (0.9%), Consumer Disc (0.9%), Utilities (0.6%), Healthcare (0.5%), Consumer Spls (0.4%), Tech (0.3%), Energy (0.3%), Telecom (0.1%)
  • MARKET LEADING/LAGGING STOCKS YESTERDAY: Priceline +8.14%, EQT Corp +5.08% and Range Resources +4.57%/Dean Foods -17.95%, AK Steel -5.50% and HPC Inc. -5.38%.

 EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: -1448 (-1210)  
  • VOLUME: NYSE: 1112.05 (+22.28%)
  • VIX: 19.08 +4.32% - YTD PERFORMANCE: (-11.99%)
  • SPX PUT/CALL RATIO: 1.59 from 1.25 +27.54%  

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 17.00 -0.101 (-0.592%)
  • 3-MONTH T-BILL YIELD: 0.13%
  • YIELD CURVE: 2.26 from 2.19

COMMODITY/GROWTH EXPECTATION:

  • CRB: 319.11 +1.22% - up 9 straight days
  • Oil: 86.72 -0.39% - BULLISH
  • COPPER: 404.30 +2.19% - BULLISH
  • GOLD: 1,422.75 +1.25% - BULLISH

CURRENCIES:

  • EURO: 1.3850 -0.65% - BEARISH - looking to be down for 4 days in a row
  • DOLLAR: 77.443 +0.54%  - BULLISH

OVERSEAS MARKETS:

European markets:

  • Markets are trading in the red hit by data that indicated slowing imports in China suggesting the growth is slowing.
  • Basic Resources and Energy sectors are among the worst performers on demand concern.
  • Utilities, Health Care are among the four sectors trading above the gain line.
  • France Sept Industrial production +0.1% m/m vs consensus +0.4%  

Asian markets:

  • Nikkei +1.40%; Hang Seng (0.9%); Shanghai Composite (0.63%)
  • Asian markets were mixed today.
  • On foreign sales figures, carmakers were strong in South Korea, and brokerages joined them on the stock market’s recent steady rise. Korea Exchange Bank rose 2% on results and promising a dividend, but other banks fell on caution before the central bank’s policy decision tomorrow.
  • Technology stocks were also down.
  • Australia reversed early gains, with profit-taking in banks and resource stocks taking the market down.
  • Hong Kong and China fell on concerns that China may raise interest rates after the country reports inflation figures tomorrow. Being particularly rate-sensitive, banks fell 1-2% and property shares dropped 4-5%.
  • Pharmaceuticals rose in China on expectations that their prices will rise after the government told them to increase their quality. In Hong Kong, Bank of China and Bank of Communications lost 3% each, as they were said to have had their reserve requirements raised.
  • China October trade surplus $27.15B vs consensus $26.4B.

Howard Penney
Managing Director

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THE DAILY OUTLOOK - OIL

THE DAILY OUTLOOK - GOLD

THE DAILY OUTLOOK - COPPER