THE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP - November 12, 2010

As we look at today’s set up for the S&P 500, the range is 27 points or -0.29% downside to 1210 and 1.93% upside to 1237. 

  • California Pizza Kitchen (CPKI) forecast 4Q adj. EPS 5c-7c vs est. 15c
  • Caribou Coffee (CBOU) reported 3Q EPS 8c vs est. 5c (2 ests)
  • Cumberland Pharmaceuticals (CPIX) reported 3Q EPS 5c vs est. 1c
  • Dynavox (DVOX) cuts FY2011 adj EPS forecast to 21c-27c from 56c-62c, vs est. 47c
  • Essex Rental (ESSX) buys Coast Crane for $80m; sees deal adding to earnings, 2011 FCF
  • Finisar (FNSR) sees 2Q adj. EPS 41c-43c vs est. 36c
  • Jefferies (JEF) agrees to sell some ops to Bank of New York subsidiary Pershing; sees small gain on sale
  • Matthews International (MATW) reported 4Q adj. EPS 66c vs est. 64c (3 analysts)
  • Microsemi (MSCC) sees 1Q EPS 36c-39c vs est. 37c
  • Nvidia (NVDA) sees 4Q rev. up 3%-5%, implies $869.2m-$886.1m, vs est. $863.9m
  • Thomas & Betts Corp. (TNB US) says it will sell its Communications Products Business to Belden for $78m in cash
  • Walt Disney (DIS US) reported 4Q adj. EPS 45c vs est. 47c, sees 2011 capex increasing by $1b

 PERFORMANCE

  • One day: Dow (0.65%), S&P (0.42%), Nasdaq (0.90%), Russell 2000 (0.45%)
  • Month-to-date: Dow +1.48%, S&P +2.56%, Nasdaq +1.92%, Russell +4.01%.
  • Quarter-to-date: Dow +4.59%, S&P +6.34%, Nasdaq +7.76%, Russell +8.2%.
  • Year-to-date: Dow +8.20%, S&P +8.83%, Nasdaq +12.62%, Russell +16.97%
  • Sector Performance: Tech (1.54%), Financials (0.98%), Industrials (0.56%), Consumer Disc (0.14%), Utilities (0.06%), Consumer Spls (0.10%), Healthcare +0.29%, Materials +1.03%, Energy +1.10%
  • MARKET LEADING/LAGGING STOCKS YESTERDAY: Gamestop +4.77%, H&R Block +4.40% and Halliburton +4.19%/CISCO -16.03%, JABIL -4.64% and Linear -4.47%.

 EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: 869 (-1566)  
  • VOLUME: NYSE - 949.51 (-15.00%)
  • VIX: 18.64 +0.92% - YTD PERFORMANCE: (-14.81%) - BEARISH TREND
  • SPX PUT/CALL RATIO: 1.64 from 1.61 +2.06%  

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 16.49 0.406 (2.522%)
  • 3-MONTH T-BILL YIELD: 0.13%
  • YIELD CURVE: 2.21 from 2.21

COMMODITY/GROWTH EXPECTATION:

  • CRB: 314.85 -0.71% -
  • Oil: 87.81 flat - BULLISH
  • COPPER: 402.95 +1.33% - BULLISH
  • GOLD: 1,405.75 +075% - BULLISH

CURRENCIES:

  • EURO: 1.3654 -0.62% - BEARISH - Down 3.84% in the last 4 days
  • DOLLAR: 78.217 +0.75%  - BULLISH - Up 3.05% in the last 4 days

OVERSEAS MARKETS:

European markets:

  • FTSE 100: (0.84%); DAX: (0.61%); CAC 40: (1.81%)
  • European markets fell from the open before paring losses.
  • The decline is lead by lingering concerns over the Irish financial crisis and fears China may tighten policy weighed.
  • Regional economic data provided little support.
  • The G20 agreed to move towards market-determined exchange rates and shun competitive devaluation.
  • Peripheral debt spreads were mixed as worries lingered and ahead of supply in Italy.
  • EU statement that new rules concerning bond writedowns would only apply to future issues and German Chancellors comments that EU is ready to deal with any scenario in the Irish financial crisis provided support.
  • All sectors apart from travel & leisure trade lower led by oil & gas and mining sectors down over (2.5%).
  • France Q3 preliminary GDP +0.4% q/q vs consensus +0.5%
  • Germany Q3 preliminary GDP +0.7% q/q vs consensus +0.7%, +3.9% y/y vs consensus +3.7%

Asian markets:

  • Nikkei (1.39%); Hang Seng (1.93%); Shanghai Composite (5.16%)
  • Asian markets followed Wall Street down today, as the region waits for China to raise interest rates.
  • China dropped more than 5% on tightening fears. Property stocks went down on a report that the government is limiting real-estate investment by foreign companies.
  • Renewed worries about European sovereign debt also dampened the mood.
  • Energy stocks declined as oil prices fell.
  • South Korea retreated to flat after earlier being the only market to rise, rebounding from yesterday’s almost-3% fall that was said to be due to a single trade by Deutsche Bank in the last minute of trade on options expiry.
  • National Australia Bank fell 4% on becoming the third major bank to raise interest rates by more than the 25 bp that the country did in its most recent hike; Westpac, which finished flat, made it four of four later in the day.
  • Hi-tech shares fell in Japan on declines in US peers, and exporters went down on concerns about global growth rates. 

Howard Penney
Managing Director