THE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP - November 24, 2010

As we look at today’s set up for the S&P 500, the range is 22 points or -0.82% downside to 1171 and 1.04% upside to 1193.  Equity futures are trading firmer to fair value and close to session peaks as macro factors take centre stage as yesterday's geopolitical storm takes a breather.

  • A123 Systems (AONE) CFO Michael Rubino to leave in Jan. 2011
  • Cabot Oil & Gas (COG) selling $150m 
  • Guess? (GES) boosts FY 2011 EPS forecast above est.
  • McMoRan Exploration (MMR) plans to issue $900m equity-linked securities upon PXP close
  • TiVo (TIVO) 3Q loss-shr wider than est. 
  • Verigy (VRGY): Sees 1Q adj. EPS no >2c vs est. 17c
  • Oracle (ORCL) won a $1.3b jury verdict against rival SAP for copyright infringement by a now-defunct software maintenance unit

ECONOMY

Economic data today and events with estimates:

  • MBA mortgage applications - +2.1% vs. down -14.4%
  • 8 a.m.: Soybean crush, soyoil reserves, Oct.
  • 8.30 a.m.: Durable goods orders, Oct., est. 0.1% (ex. transportation, est. 0.6%)
  • 8.30 a.m.: Capital goods orders nondefense ex air, Oct. est. 1%
  • 8.30 a.m.: Personal income, Oct., est. 0.4%; personal spending est. 0.5%
  • 8.30 a.m.: Initial jobless claims, Nov. 20, est. 435k; continuing claims, Nov. 13, est. 4,275k
  • 9.55 a.m.: Uni. of Michigan Confidence, Nov. F, est. 69.5
  • 10 a.m.: House price index, M/m, Sept., est. unch.
  • 10 a.m.: House price purchase index, 3Q, Q/q, est. -1.1%
  • 10 a.m.: New home sales, Oct. M/m, est. 1.6%
  • 10.30 a.m.: DOE Inventories, Nov. 19
  • 12 p.m.: EIA Natural Gas Storage Change, Nov. 19, est. unch.

 PERFORMANCE

  • One day: Dow (1.27%), S&P (1.43%), Nasdaq (1.46%), Russell 2000 (1.02%)
  • Month-to-date: Dow (0.74%), S&P (0.21%), Nasdaq (0.50%), Russell +2.36%
  • Quarter-to-date: Dow +2.30%, S&P +3.46%, Nasdaq +5.33%, Russell +6.48%
  • Year-to-date: Dow +5.83%, S&P +5.89%, Nasdaq +9.95%, Russell +15.12%
  • Sector Performance: Energy (1.96%), Materials (1.92%), Financials (1.57%), Tech (1.47%), Consumer Disc (1.48%), Healthcare (1.45%), Industrials (1.38%), Consumer Spls (1.18%), Utilities (1.09%).

 EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: 1697 (-1755)  
  • VOLUME: NYSE: 1023.35 (+11.38%)
  • VIX: 20.63 +12.30% - YTD PERFORMANCE: (-4.48%)
  • SPX PUT/CALL RATIO: 1.99 from 2.21 -10.21%  

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 14.55 -0.804 (-5.236%)
  • 3-MONTH T-BILL YIELD: 0.15%  
  • YIELD CURVE: 2.32 from 2.31

COMMODITY/GROWTH EXPECTATION:

  • CRB: 297.69 -0.11%
  • Oil: 81.25 -0.60%
  • COPPER: 371.10 -1.36%
  • GOLD: 1,380.10 +1.60%

CURRENCIES:

  • EURO: 1.3393 -1.44% - NEUTRAL
  • DOLLAR: 79.681 +1.27%  - BULLISH

OVERSEAS MARKETS:

European markets:

  • FTSE 100: +0.67%; DAX +1.16%; CAC 40 +0.47%
  • European markets opened higher, major indices gaining around +0.7%, before continuing concerns over peripheral Europe and North Korean News Agency report that South Korea's actions are driving the peninsula to the brink of war led markets to turn mixed.
  • S&P's downgrade of Ireland's sovereign credit rating two notches to 'A' weighed, with political and financial uncertainty remaining ahead of the country's announcement of its austerity plan later today.
  • Better than expected German IFO data and an unrevised Q3 UK GDP reports provided some support.
  • Commodity related shares were initially amongst the leading gainers, before reversing gains and along with technology and bank shares currently lead declining sectors.
  • Advancing sectors lead decliners 10-8, with chemical and travel & leisure the leading gainers. US futures trade lower
  • Danone to buy YOCREAM International for $39.82/share in cash
  • German Nov IFO business climate index 109.3 vs consensus 107.4, expectations 106.3 vs consensus 104.7, current conditions 112.3 vs consensus 110.3
  • UK Q3 GDP +2.8% y/y vs consensus +2.8%

Asian markets:

  • Nikkei (0.85%); Hang Seng +0.6%; Shanghai Composite +1.12%
  • Asian markets were mixed today as fears about tensions on the Korean peninsula eased when South Korea stopped falling after opening down.
  • On bargain-hunting, large-cap banks lifted China even though Industrial and Commercial Bank of China plunged by the daily 10% limit on resuming trade after completing a $6.8B rights issue.
  • Banks, property stocks, and resource-related stocks rebounded in Hong Kong, but investor sentiment remained fragile.
  • Australia closed flat, shedding opening losses as Telstra and Woolworths gained 1% each. Investors moved away from risky assets on the Korean tensions.
  • Taiwan fell, but Digital China TDRs rose 3% on their trading debut. Acer edged down on announcing its entry into tablet PCs.
  • Blue chips were sold in Japan as the market opened with a 2% loss. But some of the loss was recovered as concerns about the North-South Korea situation dissipated.
  • Japan October department-store sales +0.6% y/y; Tokyo October department-store sales +2.7% y/y; both figures are the first time in 32 months that increases have been recorded.

Howard Penney
Manging 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