TODAY’S S&P 500 SET-UP - November 29, 2010
As we look at today’s set up for the S&P 500, the range is 24 points or -1.38% downside to 1173 and 0.64% upside to 1197. Equity futures are trading above fair value as positive reaction to what was deemed to be a strong start to the pre-Christmas shopping season. Retailers promote online sales as the U.S. heads back to work; overall, the average shopper spent 6.4% more during the Thanksgiving holiday weekend compared with last year, the National Retail Federation said, though it cautioned that this isn’t always indicative of the season.
- Ameriprise Financial (AMP) may be poised to rise as it continues to move into money management from the insurance business, Barron’s reported.
- Berkshire Hathaway (BRK/A) Vice Chairman Charles Munger disposed of $750m in company stock from trust.
- Hewlett-Packard (HPQ) was sued by shareholders in Delaware Chancery Court seeking information about company’s ouster of former CEO Mark Hurd.
- Lions Gate Entertainment (LGF)’s Icahn files proxy nominating 5 to Lions Gate Board: Jay Firestone, Michael Dornemann, Christopher J. McGurk, Daniel A. Ninivaggi, Harold T. Shapiro.
- Siemens AG (SI): American depositary receipts may rise as high as $140-shr as company benefits from restructuring and global economic growth, Barron’s said.
- Steinway Musical Instruments (LVB) may be overvalued even as U.S. demand for luxury items rebounds, Barron’s said.
- Steven Madden Ltd. (SHOO) may rise as the company pares manufacturing costs as much as 15%, beats rivals to the market with new products, Barron’s said.
- One day: Dow (0.85%), S&P (0.75%), Nasdaq (0.34%), Russell (0.52%)
- Month-to-date: Dow (0.24%), S&P +0.52%, Nasdaq +1.08%, Russell +4.18%
- Quarter-to-date: Dow +2.82%, S&P +4.22%, Nasdaq +7.01%, Russell +8.37%
- Year-to-date: Dow +6.37%, S&P +6.66%, Nasdaq +11.7%, Russell +17.16%
- Sector Performance: Telecom (0.35%), Tech (0.44%), Consumer Discretionary (0.46%), Utilities (0.56%), Consumer Staples (0.6%), Industrials (0.73%), Healthcare (0.77%), Financials (1.13%), Energy (1.15%), and Materials (1.23%)
- ADVANCE/DECLINE LINE: -1079 (-3065)
- VOLUME: NYSE - 428.50 (-48.00%)
- VIX: - 22.22 +13.60% - YTD PERFORMANCE - +2.49%)
- SPX PUT/CALL RATIO: - 2.07 from 2.00 +3.66%
CREDIT/ECONOMIC MARKET LOOK:
- TED SPREAD - 14.18 -0.047 (-0.330%)
- 3-MONTH T-BILL YIELD 0.16%
- YIELD CURVE - 2.36 from 2.40
- CRB: 301.13 -0.40% (up 0.75% last week)
- Oil: 83.76 -0.12% - NEUTRAL (up 2.17% last week)
- COPPER: 376.25 -0.11% - BEARISH (down 2.08% last week)
- GOLD: 1,360.10 -1.08% - BEARISH (up 0.46% last week)
- EURO: 1.3242 -0.99% - NEUTRAL (down 3.15% last week)
- DOLLAR: 80.357 +0.79% - BULLISH (up 2.36% last week)
- FTSE 100: +0.26%; DAX: (0.22%); CAC 40: (0.06%)
European markets initially found some stability after the EU/IMF concluded a bailout deal with Ireland over the weekend.
- Additionally the Irish Central Bank set a new minimum capital requirement for Irish banks. After early modest moves higher, major indices turned mixed to negative on market talk of a disappointing Italian bond auction and Portugal's increasing likely need for an international bailout and the worst UK M4 y/y money supply growth since records began.
- Advancing and declining sectors are even 9-9, with insurance, basic resources and food the leading gainers, auto's, travel & leisure and healthcare the leading decliners.
- UK Oct mortgage approvals 47,185 vs consensus 47,000 and prior 47,369
- European Commission's autumn forecast foresees a continuation of the economic recovery currently underway in the EU.
- GDP is projected to grow by around +1.75% in 2010-11 and by around +2% in 2012. Says a softening global environment and the onset of fiscal consolidation, activity is expected to moderate towards the end of the year and in 2011, but to pick up again in 2012 on the back of strengthening private demand
- Labor-market conditions are expected to slowly improve over the forecast horizon, with unemployment rate projected to fall to around 9% in 2012
- Says around half of EU Member States are set to post a lower general government deficit in 2010 than in 2009 deficit is projected to fall in 24 Member States next year. EU as a whole, a deficit of slightly above 5% of GDP is expected in 2011, with a further decline of about 1 percentage point in 2012 as the recovery gains ground.
- Debt ratio is set to remain on an upward path over the forecast horizon
- Nikkei +0.9%; Hang Seng +1.3%; Shanghai Composite (0.2%)
- Asian markets were mixed in light trading today. Miners fell on weaker commodity prices.
- Hong Kong bounced higher in the afternoon, but turnover remained low on worries about pending moves to fight inflation in China. Li & Fung added 5% on US consumer spending over the weekend. But Chinese carmakers dropped 5-8% since their tax exemptions expire tomorrow.
- Exporters lifted Japan slightly on a weaker yen; momentum was lost on caution regarding conflict between the Koreas and European debt.
- Taiwan rose after local elections left the ruling party and its pro-China policies in power. Tourism and real-estate shares rose on hopes more Chinese tourists would visit the island.
- Banks accounted for Australia’s gain, as miners fell.
- China slipped as commodity stocks fell and profit-taking knocked carmakers down. Small-cap pharmaceuticals continued to rise on an assumption that government support was a reason to buy.
- Japan October retail sales (0.2%) y/y vs survey +0.7%.