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THE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP - December 1, 2010

As we look at today’s set up for the S&P 500, the range is 16 points or -0.64% downside to 1173 and 0.72% upside to 1189.  Equity futures are trading back above fair value following Tuesday's choppy and ultimately weaker session. Markets in Europe are trading higher but braced for the results of a small yet important Portuguese 350 day bill auction which if unsuccessful may result in renewed pressure on the single currency and further widening of sovereign spreads. Economic data includes ISM manufacturing, ADP Employment, US auto sales, with the Fed's Beige Book in play.

  • Copart (CPRT) 1Q EPS inline, rev beats est.
  • Corinthian Colleges (COCO): Former CEO Jack Massimino named CEO effective immediately, replacing Peter Waller
  • Enterprise Products Partners LP (EPD) will sell 10.5m units representing partner interests and use the proceeds to cut debt
  • Health Care REIT (HCN) plans to sell 9m shares
  • OmniVision Technologies (OVTI) forecast 3Q profit above est.

 PERFORMANCE

  • One day: Dow (0.42%), S&P (0.61%), Nasdaq (1.07%), Russell 2000 (0.67%)
  • For-the-month: Dow (1.01%), S&P (0.23%), Nasdaq (0.37%), Russell +3.36%;
  • Quarter-to-date: Dow +2.02%, S&P +3.45%, Nasdaq +5.47%, Russell +7.52%
  • Year-to-date: Dow +5.54%, S&P +5.87%, Nasdaq +10.10%, Russell +16.25%
  • Sector Performance: Tech (0.99%), Healthcare (0.92%), Financials (0.55), Consumer Spls (0.46%), Industrials (0.24%), Energy (0.35%), Consumer Disc (0.22%), Utilities (0.13%), Materials 0.06%.

 EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: -964 (-464)  
  • VOLUME: NYSE - 1536.22 (+66.24%)
  • VIX: 23.54 +9.34% - YTD PERFORMANCE: +8.58%
  • SPX PUT/CALL RATIO: 2.12 from 2.24 -5.07%  

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 13.80 -0.710 (-4.894%)
  • 3-MONTH T-BILL YIELD: 0.17% -0.01%  
  • YIELD CURVE: 2.36 from 2.32

COMMODITY/GROWTH EXPECTATION:

  • CRB: 301.41 -0.49%
  • Oil: 84.11 -1.89% - NEUTRAL
  • COPPER: 382.55 +1.54% - BEARISH
  • GOLD: 1,388.42 +1.56% - BEARISH

CURRENCIES:

  • EURO: 1.3038 -0.50% - NEUTRAL
  • DOLLAR: 81.195 +0.45%  - BULLISH

OVERSEAS MARKETS:

EUROPEAN MARKETS:

  • European markets opened higher and extended gains before becoming range bound slightly below the session highs. The FTSE100 and CAC gained as much as +1.2%, the DAX +1.5% as constructive economic data out of China and India aided sentiment.
  • European economic data was broadly supportive.
  • Peripheral markets bounced after recent losses and credit markets improved despite S&P putting Portugal's sovereign credit rating on negative watch yesterday. Market participants await the results of Portugal's T-bill auction. Banks up +3.2%, insurance +2.2% and basic resources +2.0% lead sector gainers.
  • The retail sector (2.3%) is the only sector trading lower led by Carrefour down (8.3%).
  • UK Nov house prices +0.4% y/y vs consensus +0.5%
  • German Oct preliminary retail sales +2.3% m/m vs consensus +1.3%
  • Eurozone Nov final Manufacturing PMI 55.3 vs prelim 55.5
  • France 57.9 vs preliminary 57.5
  • Germany 58.1 vs preliminary 58.9
  • EuroZone 55.3 vs preliminary 55.5
  • UK Nov Manufacturing PMI 58.0 vs consensus 54.6

ASIAN MARKTES:

  • Nikkei +0.5%; Hang Seng +1.1%; Shanghai Composite +0.1%
  • Asian markets ended the day higher after being mixed at lunch.
  • South Korea went up when its November PMI rose on the back of US numbers that beat expectations. Carmakers went up, while tech stocks were mixed.
  • Hong Kong was higher in low volume.
  • After remaining flat in thin trade on a stronger yen and weakness in China, offset by bargain hunting, for most of the day, Japan rallied to a rise by the close.
  • China was flat in extremely low volume, due to a cash squeeze and concerns about inflation data due next week. Retail investors avoided commodity, banking, and transportation shares, seen as vulnerable in case of policy tightening.
  • Australia rallied to finish flat after declining on lower-than-expected economic growth.
  • China November PMI 55.2 vs 54.7 seq.
  • Australia Q3 GDP +2.7% y/y vs survey +3.5%.
  • Japan October housing starts +6.4% y/y. 

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