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TODAY’S S&P 500 SET-UP - December 6, 2010

As we look at today’s set up for the S&P 500, the range is 30 points or -2.1% downside to 1199 and 0.35% upside to 1229.  Equity futures are trading below fair value following Friday's late recovery sparked by a leak of Fed Chairman Bernanke's interview for 60 Minutes which went out overnight. Bernanke said the Fed could purchase Treasuries beyond the scheduled $600B on the back of slow normalization of the US unemployment rate suggesting QE3 is a possibility.

In what is expected to be a quiet start to the week, apparent problems within the European Union as how to best to tackle the deepening sovereign debt crisis likely to dominate trading.

  • Human Genome Sciences Inc. (HGSI) and Glaxo said FDA has extended Benlysta PDUFA target date from Dec. 9 2010 to Mar. 10 and requested additional information
  • J.M. Smucker (SJM) may rise ~7% over next year as variety of food offerings, strong cash position offset rising coffee costs, Barron’s reported
  • Massey Energy (MEE) said President Baxter Phillips Jr. will succeed Don Blankenship as ceo after he retires on Dec. 31
  • Oshkosh (OSK) won $413.2m contract for 1,800 tactical vehicles for the Army National Guard, U.S. Defense Department said
  • Urban Outfitters (URBN) may not be a bargain vs peers, Barron’s reported in its “The Trader” column
  • Whirlpool (WHR) may rise to $100 or higher amid growing emerging market demand, Barron’s said

 PERFORMANCE

  • One day: Dow +0.17%, S&P +0.26%, Nasdaq +0.47%, Russell +0.69%
  • Last Week:  Dow +2.62%, S&P +2.97%, Nasdaq +2.24%, Russell +3.23%
  • Month-to-date: Dow +3.42%, S&P +3.74%, Nasdaq +3.73%, Russell +4.05%
  • Quarter-to-date: Dow +5.51%, S&P +7.32%, Nasdaq +9.41%, Russell +11.87%
  • Year-to-date: Dow +9.15%, S&P +9.83%, Nasdaq +14.2%, Russell +20.95%
  • Sector Performance (last week): Materials +6.14%, Energy +5.30%, Financials +5.27%, Industrials +4.10%, Consumer Discretionary +3.06%, Tech +2.29%, Healthcare +1.67%, Consumer Staples +1.09% and Utilities +1.34%,

 EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: 728 (-542)  
  • VOLUME: NYSE 906.80 (-18.71%)
  • VIX:  18.01 -7.12% YTD PERFORMANCE: -16.93%
  • SPX PUT/CALL RATIO: 1.31 from 1.58 -16.88%

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 17.36 0.203 (1.182%)
  • 3-MONTH T-BILL YIELD: 0.14% -0.02%  
  • YIELD CURVE: 2.54 from 2.44

COMMODITY/GROWTH EXPECTATION:

  • CRB: 316.16 +1.30% (+4.99% last week)
  • Oil: 89.19 +1.35% (+6.48% last week)
  • COPPER: 399.90 +0.50% (+6.29% last week)
  • GOLD: 1,406.28 +1.39% (+3.40% last week)

CURRENCIES:

  • EURO: 1.3414 +1.59%% (+1.30% last week)
  • DOLLAR: 79.377 -1.15% (-1.22% last week)

OVERSEAS MARKETS:

EUROPEAN MARKETS:

  • European markets have pared or reversed initial modest gains as the regions debt worries weighed ahead of the EuroZone Finance Ministers meeting later today.
  • Peripheral European indices led the fall, with Spain and Italy down over (1%) and debt spreads widened modestly after last week's enthusiasm over ECB bond buying waned.
  • Reports that JC Flowers had pulled away from a Spanish Bank investment also hit sentiment.
  • Declining sectors lead advancers 11-7 with banks and retailers leading the fallers.
  • Basic resources and chemicals lead gainers.
  • Major indices currently trade close to session lows.

ASIAN MARKTES:

  • Nikkei (0.11%); Hang Seng (0.36%); Shanghai Composite +0.52%
  • Most markets closed mixed.
  • China's shift in policy to "prudent" from "appropriately relaxed" is continuing to dictate trading patterns.
  •  Japan was mixed, opening by falling slightly on a stronger yen, but bargain-hunting quickly limited losses. Volume fell to the lowest since late Oct.
  • South Korea ended flat, with car-parts makers rising on the finalized trade agreement between the country and the US

Howard Penney

Managing Director

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