• It's Here!

    Etf Pro

    Get the big financial market moves right, bullish or bearish with Hedgeye’s ETF Pro.

TODAY’S S&P 500 SET-UP - December 13, 2010

As we look at today’s set up for the S&P 500, the range is 33 points or -1.64% downside to 1220 and 1.02% upside to 1253.  Equity futures are trading above fair value following a strong start to the week across Asian and Europe where China's decision to not to raise its benchmark interest rate has prompted further risk appetite.  On the data front this week, the passage of the newly-proposed fiscal stimulus package through both Houses of Congress will be the main focus today. For the rest of the week, data highlights include tomorrow's FOMC rate decision plus November Retail Sales, November CPI and Empire Manufacturing on Wednesday.  In addition, weekly Jobless claims plus the Philly Fed Index on Thursday.

  • Airgas (ARG) told court its directors disagreed over minimum price they would accept for co. from Air Products & Chemicals in takeover; earlier stated they were unanimous
  • American Superconductor (AMSC) may be overvalued as wind- turbine inventories at customer Sinovel increase, Barron’s says
  • Colonial Properties Trust (CLP) said it may sell shares equivalent to as much as $100m
  • EXCO Resources (XCO): Wilbur Ross has bought 7.5% in XCO and wants to discuss “extraordinary corporate transactions,” such as a merger or asset sales, according to SEC filing
  • GFI Group (GFIG) said it will pay a special 25c-shr dividend
  • Horace Mann Educators (HMN) boosted quarterly dividend to 11c-shr, vs Bloomberg forecast 10c
  • Mattel (MAT) may rise 20% or more in next year on demand for American Girl dolls, Monster High dolls, Barron’s says
  • Plains All American Pipeline (PAA) and Western Gas Partners (WES) may rise as their fee-based business expands, Barron’s said, citing UBS analyst Jeremy Tonet
  • W&T Offshore (WTI) said it will pay special dividend of 66 cents per share

PERFORMANCE

  • One day: Dow +0.35%, S&P +0.60%, Nasdaq +0.80%, Russell +1.20%
  • Last Week:  Dow +0.25%, S&P +01.28%, Nasdaq +1.78%, Russell +2.70%
  • Month-to-date: Dow +3.67%, S&P +5.07%, Nasdaq +5.58%, Russell +6.85%
  • Quarter-to-date: Dow +5.77%, S&P +8.69%, Nasdaq +11.35%, Russell +14.89%
  • Year-to-date: Dow +9.42%, S&P +11.24%, Nasdaq +16.23%, Russell +24.22%
  • Sector Performance (last week): Financials +3.78%, Tech +1.53%, Consumer Staples +1.15%, Industrials +1.04%, Materials +0.65%,  Healthcare +0.64%, Consumer Discretionary +0.37%, Energy +0.12% and Utilities (-0.50%)

 EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: 827 (+473)  
  • VOLUME: NYSE 974.51 (-2.96%)
  • VIX:  17.61 +2.09% YTD PERFORMANCE: -18.77%
  • SPX PUT/CALL RATIO: 1.48 from 1.33 +11.66%

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 17.68 -0.811 (-4.388%)
  • 3-MONTH T-BILL YIELD: 0.13% -0.01%  
  • YIELD CURVE: 2.68 from 2.59

COMMODITY/GROWTH EXPECTATION:

  • CRB: 314.91 -0.37% (-0.49% last week)
  • Oil: 87.79 -0.66% (-1.57% last week)
  • COPPER: 411.20 +0.61% (+2.83% last week)
  • GOLD: 1,384.95 -0.31%% (-1.53% last week)

CURRENCIES:

  • EURO: 1.3226 +0.03% (-1.40% last week)
  • DOLLAR: 80.070 flat (+0.87% last week)

OVERSEAS MARKETS:

EUROPEAN MARKETS:

  • European markets opened up and extended gains with mining shares the leading advancers up +2.1% after Chinese industrial output data beat expectations buoying confidence about the economic outlook.
  • Investors took comfort that China did not raise its interest rates over the weekend, though they did raise bank reserve requirements on Friday, and shrugged off China's inflation rate rising to its highest level in over 2 years.
  • Continuing M&A activity also helped sentiment.
  • In a broad advance all but one sector, healthcare (0.1%) trade higher. Peripheral European debt spreads and the euro were pressured ahead of the EU Leaders Summit on 16-17 Dec. Major indices trade slightly off session highs.
  • UK PPI input +9.0% y/y vs consensus +8.5% and prior downwardly revised +8.2%
  • UK Rightmove Dec house prices (3.0%) m/m, up +0.4% y/y; predicts 2011 house prices flat to down (5%)

ASIAN MARKTES:

  • Most Asian markets went up today as the region reacted well to China's raising banks' reserve requirements rather than interest rates.
  • Railway stocks continued up in China on government plans to develop a high-speed rail network.  Energy stocks outperformed on economic data suggesting the global economy is recovering.
  • Japan finished higher, with a weaker yen supporting the market. The market opened flat, but took heart on China’s rise.
  • Energy stocks gained on higher oil prices, and property stocks advanced on reports that secondary home sales have picked up, moving Hong Kong higher in light trade.
  • Australia rose, with miners gaining on the belief that China’s raising its reserve requirements for banks was not as harsh a tightening measure as the country might have chosen. The country’s big banks went up on relief that banking system reform measures announced yesterday were not as radical as feared.

Howard Penney

Managing Director

THE DAILY OUTLOOK - S P 1213