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TODAY’S S&P 500 SET-UP - December 14, 2010

As we look at today’s set up for the S&P 500, the range is 20 points or -1.17% downside to 1226 and 0.45% upside to 1246.  Equity futures are trading modestly above fair value in the wake of Monday's late session retreat which left the S&P flat on the day. Today's FOMC meeting is unlikely to provide any fireworks, but Fed Chairman Bernanke's comments will as ever, be monitored for any changes in policy tone.   Before the open PPI and Retail Sales for Nov will be the main focus.

  • Advent Software (ADVS) approved 2-for-1 stock split
  • Amgen (AMGN) said top-line results from Xgeva trial showed significantly improved survival in some prostate-cancer patients
  • Baxter International (BAX) approved $2.5b share-repurchase plan
  • Genoptix (GXDX) has put itself up for sale and hired Barclays to run an auction, people with knowledge of matter say
  • Genzyme (GENZ) said it will hold an investor event to discuss the commercial potential of Alemtuzumab on Dec. 20
  • Hexcel (HXL) sees 2011 adj. EPS 90c-98c vs est. 98c
  • InterDigital (IDCC) approved 10-c quarterly dividend
  • Pfizer (PFE) boosted Q dividend to 20c-shr, vs BDVD est. 21c-shr; also elected George Lorch as a non-executive chairman
  • Williams Partners (WPZ) announced plan for 7.5m unit secondary offering

PERFORMANCE

  • One day: Dow +0.16%, S&P +0.00%, Nasdaq (0.48%), Russell (0.61%)
  • Last Week:  Dow +0.25%, S&P +01.28%, Nasdaq +1.78%, Russell +2.70%
  • Month-to-date: Dow +3.84%, S&P +5.07%, Nasdaq +5.07%, Russell +6.2%
  • Quarter-to-date: Dow +5.94%, S&P +8.7%, Nasdaq +10.82%, Russell +14.19%
  • Year-to-date: Dow +9.59%, S&P +11.24%, Nasdaq +15.68%, Russell +23.46%
  • Sector Performance: Energy +0.79%, Materials +0.52%, Utilities +0.46%, Healthcare +0.07%, Telecom +0.07%, Consumer Staples +0.05%, Industrials +0.01%, Financials (0.12%), Tech (0.32%), and Consumer Discretionary (0.54%)

 EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: -237 (-1064)  
  • VOLUME: NYSE 963.12 (-1.17%)
  • VIX:  17.55 -0.34% YTD PERFORMANCE: -19.05%
  • SPX PUT/CALL RATIO: 1.26 from 1.48 -15.04%  

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 17.07 -1.116 (-6.137%)
  • 3-MONTH T-BILL YIELD: 0.15% +0.02%  
  • YIELD CURVE: 2.68 from 2.68

COMMODITY/GROWTH EXPECTATION:

  • CRB: 319.87 +1.58%
  • Oil: 88.61 +0.93%
  • COPPER: 420.70 +2.31%
  • GOLD: 1,405.88 +0.69%

CURRENCIES:

  • EURO: 1.3382 +1.18%
  • DOLLAR: 79.284 -0.98%

OVERSEAS MARKETS:

EUROPEAN MARKETS:

  • European markets trade mixed to lower as market participants await the latest data points to gauge the economic outlook and ahead of the FOMC meeting later today. Major indices initially fluctuated either side of unchanged
  • Disappointing UK inflation report and significantly higher yields on the Spanish debt auction saw indices drift towards session lows.
  • Declining sectors lead advancers 10-8, with banks leading fallers (1.2%), while healthcare led gainers +0.6%.
  • France Nov EU Harmonised CPI +1.8% y/y vs con +1.8%
  • UK Nov CPI +3.3% y/y vs con +3.2%
  • UK Nov RPI +4.7% y/y vs con +4.4%
  • Eurozone Oct Industrial Production +6.9% y/y vs consensus +7.6% and prior revised +5.4% from +5.2%.  Eurozone Oct Industrial Production +0.7% m/m vs consensus +1.3% and prior revised (0.7%) from (0.9%) 
  • IFO raises German 2011 growth forecast to +2.4% from +1.5%
  • Swiss government raises 2011 GDP forecast to +1.5% vs prior +1.2%, 2010 est GDP +2.7%, guides 2012 GDP +1.9%

ASIAN MARKTES:

  • Most Asian markets went up this morning, though they traded in a tight range.
  • On hopes for higher demand in the holiday season, high tech stocks drove South Korea to close above 2000 for the first time in three years.
  • Mild profit-taking held Japan to a very slight gain, though breadth was strongly positive. The market got a boost when Prime Minister Naoto Kan told ministers to cut the country’s corporate tax rate by 5 percentage points starting next FY, though passage of the bill is not guaranteed.
  • On higher commodity prices, energy shares rose in very light trading in Hong Kong.
  • Australia edged up, though banks fell 1% on profit-taking.  AGL Energy lost 5% after announcing it did not acquire any electricity assets that New South Wales is privatizing.
  • Profit-taking in energy companies kept China flat. Computer software providers gained on government support for the industry. Banks fell on reports that the central bank has extended a temporary 50-bp increase in the reserve-requirement by three months for some banks.
  • Japan October industrial output revised to (2.0%) m/m vs preliminary (1.8%).

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