THE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP - December 15, 2010

As we look at today’s set up for the S&P 500, the range is 16 points or -0.93% downside to 1230 and 0.36% upside to 1246.  Equity futures are trading below fair value in the wake of yesterday's late session pull back which saw early gains on some strong data erased after Treasury yields rose again following comments from the Fed it would maintain its $600B asset purchase program.  News that Moody's put Spain's Aa1 rating on review for possible downgrade has knocked European and Asian markets. Japan's Tankan Large Manufacturer sentiment index reported its first decline since March 2009. Today's macro highlights include Nov CPI, Dec NY Empire Manufacturing Survey and Industrial production numbers

  • Boston Beer (SAM) raised 2010 EPS forecast to $3.30-$3.60 from $2.85-$3.15, vs adj. EPS est. $3.20
  • Broadcom (BRCM) sees 4Q net rev. ~$1.9b vs previous guidance $1.8b-$1.9b, est. $1.85b
  • Cubist Pharmaceuticals (CBST) cut 2010 rev. forecast to $634m-$640m from $645m-$650m, vs est. $625.3m
  • First Solar (FSLR) sees 2011 EPS $8.75-$9.50 vs est. $8.51
  • WD-40 Co. (WDFC) said it may buy back as much as $25m shares in the next year

PERFORMANCE

  • One day: Dow +0.42%, S&P +0.09%, Nasdaq +0.11%, Russell 2000 (0.06%)
  • Last Week:  Dow +0.25%, S&P +01.28%, Nasdaq +1.78%, Russell +2.70%
  • Month-to-date: Dow +4.28%, S&P +5.17%, Nasdaq +5.18%, Russell +6.14%;
  • Quarter-to-date: Dow +6.38%, S&P +8.80%, Nasdaq +10.94%, Russell +14.13%;
  • Year-to-date: Dow +10.05%, S&P +11.34%, Nasdaq +15.80%, Russell +23.39%
  • Sector Performance: Telecom +1.6%, Healthcare +1.1%, Industrials +0.5%, Consumer Spls +0.4%, Utilities +0.3%, Tech +0.1%, Materials +0.04%, Consumer Disc (0.01%), Energy (0.3%), Financials (0.9%)                

 EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: -368 (-131)  
  • VOLUME: NYSE 953.01 (-1.05%)
  • VIX:  17.61 +0.34% YTD PERFORMANCE: -18.77%
  • SPX PUT/CALL RATIO: 1.10 from 1.26 -12.40%  

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 16.70 -0.304 (-1.790%)
  • 3-MONTH T-BILL YIELD: 0.15% +0.02%  
  • YIELD CURVE: 2.83 from 2.68

COMMODITY/GROWTH EXPECTATION:

  • CRB: 319.51 -0.11%
  • Oil: 88.28 -0.37%
  • COPPER: 420.90 +0.05%
  • GOLD: 1,403.45 +0.64%

CURRENCIES:

  • EURO: 1.3412 +0.22%
  • DOLLAR: 79.367 +0.10%

OVERSEAS MARKETS:

EUROPEAN MARKETS:

  • European markets trade lower led by the periphery as European debt contagion fears returned after Moody's put Spain's Aa1 ratings on review for possible downgrade.
  • Portugal is due to hold a T-bill auction today.
  • Economic data also weighed following a cautious assessment of the US economy by the Fed yesterday, as Japan's manufacturers sentiment worsened, though less than expected, for the first time in two years and UK unemployment data disappointed.
  • The Swedish Central Bank raised its benchmark interest rate by 25bps to 1.25%.
  • Declining sectors lead advancers 14-4 with banks the worst performers down (2.2%).
  • UK Nov claimant count (1.2K) vs con (3K)
  • UK Oct ILO unemployment +7.9% vs con +7.7%
  • EuroZone Q3 employment due at 5ET
  • The pound and the euro are trading at $1.5695 and $1.3305 respectively
  • Pound was pressured as the number of people out of work rose for the first time in six months  

ASIAN MARKTES:

  • Asian markets were mixed today, though losing markets fell more than rising markets gained.
  • Australia gave up early gains to finish flat.
  • Exporters rose to help Japan finish flat despite a downbeat tankan.
  • China fell on profit-taking and lower commodity stocks.
  • Cathay Pacific dropped 7% to lead Hong Kong down on IATA’s saying airline profits may be hurt next year by slower economic growth and higher fuel costs.
  • Japan Q4 large manufacturer tankan +5 vs consensus +4 and prior +8. October tertiary industrial activity +0.5% m/m.

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