TODAY’S S&P 500 SET-UP - December 20, 2010
As we look at today’s set up for the S&P 500, the range is 13 points or -0.64% downside to 1236 and 0.41% upside to 1249. Equity futures are trading mixed to fair value as investors keep an eye on events on the Korean peninsula where tensions threaten to escalate after South Korea went ahead with its drill with live ammunition. Treasuries and the dollar are benefiting as investors apply safe haven trades. European markets are frozen amid some pretty awful weather which has shut much of the continent's transport systems, with the UK particularly badly hit. Elsewhere, news flow is thin in what looks like being a quiet run in to the festive break assuming the situation in Korea does not escalate beyond current tensions
- Constellation Energy Group (CEG) said COO Michael J. Wallace plans to retire in April
- Illinois Tool Works (ITW) may rise as it introduces new products and expands into Asia Barron’s said, citing analysts
- Invesco (IVZ) may rise as much as 20% as one of the “best value” asset managers, Barron’s reported, citing analysts
- SLM (SLM) may rise to the “high teens” during next 18 months and could attract a buyer, Barron’s says, without attribution
- Sunstone Hotel Investors (SHO) said Arthur Buser has resigned as president and CEO
- One day: Dow (0.06%), S&P +0.08%, Nasdaq +0.21%, Russell +0.38%
- Last Week: Dow +0.72%, S&P +0.28%, Nasdaq +0.21%, Russell +0.34%
- Month-to-date: Dow +4.41%, S&P +5.37%, Nasdaq +5.79%, Russell +7.22%
- Quarter-to-date: Dow +6.52%, S&P +9.00%, Nasdaq +11.58%, Russell +15.29%
- Year-to-date: Dow +10.20%, S&P +11.55%, Nasdaq +16.47%, Russell +24.65%
- ADVANCE/DECLINE LINE: 346 (-726)
- VOLUME: NYSE 2018.78 (+103.95%)
- VIX: 16.1 -7.36% YTD PERFORMANCE: -25.69%
- SPX PUT/CALL RATIO: 2.45 from 1.10 +123.09%
CREDIT/ECONOMIC MARKET LOOK:
- TED SPREAD: 20.64 0.406 (2.005%)
- 3-MONTH T-BILL YIELD: 0.13% -0.01%
- YIELD CURVE: 2.81 from 2.85
- CRB: 320.62 +1.03% (up 1.81% last week)
- Oil: 88.02 +0.36% (up 0.26% last week)
- COPPER: 415.90 +1.04% (up 1.14% last week, up three weeks in a row)
- GOLD: 1,371.70 -0.02% (down 0.96% last week)
- EURO: 1.3188 -0.34% (down -0.29% last week)
- DOLLAR: 80.373 +0.24% (up +0.38% last week)
- European markets trade higher in thin trading with gains capped by worries over the EuroZones debt crisis and increased tension in the Korean peninsula as South Korea held a live fire drill.
- There was little significant economic news, M&A remained a focus.
- Greece a big mover to the downside -2.69%
- Autos and basic resources lead advancing sectors, with retail and travel & leisure the leading decliners as pre-Christmas snow and ice disruption across Europe weighed.
- Advancing sectors lead decliners 14-4.
- Germany Nov PPI +4.4% y/y vs consensus +4.5% and prior +4.3%
- CBI sees UK 2011 GDP +2.0%, 2012 +2.4%, expects slow start to 2011, cuts is Q1 q/q growth to +0.2%, says risk of double dip recession remains low. Expects 2011 inflation to be higher than prior forecast and the BOE will start to normalize monetary policy in the spring with interest rates gently rising through mid 2012
- Asian markets were lower today on concerns about European debt sparked by Ireland’s rating’s being cut by Moody’s, and South Korea’s decision to go ahead with an artillery drill.
- Hong Kong slipped -0.56%, weighed on by China’s performance down 1.41%.
- Unsurprisingly, South Korea fell -0.30%on worries about exacerbated geopolitical tensions, but defense-related shares Victek and Speco climbed 2% and 8%, respectively.
- Australia gave up early gains down -0.56%. Perpetual tumbled 15% when KKR terminated takeover talks.
- Japan fell -0.85% with some high-priced issues dumped in profit-taking, while small- and mid-caps were bought. Toyota fell 1% after the Japan Automobile Manufacturers Association predicted lower demand in Japan for 2011, but Honda rose 1% after saying it is targeting sales growth of 12% y/y in China for 2011. Canon Electronics rose 3% on raising its FY outlook.
- China fell on concerns that access to funds may shortly get more difficult, though it recovered half its losses from its intraday low.
- Japan revised October composite index of economic indicators (1.3 points) m/m vs preliminary (1.4 points) m/m. November convenience store sales +1.1% y/y vs prior (5.9%). November department-store sales (0.5%) y/y. Tokyo November department-store sales +0.3% y/y.