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TODAY’S S&P 500 SET-UP - December 30, 2010


Equity futures are trading little changed to fair value following Wednesday's low volume gains which saw the S&P add to its best December performance in nearly 20 years. Today's MACRO data points may provide some incremental direction.

OTHER DATA/NEWS EVENTS TODAY:

  • Initial jobless claims, Dec. 25, est. 415k
  • Net export sales (cotton, corn, soy meal, soybeans, soy oil, wheat), Dec. 23
  • Chicago purchasing manager, December - est. 61.0
  • Pending home sales MoM, November - est. 0.8%
  • EIA natural gas storage change (Dec. 24) est. -143
  • DOE inventories - December 24
  • Britain’s media regulator Ofcom will probably recommend tomorrow that News Corp’s bid to buy the remaining 61% of BSkyB be subject to further 6- mnth inquiry, Guardian reports
  • Sony files patent-infringement claims seeking to block LG Electronics from shipping mobile phones to U.S.
  • JPMorgan gets accused with others in lawsuit of getting $300m from a fraud run by Thomas J. Petters that involved buying Polaroid Holding 
  • Small wind developers and large solar projects including WIND, NEE and IBE SM, will benefit from extension of U.S. grant program for renewables, Bloomberg News
  • Pimco sees dollar keeping reserve status in 2011 as China, Europe aren’t developed enough for their currencies to replace it
  • East West Bancorp (EWBC) said it fully repaid $306.5m of preferred stock under TARP
  • Emcore (EMKR) delays 10-K filing as auditor reviews goodwill accounting
  • Lockheed Martin (LMT) won $492m contract for Littoral Combat Ships; contract could have cumulative value of $4b
  • Qwest Communications International (Q US) redeemed $1.1b 3.5% notes for total cash cost $1.7b

PERFORMANCE:

  • One day: Dow +0.09%, S&P +0.10%, Nasdaq +0.15%, Russell +0.10%
  • Last Week: Dow +0.72%, S&P +0.28%, Nasdaq +0.21%, Russell +0.34%
  • Month-to-date: Dow +5.26%, S&P +6.71%, Nasdaq +6.75%, Russell +8.70%
  • Quarter-to-date: Dow +7.39%, S&P +10.39%, Nasdaq +12.59%, Russell +16.88%
  • Year-to-date: Dow +11.10%, S&P +12.97%, Nasdaq +17.53%, Russell +26.36%
  • Sector Performance mixed (7 sectors up,2 down) - Energy +0.99%, Materials +0.42%, Consumer Discretionary +0.32%, Tech +0.20%, Industrials +0.09%, Healthcare +0.03%, Consumer Staples +0.03%, Financials (0.20%) and Utilities (0.35%)               

 EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: 747 (+872)  
  • VOLUME: NYSE 520.09 (-7.16%)
  • VIX:  17.28 -1.37% YTD PERFORMANCE: -20.30%
  • SPX PUT/CALL RATIO: 1.74 from 1.45 (+19.49%)  

CREDIT/ECONOMIC MARKET LOOK:

Treasuries rebounded from yesterday's sharp sell-off as today's 7-year auction showed solid demand. The auction was sufficient to spark a rally that gave the 10-year yield its largest decline (14 bp) since early June.

  • TED SPREAD: 18.21 -0.101 (-0.554%)
  • 3-MONTH T-BILL YIELD: 0.13% -0.02%  
  • YIELD CURVE: 2.71 from 2.65

COMMODITY/GROWTH EXPECTATION:

CRB: 330.71 -0.22%
 

Oil: 91.12 -0.40% -  Trading down 0.02% in the AM

Crude Oil Trades Near 26-Month High Amid Speculation U.S. Stockpiles Fell


COPPER: 431.15 -0.38% - Trading up +1.15% in the AM

Copper climbed to a record in London  after a report that China’s manufacturing is expanding

GOLD: 1,411.97 +0.60% - Trading up +0.01% in the AM

Gold May Climb as Weaker Dollar Spurs Investment Demand

OTHER COMMODITY NEWS:

  • Copper Rises to Record in London After Report on China's Factory Growth
  • Rubber Increases, Posting Second Annual Advance, on Supply Deficit Concern
  • Soybeans Advance, Reversing Losses, as Argentina Drought Concerns Persist
  • Shanghai Traders Pushing $1,600 Gold Thwart China Closing Silicosis Mines
  • Tata Steel, JSW May Increase Prices by 3% Next Quarter, Nirmal Bang Says
  • Mining IPOs May Reach Record Next Year as Investors Bet on Metal Demand
  • Queensland Floods May Cost Billions as Rain Ravage Australian Crops, Mines
  • Palm Oil Ends 2010 at Highest in 15 Years on Vegetable Oil Supply Outlook
  • Chilean Copper Venture Collahuasi Seeks Permits for Alternative Shipping
  • `More Stringent' Ownership, Governance Rules for Swaps Called for by U.S.
  • Malaysia's 2010 Glove Exports May Have Risen 23% to Record, Times Reports

CURRENCIES:

Another weak day for the greenback saw the dollar index fall by 0.71% - of note, the dollar has now declined in eight consecutive sessions against the yen to a seven-week low vs yen amid speculation China will allow yuan to appreciate at a faster pace.

  • EURO: 1.3189 +0.47% - Trading up +0.45% in the AM
  • DOLLAR: 79.796 -0.71% Trading down -0.16% in the AM (6 straight down days)

EUROPEAN MARKETS:

  • European Markets: FTSE 100: (0.07%); DAX: (0.97%); CAC 40: (0.70%) (as of 06:30 EST)
  • European markets opened little changed and is now down for the first time in three days on minimal regional news flow.
  • European retail sales increased at fastest pace in 2 1/2 years in Dec., Markit Economics says.
  • German government bonds found support after a successful US Treasury 7-year auction yesterday.
  • Italian bonds were pressured ahead of today's long dated bond auctions.
  • For half of Europe this is the final day of trading for the year with markets including Germany, Italy, Switzerland, Spain and all of Scandinavia closed tomorrow.
  • All but one sector, autos +0.1%, trade lower led by telecom (0.8%) and oil & gas (0.6%).
  • There are no major economic releases scheduled

ASIAN MARKTES:

  • Asian Markets: Nikkei (1.12%); Hang Seng +0.13%; Shanghai Composite +0.29%
  • Today was the year’s last trading day in Japan, Indonesia, Malaysia, the Philippines, South Korea and Thailand.
  • Markets close early tomorrow in Hong Kong, Australia and Singapore.
  • Most Asian markets rose slightly today.
  • Taiwan was up 0.47%. Post-close, citing a source, Reuters reported that Taiwan will raise interest rates by 12.5 bp today, which would match expectations.
  • On bargain-hunting, banking stocks rose to lift China +0.29%. But property developers and carmakers continued their recent descents on policy concerns. Jiangxi Copper gained 4% on record copper prices.
  • Miners led Australia to a small gain +0.32%. Coal and Allied fell 1% on Rio Tinto’s announcement of force majeure yesterday, but Cockatoo Coal rose despite saying a mine has been flooded, and Wesfarmers remained flat despite saying floods have caused it to suspend operations at Curragh North.
  • Hong Kong was flat. Carmakers continued higher, ignoring China’s announcement that it will end tax incentives for small cars January 1st.
  • Exporters fell on a stronger yen, taking Japan to a 1.12% loss. Megabanks followed their US peers lower. Breadth was strongly negative as all 33 sectors on the TSE declined.
  • China November purchasing manufacturers’ index 54.4 vs prior 55.3.