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.
