TODAY’S S&P 500 SET-UP - January 4, 2011
As we look at today’s set up for the S&P 500, the range is 14 points or -1.01% downside to 1259 and 0.09% upside to 1273. Economic data from around the world was bullish for equity markets as more evidence of continued improvements in the economy was seen. Equity futures are trading relatively in-line with fair value, despite gains in European and Asia.
MACRO DATA POINTS:
- 7.45am, ICSC weekly retail sales
- 10am, Factory Orders, Nov., est. -0.1%, prev. -0.9%
- 11am, U.S. Fed to purchase $1-$2b TIPS
- 11.30am, U.S. to sell 4-week bills
- 2pm, Minutes of FOMC Meeting
- 4.30pm, API Inventories
- 5pm, ABC Consumer Confidence, Jan. 2, prev. -44
TODAY’S WHAT TO WATCH:
- Motorola Mobility is spun off today, trades under MMI on NYSE
- President Obama will sign $1.4b food-safety bill today that marks the biggest change to oversight of the food industry since 1938 and sets up a funding fight with Republicans poised to take over the House.
- Google is considering building a payment and advertising service that would let users buy milk and bread by tapping or waving their mobile phone against a register at checkout, two people familiar with the plans say. Service may debut this year
- Airgas (ARG) bought Conley Gas and separately two other businesses
- Annaly Capital Management (NLY) plans an offering of 75m shrs
- Belo (BLC) completes split of G.B. Dealey Retirement Pension Plan with A.H. Belo Corp; sees loss $19m-$23m on split, $5m-$7m tax benefit
- Constellation Energy (CEG) completed acquisition of Boston Generating power plants for $1.1b
- Corning (GLW) said Peter Volanakis retired as COO, President
- Dick’s Sporting Goods (DKS) rated new buy at Janney
PERFORMANCE: ALL 9 SECTORS BULLISH ON TRADE & TREND
- One day: Dow +0.81%, S&P +1.13%, Nasdaq +1.46%, Russell +1.90%
- Last Week: Dow +0.03%, S&P +0.07%, Nasdaq (-0.48%), Russell (-0.67%)
- Month/Quarter/Year-to-date: Dow +0.81%, S&P +1.13%, Nasdaq +1.46%, Russell +1.90%
- Sector Performance - BULLISH (All sectors were positive) - Financials +2.19%, Consumer Discretionary +1.18%, Tech +1.11%, Healthcare +0.91%, Materials +0.81%, Industrials +0.72%, Energy +0.72%, Utilities +0.49%, and Consumer Staples +0.14%
EQUITY SENTIMENT: BULLISH
- ADVANCE/DECLINE LINE: 1469 (+1220)
- VOLUME: NYSE 1060.24 (+78.96%)
- VIX: 17.61 -0.79% YTD PERFORMANCE: -0.79%
- SPX PUT/CALL RATIO: 1.41 from 1.97 (-28.68%)
CREDIT/ECONOMIC MARKET LOOK: BULLISH
Treasuries were weaker with the curve steepening slightly
- TED SPREAD: 16.89 -1.624 (-8.865%)
- 3-MONTH T-BILL YIELD: 0.15%
- YIELD CURVE: 2.75 from 2.72
COMMODITY/GROWTH EXPECTATION: BULLISH
- CRB: 333.02 +0.07%
- Oil: 91.55 +0.19% - trading +0.12% in the AM
- Oil Trades Near 27-Month High as Economic Recovery May Boost Energy Demand
- COPPER: 445.75 +0.24% - trading -0.55% in the AM
- Copper Rises to Record for Fourth Day in London on U.S. Growth Speculation
- GOLD: 1,420.05 +0.09% - trading -0.89% in the AM
- Wien Forecasts Gold Above $1,600, Grains Surge in `Ten Surprises' for 2011 - He went 0 for 10 last year!
OTHER COMMODITY NEWS:
- Hedge Funds Increase Bullish Crude Bets to Four-Year High: Energy Markets
- Flooding May Threaten More Cotton Crops in Queensland, Growers Group Says
- Rubber Futures Advance to Record as U.S. Production Raises Demand Outlook
- Gold Falls for Second Day as Reports May Show Recovering Economic Growth
- Soybeans Advance on Concern Dry Weather in South America May Cut Supplies
- Sugar Output in India's Top Producing State May Miss Forecast After Rains
- Molycorp May Double Planned Rare-Earth Metals Output to Meet Global Demand
- Vietnam Aims to Ship `About' 6 Million Tons of Rice, Deputy Minister Says
- Australia Forecasts More Rain as Floods Isolate Thousands, Shut Down Mines
- Alcoa Recommended as `Top Stock' by CNBC's Cramer; Shares May Gain to $22
- Noble Stock Advances to Record as Acquisitions to Drive Growth in Earnings
- EURO: 1.3375 -0.07% - trading +0.20% in the AM
- DOLLAR: 79.127 +0.13% - trading -0.07% in the AM
- European Markets: FTSE 100: +2.12%; DAX +0.17%; CAC 40: +0.62%
- Most European indices started the day slightly lower and are now trading in positive territory while the Footsie is up 2.12%, catching up with the rest of Europe following yesterday's strong session.
- Notable divergence is Greece down 1.52%, Estonia up 2.90%
- Energy shares are among today's best performers, helped by BP after the Daily mail reported Royal Dutch Shell thought about bidding for the company during oil-spill crisis.
- France Dec Consumer Confidence (36) vs consensus (31) and prior revised to (33) from (32)
- German Dec unemployment change, seasonally adjusted, +3K vs consensus (10K) and prior revised (8K)
- UK Dec Manufacturing PMI 58.3 vs consensus 57 and prior 58
- UK Nov mortgage approvals 48,019 vs consensus 47,000 and Oct 47,315
- Asian Markets: Nikkei +1.7%; Hang Seng +1.0%; Shanghai Composite +1.6%
- Most Asian markets rose today, except India -0.30% and Taiwan -0.31%
- For several markets, this was the first trading day of the year.
- Japan rose +1.65%, reflecting buoyant investor sentiment on gains throughout the world, with 32 of 33 sectors going up. Resource related stocks gained 3-5%. Exporters rose on strong ISM manufacturing data from the US. Megabanks followed their US peers up 2%, and consumer lenders Promise and Aiful soared 17% and 11%, respectively.
- Property counters surged to lead China higher by 1.59%, with materials stocks providing strong support. China Shenhua Energy and Yanzhou Coal Mining rose 2% and 3%, respectively, on coal supply concerns arising from the flooding in Australia. Shippers rose 4% on optimism that export demand would be lifted.
- South Korea found strength +0.73% from brokerages and shipbuilding stocks.
- Property stocks led gains in Hong Kong +0.99% - Cathay Pacific rose 3% when its COO said the airline is reasonably confident about the year.
- The floods in Queensland held Australia flat, as early gains were pared by falls for insurance companies. Insurance Australia Group, QBE Insurance, and Suncorp fell 2-3%.
- The yen is trading at 82.07 to the US dollar