TODAY’S S&P 500 SET-UP - January 11, 2011
Equity futures are trading above fair value having extended early gains in response to a rebound on European markets after the WSJ reported Japan will join China in providing assistance to the Eurozone by buying EFSF bonds.
After the close Alcoa (AA) reported $0.21 vs. Reuters $0.19, though sales of $5.65B missed forecasts.
MACRO DATA POINTS:
- 7:30 a.m.: NFIB small business optimism, December., est. 94.5
- 8:30 a.m.: Fed’s Charles Plosser speaks on economic outlook in Philadelphia
- 10 a.m.: Wholesale inventories, November. est. 1%
- 11:30 a.m.: U.S. sells $22b 52-week bills; 1 p.m. sells $32b 3-yr notes
- 12 p.m.: DOE outlook (crude, mogas, diesel, natgas), Jan.
- 2 p.m.: Fed’s Narayana Kocherlakota speaks in Wisconsin
- 4:30 p.m.: API inventories, January. 7
- 5 p.m.: ABC consumer confidence, January. 9
TODAY’S WHAT TO WATCH:
- Verizon Wireless will introduce its iPhone at an event in New York today
- Presidential spill commission scheduled to release its final report at 10 am DC time
- Facebook will ask a court today to enforce a settlement which resolved claims that its founder Mark Zuckerberg stole the idea for the social-networking company from classmates at Harvard University
- Autonation December 2010 Retail New Vehicle Unit Sales Up 12%
- Tiffany Sees Year Adj EPS $2.83-$2.88, Saw $2.72-$2.77,Est $2.77
- Advanced Micro Devices (AMD) said Dirk Meyer resigned
- Alcoa (AA) posted 4Q sales that trailed est.
- Apollo Group (APOL) posted 1Q EPS that exceded est.
- J.C. Penney (JCP) names Michael Dastugue as CFO, replacing Robert Cavanaugh
- Nvidia (NVDA) made licensing pact with Intel
- Spectrum Control (SPEC) missed 4Q forecast
- Stryker (SYK) 2010 prelim. adj. EPS toped ests.
- WD-40 (WDFC) 1Q adj EPS, rev. below ests.; reiterated FY11 forecast
PERFORMANCE: Consumer Staples is BROKEN on TRADE
- One day: Dow (0.32%), S&P (0.14%), Nasdaq +0.17%, Russell +0.48%
- Last Week: Dow +0.84%, S&P +1.10%, Nasdaq 1.90%, Russell +0.53%
- Month-to-date: Dow +0.52%, S&P +0.96%, Nasdaq +2.07%, Russell +1.01%
- Sector Performance - (only 4 sectors positive) - Tech +0.14%, Industrials +0.14%, Materials +0.12%, Consumer Staples +0.02%, Consumer Discretionary (0.08%), Financials (0.25%), Healthcare (0.23%), Energy (0.41%), Utilities (0.55%)
EQUITY SENTIMENT:
- ADVANCE/DECLINE LINE: 76 (+444)
- VOLUME: NYSE 955.35 (-12.31%)
- VIX: 17.54 +2.33% YTD PERFORMANCE: -1.18%
- SPX PUT/CALL RATIO: 1.59 from 1.79 (-11.15%)
CREDIT/ECONOMIC MARKET LOOK:
Treasuries were stronger; curve was flattish
- TED SPREAD: 115.81 -1.015 (-6.032%)
- 3-MONTH T-BILL YIELD: 0.15% +0.01%
- YIELD CURVE: 2.73 from 2.74
COMMODITY/GROWTH EXPECTATION:
- CRB: 326.85 +0.90%
- Oil: 89.25 +1.39% - trading +0.35% in the AM
- Oil rose for a second day, as investors’ demand for riskier assets gained with advancing equity markets.
- COPPER: 426.45 -0.42% - trading +1.61% in the AM
- Copper Gains for First Day in three as Japan Plans to Buy Euro-Region Bonds
- GOLD: 1,371.43 +0.26% - trading +0.93% in the AM
- Russia may add to gold reserves
OTHER COMMODITY NEWS:
- Gold Must Exceed $2,000 to Be Considered in a Bubble, Deutsche Bank Says
- Sugar Rises for Third Day on Report Algeria Waived Duty; Coffee Advances
- Alcoa Sees `Headwinds' in Growth in China Aluminum Use as Car Demand Slows
- Rain in Victoria, New South Wales This Week Threatens Wheat Crop, ANZ Says
- Australian Floods Push Coal Price to Two-Year High; Cotton, Sugar Crop Cut
- Alaska Pipe Closure May Draw Oman, Russia Oil to U.S. West Coast Refiners
- Asia Exports Cooling Damps Outlook for Commodity Shippers: Freight Markets
- Australian Cotton Shippers Say Loss Estimate May Climb if Rain Continues
- China's First Overseas Gold Fund Raises $483 Million, Lion Management Says
- Corn Rises for Second Day as Dry Weather Hurts Argentine Crop; Wheat Gains
- India Won't Import Sugar After Scrapping Tax Amid High Prices, Sucden Says
- Rubber Advances to Record as 33% Jump in China Car Sales May Boost Demand
CURRENCIES:
- EURO: 1.2941 +0.26% - trading +0.21 in the AM
- DOLLAR: 80.881 -0.16%% - trading -0.01% in the AM
EUROPEAN MARKETS:
- European Markets: FTSE 100: +1.31%; DAX: +0.82%; CAC 40: +1.16%
- European markets trade higher as reports that Japan will buy Eurozone debt to be issued this month improved sentiment toward peripheral Europe.
- Portugal is trading up +2.06% after the Finance Minister says country does not need a bailout and its Prime Minister has scheduled a news conference as investors await news ahead of a bond auction tomorrow.
- Eastern Europe trading higher except Slovakia and Estonia
ASIAN MARKTES:
- Asian Markets: Nikkei (0.3%); Hang Seng +1.0%; Shanghai Composite +0.4%
- Asian markets were mixed today, with caution reigning ahead of government bond auctions in Europe. Taiwan, China and South Korea were up on the day.
- Hong Kong reversed two days of declines closing up 0.99%.
- China rose 0.44% after falling in the morning on a report that banks plan to cut lending by 10% this year, anticipating reduced credit from the central bank. Property stocks ended higher despite a report that Shanghai is likely to impose a property tax on second home buyers during Q1.
- South Korea managed a small rise of 0.36% despite caution ahead of a central bank policy rate decision 13-Jan. Samsung Engineering rose 4% on saying it had won a $410M order to build a chlorine production plant in the US. LG Electronics edged down on a report that it will build a white goods factory in Brazil to come online next year.
- Australia bounced off of lows to finish flat, with a move to defensive stocks like Telstra and Woolworths helping the climb back. Australian insurers fall on speculation claims will increase as Queensland floods worsen.
- Japan fell slightly -0.29% - exporters fell on a stronger yen.
- Japan November composite index of coincident economic indicators +1.4 points m/m. November index of leading economic indicators +3.3 points m/m.
- China 2010 new bank lending CNY7.95T vs target CNY7.50T.
- China 2010 M2 +19.7% vs target +17%.
