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TODAY’S S&P 500 SET-UP - January 12, 2011

As we look at today’s set up for the S&P 500, the range is 25 points or -0.39% downside to 1269 and +0.62% upside to 1282.  Equity futures are trading above fair value in a continuation of Tuesday's modest gains with early focus centered on Portugal's bond auction.  In focus today, Treasury Secretary Geithner will speak about China ahead of President Hu's visit to the US.

MACRO DATA POINTS:

  • 8:30 a.m.: Treasury’s Geithner speaks on China
  • 8:30 a.m.: Import price index
  • 8:30 a.m.: WASDE grains, commodities
  • 8:30 a.m.: USDA quarterly grains
  • 10:30 a.m.: DoE inventories
  • 1 p.m.: Fed’s Richard Fisher speaks on monetary policy in New York
  • 1 p.m.: U.S. sells $21b 10-yr notes reopening
  • 2 p.m.: Fed releases beige book economic survey
  • 2 p.m: Monthly Budget Statement
  • USDA broiler eggs set, Jan. 12

TODAY’S WHAT TO WATCH:

  • Big 5 Sporting Goods (BGFV) prelim 4Q adj. EPS, rev. miss ests.
  • Evergreen Solar (ESLRD) sees $340m charge to close Devens mfg plant, affecting 800 workers
  • Lululemon Athletica (LULU) sees 4Q rev. $237m-$239m, up from $210m-$215m forecast in Dec. vs est. $221.6m
  • Synnex (SNX) high end of 1Q adj. EPS forecast above est.
  • Zale (ZLC) same-store holiday sales rose 8.5%  

PERFORMANCE:

  • One day: Dow +0.30%, S&P +0.37%, Nasdaq +0.33%, Russell 2000 +0.40%
  • Last Week: Dow +0.84%, S&P +1.10%, Nasdaq 1.90%, Russell +0.53%
  • Month-to-date: Dow +0.82%, S&P +1.34%, Nasdaq +2.41%, Russell +1.42%
  • Sector Performance - (6 sectors positive) - Energy +1.66%, Materials +0.81%, Healthcare +0.50%, Financials +0.40%, Industrials +0.37%, Utilities +0.14%, Consumer Disc (0.03%), Consumer Spls (0.08%), Tech (0.16%)  

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: 552 (+476)  
  • VOLUME: NYSE 943.92 (-1.20%)
  • VIX:  16.89 +3.71% YTD PERFORMANCE: -4.8%
  • SPX PUT/CALL RATIO: 1.90 from 1.59 (+19.55%)  

CREDIT/ECONOMIC MARKET LOOK:

Treasuries snapped a three-day winning streak with the modest bounce in stocks and supply impact.

  • TED SPREAD: 16.22 +0.406 (2.568%)
  • 3-MONTH T-BILL YIELD: 0.15%    
  • YIELD CURVE: 2.77 from 2.73

COMMODITY/GROWTH EXPECTATION:  

  • CRB: 331.46 +1.41%
  • Oil: 91.11 +2.08% - trading -0.19% in the AM
  • Oil Trades Near One-Week High as Alaska Pipeline Outage May Last Five Days
  • COPPER: 434.90 +1.98% - trading +0.67% in the AM
  • Copper Rises for a Second Day on Efforts to Contain European Debt Crisis
  • GOLD: 1,382.25 +0.79% - trading +0.02% in the AM
  • Gold Imports by India Surge to Record as Price Is `Not a Factor,' WGC Says

OTHER COMMODITY NEWS:

  • Soybeans Gain Before USDA Report Forecast to Show Lower Stocks; Corn Rises
  • Coffee Climbs for Third Day as Indonesia, Vietnam Rains May Tighten Supply
  • Gold May Rise as European Sovereign-Debt Crisis Spurs Demand for a Haven
  • Latex to Plummet as Weather Improves, World's Biggest Glove Maker Predicts
  • German Tainted-Food Scandal Widens as China Halts Imports of Pork Products
  • Incitec Moranbah Plant May Be Delayed by Queensland Floods, Citigroup Says
  • Rice Growers in the U.S. May Switch Some Area to Soybeans, Federation Says
  • Cotton Advances to Three-Week High as Deadly Floods Damage Australian Crop
  • China Freeze Hurts Sugar Cane, May Cut Production in Guangxi, Top Grower
  • Aluminum Stockpiles in Japan Advance 6.5%, First Increase in Four Months
  • Grain Exports From Brisbane Are Halted After Port Closes, GrainCorp Says

CURRENCIES:

  • EURO: 1.2969 +0.22% - trading +0.02% in the AM
  • DOLLAR: 80.846 -0.04%% - trading -0.10% in the AM

EUROPEAN MARKETS:

  • European Markets: FTSE 100: +0.59%; DAX: +1.46%; CAC 40: +1.59%
  • European markets opened higher and have modestly extended gains after the Portuguese debt auction.
  • Peripheral equity markets led the regions advance, Greece up +3.86%, Spain +3.84 and Italy up 2.72% - Portugal is up +0.98%
  • Peripheral debt spreads have stabilized.
  • All 18 sectors trade higher led by banks +4.9% and basic resources +2.3%, whilst personal & household product and autos +0.2% lead laggards.
  • Germany 2010 GDP +3.6% vs consensus +3.6% and prior (4.7%)

ASIAN MARKTES:

  • Asian Markets: Nikkei +0.02%; Hang Seng +1.54%; Shanghai Composite +0.62%
  • Asian markets rose today as concerns ease about European debt and a buoyant US market.
  • Local property stocks and Chinese resource issues led Hong Kong’s rise.  Alibaba.com rose 4% on speculation that its parent and Baidu will invest $100M in Sina’s microblog product.
  • China rose, with property shares going up on news that pending proposed property taxes will not apply to all transactions.
  • Taiwan went up 0.38%.
  • Miners lifted Australia to a small rise on predictions of higher commodity prices, though companies directly hurt by the floods fell.
  • Japan finished almost literally flat. Financials went up on foreign buying and short-covering and trading houses gained on higher commodities prices. Exporters went up on a weaker yen.
  • Japan December M3 +1.8% y/y. December M2 +2.3% y/y. November trade surplus ¥259.7B, (46.6%) y/y. November current account surplus ¥926.2B vs consensus ¥977.7B.