TODAY’S S&P 500 SET-UP - February 3, 2011
Equity futures are trading slightly below fair value following yesterday's weak internals which saw major indices close all but flat. As we look at today’s set up for the S&P 500, the range is 19 points or -0.92% downside to 1292 and +0.53% upside to 1311.
MACRO DATA POINTS:
- 8:30 a.m.: Net export sales, commodities
- 8:30 a.m.: Non-farm productivity, est. 2.0%
- 8:30 a.m.: Jobless claims, est. 420k, prior 454k
- 10 a.m.: ISM Non-Manufacturing, est. 57.1, prior 57.1
- 10 a.m.: Factory orders, est. (-0.5%), prior 0.7%
- 10:30 a.m.: EIA Natural Gas, est. (-187), prior (-174)
- 8 p.m. Fed’s Kocherlakota speaks in Minn. (Topic similar to Jan. 11 speech)
EARNINGS/WHAT TO WATCH:
- Dunkin’ Donuts CEO Nigel Travis told CNBC co. may “do something like an IPO” in the future. Sees “no pressure” to do it immediately. In statement, Dunkin’ reports prelim. fiscal 2010 rev. up 7% to $575m to $580m, global system-wide 2010 sales up 7% to $7.7b, same store sales up 2.3%
- Gunfire erupted in Cairo’s Tahrir Square early today as supporters of President Mubarak battled with demonstrators. Europe’s Cameron, Merkel and Sarkozy demand immediate regime change in Egypt.
- Nippon Steel and Sumitomo Metal Industries plant to merge to form world’s second-largest steelmaker behind ArcelorMittal.
- Bank of America is said to be near an agreement to sell its Balboa insurance unit to Australia’s QBE Insurance.
- SharesPost to publish first report on value of Groupon, 10 a.m.
- Ameriprise (AMP): 4Q op EPS miss
- BMC Software (BMC): 3Q adj. EPS miss
- Cadence Design (CDNS): Sees 1Q EPS 8c vs est. 6c
- Green Mountain Coffee (GMCR): Sees 2Q adj. EPS 38c-42c, est. 34c
- GT Solar International (SOLR): Raised 2011 EPS view
- Hartford Financial (HIG): 4Q EPS beats est.
- News Corp. (NWSA): 2Q EPS, Rev. beat; evaluating alternatives for MySpace
- Shutterfly (SFLY): Sees yr EPS $1.16, est. 98c.
- Southern Copper (SCCO): 4Q EPS beat
- Visa (V): Reaffirmed view for 2011 rev.
- Yum! Brands (YUM): 4Q adj. EPS, rev. beat
The XLP and XLY remain broken on TRADE - 7 of 9 sectors positive on TRADE and 9 of 9 sectors positive on TREND.
- One day: Dow +0.02%, S&P (0.27%), Nasdaq (0.04%), Russell 2000 (0.34%)
- Month-to-date: Dow +1.26%, S&P +1.39%, Nasdaq +1.85%, Russell +1.91%;
- Quarter/Year-to-date: Dow +4.01%, S&P +3.69%, Nasdaq +3.67%, Russell +1.60%
- Sector Performance - (8 sectors down and 1 up): - Financials (0.78%), Utilities (0.55%), Healthcare (0.34%), Consumer Spls (0.38%), Materials (0.16%), Industrials (0.31%), Consumer Disc (0.29%), Energy (0.08%), Tech +0.18%
- ADVANCE/DECLINE LINE: -197 (-2159)
- VOLUME: NYSE 933.47 (-14.72%)
- VIX: 17.30 -1.87% YTD PERFORMANCE: -2.54%
- SPX PUT/CALL RATIO: 2.35 from 1.21 (+94.52%)
CREDIT/ECONOMIC MARKET LOOK:
Treasuries were weaker for a third straight session.
- TED SPREAD: 16.44 +0.406 (2.531%)
- 3-MONTH T-BILL YIELD: 0.16% +0.01%
- YIELD CURVE: 2.85 from 2.87
- CRB: 343.80 +0.48%
- Oil: 90.86 +0.10% - trading +1.12% in the AM
- COPPER: 454.40 -0.07% - trading +0.29% in the AM
- GOLD: 1,329.97 -0.90% - trading +0.26% in the AM
- Blaming it on the traders....Commodity traders in the European Union may face restrictions including position limits under proposals from the European Commission aimed at curbing excessive price volatility.
- Inventories at Cushing, Oklahoma, the delivery point for New York-traded West Texas Intermediate oil, increased 667,000 barrels to 38.3 million, the highest level since the department started keeping records at the storage hub in 2004.
- Natural gas futures climbed for the third day in four in New York on forecasts of below-normal temperatures in the Midwest that would boost demand for the heating fuel.
- Cash premiums for corn and soybeans shipped this month to terminals near New Orleans rose relative to Chicago futures after a Midwest blizzard threatened to hinder grain sales and transportation.
- As Australia’s worst floods caused as much as $20 billion of damage to eastern states, 3,000 kilometers (1,900 miles) to the west farmer Pete Mills is battling a Chinese mining company for water after a decades-long drought. At stake is the output of the country’s biggest wheat- growing state at a time when global food shortages have pushed prices to records. The drought has already prompted the government of Western Australian state Premier Colin Barnett to cut its economic growth forecast for the year to June 30 to 4%, from 4.5%
Dollar gains vs majority of counterparts while euro holds gains vs yen on speculation ECB will signal willingness to tackle inflation at meeting today.
- EURO: 1.3788 -0.25% - trading -0.19% in the AM
- DOLLAR: 77.158 +0.12% - trading +0.04% in the AM
- FTSE 100: (0.41%); DAX: (-0.12%); CAC 40: (1.14%); IBEX: (-1.18%)
- European stocks slide as gunfire erupts in Cairo and political turmoil in Middle East spreads to Yemena and ahead of the ECB's monetary policy meeting.
- Europe economic news was constructive.
- Declining sectors lead advancers 15-3 with construction (1.4%) and healthcare (1%) leading fallers and technology +0.3% and telecom +0.2% heading gainers.
- Jan Final Services PMI
- France 57.8 vs prelim 57.1
- Germany 60.3 vs prelim 60.0
- EuroZone 55.9 vs prelim 55.2
- UK Jan services PMI 54.5 vs consensus 51.4
- Nikkei (0.25%); Hang Seng, Shanghai Composite closed for Lunar NY
- Markets finished mixed, in a tight band, following a tepid performance by Wall Street.
- Egyptian turmoil dents confidence...
- Gains for basic materials producers boost Australia’s S&P/ASX 200. Insurers rose after Cyclone Yasi caused less damage than feared.
- Japanese stocks fall for first time in three days. Panasonic drops 3.2%, leading consumer stocks lower after 3Q net income misses estimates. Exporters were sold on a strong yen.
- Markets in China, Hong Kong, South Korea, Singapore, Taiwan and Vietnam are closed for the Lunar New Year.