TODAY’S S&P 500 SET-UP – February 4, 2011
Equity futures are trading near fair value following Thursday's late rally which erased earlier losses and ahead of today's January jobs report.
Also, focus will fall on the EU leader's summit in Brussels which will address the thorny issue of whether to strengthen the Financial Stability Mechanism. According to the latest press releases, Germany and France remain split on the issue of bond buybacks and on how best to co-ordinate a response to the crisis.
As we look at today’s set up for the S&P 500, the range is 20 points or -0.93% downside to 1295 and +0.60% upside to 1315.
MACRO DATA POINTS:
- 8:30 a.m.: Non-Farm payrolls, Jan., est. 146k, prior 103k
- 8:30 a.m.: Private payrolls, Jan., est. 145k, prior 113k
- 8:30 a.m.: Manuf. payrolls, Jan., est. 10k, prior 10k
- 8:30 a.m.: Unemployment rate, Jan., est. 9.5%, prior 9.4%
- 10 a.m.: Fed’s Patrick Parkinson testifies to Congress on CRE
- 1 p.m.: Baker Hughes rig count, Feb. 4
TODAY’S WHAT TO WATCH:
- Egyptians poured into Cairo’s Tahrir Square before Friday prayers, raising the prospect of more violence. Mubarak tells ABC News late yesterday he fears “there will be chaos” if he abruptly quits, warns the Muslim Brotherhood will come to power.
- FDA staff report due before Feb. 8 advisory panel on data gathered on drugs given marketing clearance before 2009 under accelerated approval program: Includes LLY’s Erbitux for colorectal cancer, GSK’s Bexxar for non-Hodgkin’s lymphoma and Arranon for T-cell leukemia and lymphoma, GENZ’s Clolar for pediatric leukemia
- UBS says employees will find out about their bonuses on Feb. 16, rather than planned Feb. 9, receive them in early March, because of regulatory reviews
- Daimler Says Its View on EADS Stake Is Unchanged: WSJ
- EADS Golden Share Considered as Daimler Seeks Exit: Tribune
- China’s AVIC May Seek U.S. Defense Contracts: WSJ
- U.S. Companies Increase Contract Hiring: Detroit Free Press
- Consumers Turn to Plasma TVs as Prices Fall: L.A. Times
- U.S. Aviation Bill Won’t Give Carriers Equipment: WSJ
- Rosneft May Buy Out Russian Holders of TNK-BP: Vedomosti
- Ralphs Grocery Faces Fine for Overcharging: L.A. Times
Only the XLP remains broken on TRADE - 8 of 9 sectors positive on TRADE and 9 of 9 sectors positive on TREND.
- One day: Dow +0.17%, S&P +0.24%, Nasdaq +0.16%, Russell 2000 +0.31%
- Month-to-date: Dow +1.43%, S&P +1.63%, Nasdaq +1.99%, Russell +2.22%
- Quarter/Year-to-date: Dow +4.19%, S&P +3.93%, Nasdaq +3.81%, Russell +1.91%
- Sector Performance - (All 9 sectors traded higher): - Consumer Disc +1.17%,Materials +0.42%, Consumer Spls +0.52%, Utilities +0.41%, Healthcare +0.13%, Tech +16%, Financials +0.03%, Energy +0.05%, Industrials +0.04%
- ADVANCE/DECLINE LINE: 268 (+465)
- VOLUME: NYSE 999.87 (+7.11%)
- VIX: 16.69 -3.53% YTD PERFORMANCE: -5.97%
- SPX PUT/CALL RATIO: 1.67 from 2.35 (-29.12%)
CREDIT/ECONOMIC MARKET LOOK:
Treasuries were weaker for a fourth straight session.
- TED SPREAD: 17.26 0.406 (2.409%)
- 3-MONTH T-BILL YIELD: 0.14% -0.01%
- YIELD CURVE: 2.87 from 2.85
- CRB: 341.00 -0.81%
- Oil: 90.54 -0.35% - trading +0.22% in the AM
- COPPER: 454.45 +0.01% - trading +0.17% in the AM
- GOLD: 1,354.22 +1.82% - trading -0.41% in the AM
OTHER COMMODITY NEWS:
- World food prices rose to a record in January on higher dairy, sugar and cereal costs and probably will remain elevated, the United Nations said. An index of 55 food commodities climbed 3.4% from December to 231 points, the seventh straight increase.
- London is set to overtake New York as the biggest center of crude and oil product futures trade this year, signaling a shift in power as the British capital benefits from soaring demand in Asia and mounting concerns over the usefulness of key U.S. contracts.
- Newmont Mining Corp., the largest U.S. gold producer, agreed to buy Fronteer Gold Inc. for C$2.3 billion ($2.3 billion) to gain exploration and development projects in Nevada. Newmont is paying a 41 percent premium based on Fronteer’s average share price over the 20 days prior to the deal, according to Bloomberg data.
- Argentine corn farmers will harvest 19.5 million metric tons of corn this season as a drought in the world's second-largest exporter trims output to below estimates, the Buenos Aires Cereals Exchange said. Corn gained in Chicago.
- U.S. wheat futures fell on Thursday, retreating from 2-1/2 year highs amid profit-taking, disappointing exports and a stronger dollar, but worries that extremely cold weather in the U.S. Plains might hurt the winter wheat crop underpinned prices.
- A drought may slow economic growth in Kenya for the first time in three years as farmers in the world’s biggest black-tea exporting nation scale back production and millions face food shortages.
- EURO: 1.3649 -1.01% - trading -0.15% in the AM
- DOLLAR: 77.748 +0.76% - trading +0.06% in the AM
- FTSE 100: +0.40%; DAX: +0.27%; CAC 40: +0.33%; IBEX: +0.17 (as of 6:30 ET)
- European markets trade higher helped by a late rally on Wall Street and firmer markets in Asia.
- Corporate results were mixed and there is limited European economic data scheduled.
- The focus is on the European leader’s summit where German and French leaders will present their proposals for EuroZone economic reform and there are hopes that discussion may lead to a stronger bailout fund.
- Advancing sectors lead decliners 14-4 led by insurers and construction both up +1.4%; food & beverage (0.8%) and personal & household (0.3%) lead laggards.
- Spain 4Q GDP probably advanced 0.2% from the 3Q and 0.6% Y/Y, the Madrid-based Bank of Spain said today in its monthly bulletin. Banks higher on the news
- UK SMMT January new car registrations (11.5%) y/y
- UK Jan house prices up 0.8% M/M but down (2.4%) y/y vs consensus (3.0%) - Halifax
- Nikkei +1.1%; Hang Seng (closed); Shanghai Composite (closed)
- Asian markets that were open rose solidly today, though trade was thin since so many markets around the region are closed.
- Japan rose, as the announcement that Sumitomo Metal and Nippon Steel plan to merge had investors gambling a round of industry reorganization is pending. The stocks soared 16% and 9%, respectively, leading the steel sector to a significant gain.
- Indian stocks fall after PM Manmohan Singh says inflation poses “serious threat” to growth.
- Australia rallied 0.87%. QBE Insurance Group jumped 7% after agreeing to buy Balboa Insurance from Bank of America. Miners rose on higher commodities prices.
- Indonesia rose 0.44% despite a 25-basis point interest rate increase. Indonesia’s central bank unexpectedly raised its benchmark interest rate for the first time in more than two years after inflation climbed to a 21-month high.
- Thailand up 0.43% - PTT Exploration & Production jumped 6% after Australia said the company would not lose its oil licenses there.
- Hong Kong and South Korea are closed until 7-Feb, Taiwan is closed until 8-Feb, and China is closed until 9-Feb for Lunar New Year.