TODAY’S S&P 500 SET-UP – March 1, 2011
Equity futures are trading above fair value as markets show plenty of resilience despite continuing turmoil in the Middle Eastern. Yesterday's momentum came on the back of renewed M&A excitement, better than expected Chicago PMI, a positive headline personal income report. As we look at today’s set up for the S&P 500, the range is 32 points or -1.22% downside to 1311 and 1.19% upside to 1343.
MACRO DATA POINTS:
- 7:45 a.m.: ICSC weekly sales
- 10 a.m.: Bernanke testifies about Fed monetary policy
- 10 a.m.: Treasury’s Geithner at House Financial Services Committee
- 10 a.m.: Construction spending, est. (-0.4%), prior (-2.5%)
- 10 a.m.: ISM Manufacturing, est. 61, prior 60.8
- 11:30 a.m.: U.S. to sell $40b in 4-week bills, $25b in cash- management bills
- 4:30 p.m.: API inventories
EARNINGS/WHAT TO WATCH:
- Bernanke begins 2 days of semiannual testimony on monetary policy today.
- U.S., European nations promise humanitarian aid to Libya, begin planning for a no-fly zone as leader Muammar Qaddafi declares “my people love me”, sends forces to regain lost territory.
- The proposed auction of Blockbuster is being opposed by Walt Disney. Disney, with a $9.2m claim for merchandise shipped to Blockbuster after it filed for Chapter 11, said in a filing yesterday in U.S. Bankruptcy Court in Manhattan that the proposed bid favors the secured lenders over Blockbuster’s other creditors
- General Mills, Nestle among leading bidders for 50% stake in yogurt maker Yoplait being sold by PAI Partners, four people familiar with the process say.
- U.S. House plans to vote today on a budget measure aimed at preventing a government shutdown while lawmakers debate spending levels for the rest of this fiscal year. Republican proposal would cut $4b by targeting a handful of programs while keeping almost all agencies at current spending levels until March 18. Failure to enact a measure by March 4, when current spending authority ends, would force the government to close
We have 6 of 9 sectors positive on TRADE and 9 of 9 sectors positive on TREND.
- One day: Dow +0.79%, S&P +0.56%, Nasdaq +0.04%, Russell 2000 +0.18%
- Month-to-date: Dow +2.81%, S&P +3.20%, Nasdaq +3.04%, Russell +5.40%
- Year-to-date: Dow +6.40%, S&P +5.33%, Nasdaq +4.88%, Russell +5.08%
- Sector Performance: - Materials +1.08%, Energy +0.77%, Consumer Spls +0.58%, Healthcare +1.11%, Utilities +1.13%, Industrials +0.24%, Tech +0.42%, Consumer Disc +0.76%, Financials 0.47%
- ADVANCE/DECLINE LINE: 1091 (-752)
- VOLUME: NYSE 1257.46 (-31.66%)
- VIX: 18.35 -4.35% YTD PERFORMANCE: +3.38%
- SPX PUT/CALL RATIO: 2.30 from 1.88 (+21.80%)
CREDIT/ECONOMIC MARKET LOOK:
- TED SPREAD: 17.05 -0.406 (-2.326%)
- 3-MONTH T-BILL YIELD: 0.13%
- 10-Year: 3.42 from 3.46
- YIELD CURVE: 2.70 from 2.73
- CRB: 352.58 +0.37%; YTD: +5.94%
- Oil: 97.38 -0.93%; YTD: +4.62% (trading +0.42% in the AM)
- COPPER: 449.65 +0.93%; YTD: +1.34% (trading -0.07% in the AM)
- GOLD: 1,411.90 +0.28%; YTD: -0.33% ( trading +0.16% in the AM)
- Oil fell the most in two weeks as Saudi Arabia offered to make up for supplies lost because of unrest in Libya and on reports the North African country is exporting crude.
- Grains, Sugar May Drop as Farmers Increase Output, Yields, Australia Says
- Copper May Slide as Chinese Manufacturing Figures Fan Concern About Demand
- China May Invest in Australian Dairy, Livestock in Food Security Search
- Coffee Rises to One-Week High on Speculation Vietnam Supply to Be Limited
- Commodities in Longest Winning Streak Since '04 Beat Stocks, Bonds, Dollar
- Pakistan Signs Contracts to Ship 3.075 Million Tons Wheat, Exceeds Target
- Australia Forecasts Increased Cotton, Sugar Production, Decline in Wheat
- Gold May Advance as Unrest in Libya, Weakening Dollar Spur Investor Demand
- China Copper Premiums Slump to Zero as Overseas Prices Outpace Local Gains
- U.K. Royal Mint Gold-Coin Production Doubles as Bullion Climbs to Record
- Rubber Climbs for First Time in Eight Days as Decline Attracts Investors
- Noble Group Seeks More Mongolia Coal Deals to Add to Rising Energy Profit
- EURO: 1.3792 +0.28% (trading +0.38% in the AM)
- DOLLAR: 76.889 -0.50% (trading -0.15% in the AM)
- FTSE 100: +0.37%; DAX: +0.75%; CAC 40: +0.56% (as of 04:58 ET)
- European markets mainly trade higher aided by firmer markets across Asia and constructive European economic data.
- Corporate results were mixed.
- European Commission raises 2011 GDP forecast for euro region to 1.6% from 1.5% and says inflation may remain above ECB limit for most of the year.
- Peripheral markets were shrugged by Germany's Finance Minister rejecting any easing of the terms for Ireland or Greece's bailout package.
- UK Feb Nationwide house prices (0.1%) y/y vs con (0.3%)
- Feb final Manf PMI: France 55.7 vs con 55.3; Germany 62.7 vs con 62.6; Eurozone 59.0 vs con 59.0
- Germany Feb unemployment rate +7.3% vs con +7.4%
- UK Feb Manf PMI 61.5 vs con 61
- UK Jan mortgage approvals 45.7k vs con 43.0k
- Nikkei +1.22%; Hang Seng +0.25%; Shanghai Composite +0.48%
- Asian markets were higher this morning, encouraged by stable oil prices and signs growth slowed in China which eased concerns surrounding further tightening measures.
- India led the region higher by 3.50% buoyed by automakers after the finance ministry didn't raise excise duties on automobiles. In India, Tata Motors was up over 4% and Maruti Suzuki was up over 6%
- Chinese PMI hit a six month low in February of 52.5 vs 52.9 in January
- Australia's central bank left its benchmark rate unchanged at 4.75%, as expected