TODAY’S S&P 500 SET-UP - March 4, 2011
Equity futures are trading above fair value in a follow-through from yesterday, which saw the Dow post its largest one-day gain since December 2010. Today's non-farm payroll number is the key catalyst, with consensus at +190K for February. April crude futures climbed back above $102 a barrel overnight as tension in the Middle East remains heightened and hopes fade for negotiated peace deal in Libya. As we look at today’s set up for the S&P 500, the range is 24 points or -0.97% downside to 1318 and 0.83% upside to 1342.
MACRO DATA POINTS:
- 8:30 a.m.: Nonfarm payrolls: est. +196k, prior 36k
- 8:30 a.m.: Unemployment rate: est. 9.1%, prior 9.0%
- 10 a.m.: Fed’s Yellen speaks on international system in Paris
- 10 a.m.: Fed’s Nelson testifies on TALF liquidity facility
- 10 a.m.: Factory orders, est. +2.0%, prior +0.2%
- 1 p.m.: Baker Hughes Rig Count
EARNINGS/WHAT TO WATCH:
- Goldman Sachs CEO Blankfein said to agree to testify at Raj Rajaratnam’s trial, set to begin next week
- NFL, union labor deadline extended by 24 hours to midnight
- BP Pipelines North America may restart the Tri-States natural gas liquids pipeline
- The U.S. DoJ is probing online video patent owner MPEG LA over antitrust concerns regarding claims against Google’s VP8: WSJ
PERFORMANCE:
We have 8 of 9 sectors positive on TRADE and 9 of 9 sectors positive on TREND. XLF is the only sector broken on TRADE.
- One day: Dow +1.59%, S&P +1.72%, Nasdaq +1.84%, Russell 2000 +2.22%
- Month-to-date: Dow +0.26, S&P +0.28%, Nasdaq +0.59%, Russell +0.84%
- Quarter/Year-to-date: Dow +5.88%, S&P +5.83%, Nasdaq +5.50%, Russell +5.77%
- Sector Performance: - Industrials +2.4%, Financials +2.2%, Healthcare +2%, Materials +2%, Tech +1.7%, Consumer Disc +1.7%., Energy +1.5%, Consumer Spls. +1.1%, Utilities +1%
EQUITY SENTIMENT:
- ADVANCE/DECLINE LINE: 1914 (+1111)
- VOLUME: NYSE 1074.11 (+4.79%)
- VIX: 18.60 -10.14% YTD PERFORMANCE: +4.79%
- SPX PUT/CALL RATIO: 1.60 from 2.02 (20.75%)
CREDIT/ECONOMIC MARKET LOOK:
Treasuries were weaker with the better global risk backdrop, upbeat economic data, rally in stocks and lingering inflation concerns.
- TED SPREAD: 19.08 +0.203 (1.075%)
- 3-MONTH T-BILL YIELD: 0.13%
- 10-Year: 3.58 from 3.46
- YIELD CURVE: 2.79 from 2.77
COMMODITY/GROWTH EXPECTATION:
- CRB: 360.56 +0.40%; YTD: +8.34%
- Oil: 101.91 -0.31%; YTD: +10.40% (trading +0.67% in the AM)
- COPPER: 449.00 -0.18%; YTD: +2.25% (trading +1.04% in the AM)
- GOLD: 1,417.69 -1.43%; YTD: -0.08% (trading +0.10% in the AM)
COMMODITY HEADLINES:
- Commodities Rise to Two-Year High as Cotton Jumps to Record, Cocoa Gains
- Deere Courts Indian Farmers, South Korea Scouts Chicago Amid Price Rally
- Bearish Bets on Soybeans, Cattle Surge to Two-Year High in Options Market
- Cotton Gains to Record, Heads for Biggest Weekly Advance in Three Months
- Coffee Rises on Speculation About Short Supply; Cocoa Reaches 32-Year High
- Wheat Advances as Dry Weather Fans Concern About Possible U.S. Crop Damage
- Copper Heads for First Weekly Climb in Four Before U.S. Employment Report
- Gold May Extend Best Run of Weekly Gains Since October on Mideast Turmoil
- Saudi Arabia May Raise Light Crude Oil Premium to Highest Since July 2008
- Gillard Weighs Impact of Currency's Gains, Says Commodity Boom Will Endure
- Container Shipping Shares Boom as Dry Bulk Carriers Wane: Freight Markets
- High Food Prices May Persist as Economic Growth Boosts Demand, IMF Says
- Ferrous Resources Said to Seek Funding for $4 Billion Iron Ore Expansion
- Copper May Fall Next Week on Concern About Rising Inflation, Survey Shows
CURRENCIES:
- EURO: 1.3935 +0.48% (trading +0.24% in the AM)
- DOLLAR: 76.483 -0.25% (trading +0.01% in the AM)
EUROPEAN MARKETS:
- FTSE 100: +0.59%; DAX: +0.80%; CAC 40: +0.52%
- European markets advanced following strong markets in Asia and a constructive close on Wall Street on growing economic optimism and expectations for a favorable US payroll report after yesterday's better than expected jobless data.
- Bonds continued to be pressured following ECB's Trichet hawkish comments yesterday and a growing expectation of a rate increase in the EuroZone as early as next month.
- Hermes Reports 44% Jump in Earnings as Margins Exceed Increased Forecast
- Daimler's Steel Headwind Saps Profit as Continental AG's Rubber Costs Soar
- Salgado Favors Easing Greek Bailout Terms as EU Wrangles on Crisis Accord
- Crude Heads for Fifth Weekly Gain In London on Libya Violence, U.S. Demand
- Jet Fuel, Diesel Past $1,000 on Libya Fan Growth Concern: Energy Markets
- Ferrous Resources Said to Seek Funding for $4 Billion Iron-Ore Expansion
- U.K. House Prices Dropped Last Month, Erasing January Gain, Halifax Says
ASIAN MARKTES:
- Nikkei +1.0%; Hang Seng +1.2%; Shanghai Composite +1.4%
- Asian markets rose today in response to lower oil prices and lower-than-expected jobless claims in the US.
- Gillard's Concern at Australia Dollar's Impact Shows 'Dutch Disease' Risk
- Asian Stocks Advance for Fourth Day This Week on U.S. Employment Data, Oil
- Dollar Yield Gap at 21-Month High as Prices May Spur Unrest: China Credit
- China Forestry Ex-CEO Should Face Hong Kong Lawsuit, City's Watchdog Says
- Korea Express Shareholders Said to Seek up to $1.8 Billion From Stake Sale
- Record Food Prices May Persist as Economic Growth Boosts Demand, IMF Says
- Singapore Court Rejects Former Standard Chartered Clients' Bid to Sue Bank
- Singapore Exchange's ASX Takeover Offer Gets a Boost From Chi-X Approval
- Chinese IPO Risk on U.S. Markets Tops American Corporations, Options Show
Howard Penney
Managing Director
