TODAY’S S&P 500 SET-UP - March 14, 2011
As Hedgeye’s CEO, Keith McCullough, said today “Some of the dysfunctional European equity markets are celebrating fiat socialism this morning with a perfect can kicking of Greek and Spanish liabilities into the long term back of the net.” As we look at today’s set up for the S&P 500, the range is 21 points or -0.94% downside to 1292 and 0.67% upside to 1313.
MACRO DATA POINTS:
- 8:30 a.m.: NOPA Oil Stocks/Soybeans
- 8:30 a.m.: Export Inspections (corn, soybean, wheat)
- 11:30 a.m.: U.S. to sell $62b 3-mo. bills, $30b 6-mo. bills
WHAT TO WATCH:
- Hewlett-Packard CEO Leo Apotheker is set to unveil strategic direction for company
- Retailers sell out of iPad 2 within hours - FT
- SEC is weighing an enforcement action against Fannie Mae and Freddie Mac - WSJ
- Facebook plans to test Groupon-inspired service
- India’s Oil & Natural Gas Corp. lost bid to buy Exxon Mobil Corp.’s 25% stake in an Angolan oil field, two people with knowledge of the matter say
- Berkshire Hathaway is to buy Lubrizol for about $9.7b.
As of the close yesterday we have 3 of 9 sectors positive on TRADE and 8 of 9 sectors positive on TREND. The 3 Sectors that remain bullish on both TRADE and TREND durations are all low beta defensive sectors:
- Healthcare (XLV)
- Utilities (XLU)
- Consumer Staples (XLP)
- One day: Dow +0.50%, S&P +0.71%, Nasdaq +0.54%, Russell +0.41%
- Month-to-date: Dow (1.49%), S&P (1.73%), Nasdaq (2.40%), Russell (2.50%)
- Quarter/Year-to-date: Dow +4.03%, S&P +3.71%, Nasdaq +2.36%, Russell +2.45%
- Sector Performance: - Energy +1.73%, Materials +1.49%, Industrials +1.17%, Financials +0.67%, Tech +0.39%, Consumer Discretionary +0.62%, Utilities +0.22%, Healthcare +0.33%, Consumer Staples (0.07%).
- ADVANCE/DECLINE LINE: 804 (+2922)
- VOLUME: NYSE 919.93 (-17.87%)
- VIX: 20.08 -8.23% YTD PERFORMANCE: +13.13%
- SPX PUT/CALL RATIO: 2.08 from 1.35 (+53.41%)
CREDIT/ECONOMIC MARKET LOOK:
On Friday, treasuries were notably weaker on selloff pressures following the Japan earthquake.
- TED SPREAD: 23.95 -0.101 (-0.422%)
- 3-MONTH T-BILL YIELD: 0.08%
- 10-Year: 3.40 from 3.37
- YIELD CURVE: 2.76 from 2.81
- CRB: 351.88 +0.71% YTD: +5.73%
- Oil: 101.16 -1.50%; YTD: +6.69% (trading -1.93% in the AM)
- COPPER: 420.75 +0.24%; YTD: -6.06% (trading -0.70% in the AM)
- GOLD: 1,420.18 +0.88%; YTD: +0.38% (trading +0.22% in the AM)
COMMODITY HEADLINES FROM BLOOMBERG:
- Rubber Slumps 13% as Tokyo Exchange Widens Limit on Drop in Japan Demand
- Milk Seen Plunging 14% as Costliest Cheese in Quarter Century Curbs Demand
- Oil Falls to Two-Week Low in New York as Japanese Quake May Limit Demand
- Gold Gains for Second Day on Japanese Quake, Libyan Unrest; Platinum Drops
- Wheat Falls to $7.1525 a Bushel in Chicago, Erasing Advance; Corn Slides
- Copper Fluctuates Amid Concern Japanese Industrial-Metals Demand May Slow
- Coffee Falls on Speculation Robusta Supplies Will Be Ample; Cocoa Rises
- Palm Oil Declines as Japan Quake Triggers Sell-off in Crude Oil, Equities
- Japan Asks Industry Body to Release Corn From Reserves After Earthquake
- Corn, Soybeans May Rise as Price Drop Boosts Demand, According to Survey
- South Korean Steel Mills, Refiners, Automakers Gain on Japan Earthquake
- Philippines May Raise $4.6 Billion to Help Fund Building of Roads, Rail
- EURO: 1.3903 +0.60% (trading +0.45% in the AM)
- DOLLAR: 77.776 -0.65% (trading -0.33% in the AM)
- FTSE 100: 0.02%; DAX: (0.64%); CAC 40: (0.10%)
- European markets generally trade lower from the continuing fall out from the Japanese earthquake.
- Peripheral markets are broadly higher; Greece up 4%, and Greek banks in particular up over +7%. The banks got a boost from the agreement to reduce the interest paid on it's bailout package.
- There was no such agreement announced for Ireland up 0.06%.
- Euro-Area Industrial Production Increased, Led by Germany January output +0.3% M/m, est +0.3%; January. output +6.6% Y/y, est. 6.5%
- The largest categories of growth were intermediate goods (+2.5%) and durable consumer goods (+2.5%). The decline in the production of capital goods (-0.3%), if continued, would suggest that drivers of growth are shifting to consumer spending from investment spending, though a one-month does not make a trend.
- Nikkei (6.2%); Hang Seng +0.4%; Shanghai Composite +0.1%
- In the wake of the earthquake, Japan plunged today, but other Asian markets were mixed. Japan’s central bank doubled its asset-buying scheme to ¥10T and offered to pump ¥15T into the banking system.
- Hong Kong rose on infrastructure issues, but volume was light as some people waited for more information from Japan.
- China finished flat.
- Mining shares fell on worries that Japan’s earthquake will cut demand for raw materials, leading Australia down.
- Japan revised January industrial output +1.3% m/m vs preliminary +2.4%. January capacity utilization index +3.6% m/m.