TODAY’S S&P 500 SET-UP - March 29, 2011
Month end and quarter end markups look like a foregone conclusion in global equity markets this morning – never doubt the inexorable force of our profession making sure we it gets paid. As we look at today’s set up for the S&P 500, the range is 22 points or -1.02% downside to 1306 and 0.65% upside to 1328.
PERFORMANCE
As of the close yesterday we have 8 of 9 sectors positive on TRADE and 9 of 9 sectors positive on TREND. The XLF is the only sector to be broken on TRADE.
EQUITY SENTIMENT:
- ADVANCE/DECLINE LINE: 1090 (+1677)
- VOLUME: NYSE 804.39 (+2.56%)
- VIX: 18.16 -6.58% YTD PERFORMANCE: +2.31%
- SPX PUT/CALL RATIO: 1.73 from 1.82 (-4.63%)
CREDIT/ECONOMIC MARKET LOOK:
- TED SPREAD: 21.07
- 3-MONTH T-BILL YIELD: 0.10% -0.01%
- 10-Year: 3.50 from 3.47
- YIELD CURVE: 2.69 from 2.66
MACRO DATA POINTS:
- US MBA Mortgage purchase applications index (1.7%) last week; total market index (7.5%) compares to +2.7% and +2.7%; refi index (10.1%) vs. +2.7%
- 7:30 a.m.: Challenger job cuts
- 8:15 a.m.: ADP Employment Change, est. 208k, prior 217k
- 10:30 a.m.: DoE inventories
- 1 p.m.: U.S. to sell $29b in 7-yr notes
- 1:30 p.m.: Fed’s Hoenig speaks at London School of Economics
- 2 p.m.: Fed’s Lacker testifies at Dodd-Frank at hearing
- 4 p.m.: Fed’s Bullard speaks at UBS dinner in London
WHAT TO WATCH:
- Obama’s job approval hits low, with overall rating 42% late March vs 46% March 3: Quinnipiac University poll.
- Bullish sentiment increases to 51.6% from 50.6% in the latest US Investor's Intelligence poll (Bearish sentiment increases to 23.1% from 22.4%; those expecting a market correction decreases to 25.3% from 27.0%
- Hearing of House Financial Services subcommittee on the Dodd-Frank Act
- Paul Allen criticizes Bill Gates in new book “Idea Man,” excerpted in Vanity Fair
- Libyan rebels retreat under fire from Qaddafi’s troops. Insurgents driven back to the oil port of Ras Lanuf, according to reports on Al Jazeera television and the Benghazi-based newspaper Breniq
COMMODITY/GROWTH EXPECTATION
COMMODITY HEADLINES FROM BLOOMBERG:
- Soybeans Rise to Highest Price in a Week as U.S. Farmers May Sow More Corn
- Sushi Purchases From Japan Canceled Amid Concerns About Radiation Leakage
- Thai Rubber Losses May Total 20,000 Tons as ‘Freak Weather' Lashes South
- Japanese Oil Ports Still Open to World’s Five Largest Crude-Tanker Lines
- Cocoa Falls on Speculation Ivory Coast Disruption May Ease; Coffee Drops
- Palm Oil Advances on Speculation U.S. Farmers May Reduce Soybean Planting
- Copper Fluctuates on Concern About Economic Growth, Prospects for Demand
- Gold May Climb as Libyan Fighting, European Debt Concern Increase Demand
- Vietnam to Expand Rice Areas to Boost 2011 Output by 1 Million Tons
- Ivory Coast Rebels Advance South, Closing in on Abidjan and Key Cocoa Port
- Japan Testing Farmland for Radiation Before Start of Rice-Planting Season
CURRENCIES
EUROPEAN MARKETS
European markets rose to a 3 week high; longest winning streak since December.
MACRO: European confidence slipped in March; 107.3 from 107.9.
ASIAN PACIFIC MARKTES:
The Nikkei 225 gains to the highest level since the earthquake; Japan February industrial output +0.4% m/m vs consensus (0.2%).
MIDDLE EAST
Howard Penney
Managing Director