TODAY’S S&P 500 SET-UP - April 8, 2011
Both China and Europe raise interest rates this week; Chinese and European stocks both rallied on the decision. China, which is the country we like most on the long side right now was up for the 3three consecutive following the rate hike to +7.9% YTD. As we look at today’s set up for the S&P 500, the range is 31 points or -1.61% downside to 1312 and 0.71% upside to 1343.
SECTOR AND GLOBAL PERFORMANCE
We are on DAY 5 of perfect with 9 of 9 sectors positive on TRADE and 9 of 9 sectors positive on TREND.
- ADVANCE/DECLINE LINE: -758 (-1178)
- VOLUME: NYSE 907.05 (+2.43%)
- VIX: 16.90 -2.87% YTD PERFORMANCE: -4.79%
- SPX PUT/CALL RATIO: 1.93 from 1.48 (+30.35%)
CREDIT/ECONOMIC MARKET LOOK:
Treasuries fell, sending 10-year yield to 3.57%, as traders added to bets on inflation, Fed Bank of Richmond President Jeffrey Lacker said may raise interest rates this year.
- TED SPREAD: 25.40
- 3-MONTH T-BILL YIELD: 0.04% -0.02%
- 10-Year: 3.58 from 3.56
- YIELD CURVE: 2.71 from 2.66
MACRO DATA POINTS:
- 8 a.m.: Fed’s Lockhart to speak in Knoxville, Tenn.
- 8:30 a.m.: WASDE grains
- 10 a.m.: Wholesale inventories, est. 1.0%, prior 1.1%
- 10:15 a.m.: Fed’s Fisher speaks in Dallas to business writers
- 1 p.m.: Baker Hughes rig count
WHAT TO WATCH:
- Royal Bank of Canada has gotten expressions of interest to buy or merge its US operations - Globe and Mail (C$60.29)
- Moody’s downgraded covered bonds issued by Portuguese banks including Banco BPI, Banco Comercial Portugues and Banco Espirito Santo following the April 6 cut in the lenders’ ratings.
- Petrobras Discovers More Evidence of Oil in Offshore Lula Field
- Disney, partners break ground on Shanghai Disney resort
- Fed reports balance sheet assets of $2.65T on Wednesday, +$26.2B w/w and +$341.9B y/y
- CNBC reports that AIG submitted some of the winning bids in yesterday's Federal Reserve auction of Maiden Lane II bonds
- Expedia (EXPE) to split into two by separating TripAdvisor unit into publicly traded company
COMMODITY HEADLINES FROM BLOOMBERG:
- Commodities Rise for Seventh Day to Two-Year High, Led by Cotton, Silver
- Copper Rises to One-Month High in London on Growth Outlook: LME Preview
- Gold Jumps to All-Time High on Concern About Inflation, Weakening Dollar
- U.S. Corn Supply Shrinking as Meat, Ethanol Demand Send Crop Price Higher
- Thailand’s Rice Bowl May Get Smaller as Farmers Curb Output to Spur Prices
- Oil Rises to 30-Month High Above $111 in New York, $124 in London on Libya
- Sugar Rises for a Second Day on Supply Speculation; Cocoa Prices Decline
- Japan To Restrict Rice Planting in Fukushima After Testing for Radiation
- Wheat Imports to China Will Drop as Drought Ebbs, Analyst Says After Tour
- India’s Commodity Futures Market to Grow 25%, Express Says, Citing Khatua
- Quake Lifts U.S. Diesel Cargoes on Three-Month High Profit: Energy Markets
- Equinox Says Minmetals' $6.3 Billion Offer Is ‘Lowball,’ Understates Value
- Sugar May Drop Next Week on Rising Supply From Brazil, India, Survey Shows
- Yen fell after crippled Fukushima nuclear plant escaped damage from the biggest earthquake to strike Japan since March 11.
- Pound at the strongest level since January 2010.
- Rate hikes work! European market are broadly higher today.
- UK Mar Core PPI +3.00% y/y vs consensus +2.90% and prior +3.10%; UK Mar Core PPI +0.40% m/m vs consensus +0.30% and prior +0.10%%.
ASIA PACIFIC MARKTES:
- Japan and China lead Asia higher. India, Thailand and Malaysia were the outliers on the downside.
- Japan February current account surplus +3.0% y/y to ¥1.641T vs cons ¥1.704T.