TODAY’S S&P 500 SET-UP - April 28, 2011
As advertised, the Bernanke did exactly what we thought he’d do yesterday: (1) Raised his inflation forecast; (1) Cut his GDP forecast and (3) Burned the Buck. As we look at today’s set up for the S&P 500, the range is 32 points or -2.04% downside to 1328 and 0.32% upside to 1360.
SECTOR AND GLOBAL PERFORMANCE
The Financials remain the only sector broken on both TRADE and TREND.
EQUITY SENTIMENT:
- ADVANCE/DECLINE LINE: 832 (-530)
- VOLUME: NYSE 960.95 (+5.67%)
- VIX: 15.35 -1.73% YTD PERFORMANCE: -13.52%
- SPX PUT/CALL RATIO: 1.21 from 1.15 (+5.28%)
CREDIT/ECONOMIC MARKET LOOK:
- TED SPREAD: 22.25
- 3-MONTH T-BILL YIELD: 0.06% -0.01%
- 10-Year: 3.39 from 3.34
- YIELD CURVE: 2.72 from 2.74
MACRO DATA POINTS:
- 8:30 a.m.: GDP 1Q advance, est. 2.0% (annualized), prior 3.1%
- 8:30 a.m.: Initial jobless claims, est. 395k, prior 403k
- 8:30 a.m.: Fed’s Duke, Williams speak at Community Affairs Conference in Virginia
- 9:45 a.m.: Bloomberg Consumer Comfort, est. (-43.0), prior (-42.6)
- 10 a.m.: Pending home sales, est. 1.5% M/m, prior 2.1%
- 10 a.m.: Freddie Mac mortgage rates
- 10:30 a.m.: EIA Natural Gas Change
- 1 p.m.: U.S. to sell $29b 7-yr notes
WHAT TO WATCH:
- New Zealand’s central bank kept its benchmark interest rate at a record low and called the local currency’s rise “unwelcome.”
- Most emerging-market stocks fell on concern China will raise interest rates as early as next week.
- U.S. ‘Disappointed’ by India Rejection of U.S. Aircraft - Bloomberg
- Google May Overtake Apple in App Sales: All Things Digital
- Deutsche bank profit exceeds estimates as money management reaches record
- SAP reports 4.1% gain in first-quarter profit, missing analyst estimate
COMMODITY/GROWTH EXPECTATION
COMMODITY HEADLINES FROM BLOOMBERG:
- Sugar Seen Capped by Record Thai Production, Curbing Nestle, Kraft Costs
- Gold Climbs to Record as Bernanke Maintains Stimulus, Dollar Extends Drop
- Copper Climbs for First Day in Three
- Aluminum Advances to 32-Month High
- Crude Oil Futures Retreat From 31-Month High
- Corn Futures Advance in Chicago as U.S. Midwest May Face ‘Severe Flooding’
- Sugar Falls as Thai Production May Cap Price Gains; Coffee, Cocoa Advance
- Rubber Futures Advance for First Day in Four as Fed to Maintain Stimulus
- Abu Dhabi Oil Surges to Three-Year High on Chinese Demand
- Copper May Drop Next Week as Stocks Gain, China Demand Slows, Survey Shows
CURRENCIES
EUROPEAN MARKETS
- German unemployment declines to 19-year low as export boom drives demand
- German unemployment -37K, est. -37k (prior -55k)
- German unemployment rate 7.1%, est. 7.0% (prior 7.1%)
- Italian business confidence , est. 103.5 (prior 103.8)
- European stocks climb as deutsche bank beats analysts’ earnings estimates
- AstraZeneca first-quarter profit beats analyst estimates after tax accord
- Spain’s local elections may expose wider deficits in risk for bond markets
- UK consumer confidence declines to lowest since depth of 2009 recession
- France Mar consumer spending (0.7%) m/m vs consensus +0.2%
ASIA PACIFIC MARKTES:
- Japan quake takes bigger-than-estimated economic toll; BOJ lowers forecast
- Japanese earnings push the Nikkei 225 to the highest level since the March 11 quake.
- Asian stocks were mixed
- Nomura profit falls 35% as investment banking fees, trading income decline
- Panasonic plans to cut 17,000 jobs on Sanyo acquisition, television losses
- China economic growth faces risks from property ‘shocks,’ world bank says; China declined for the 5th straight day.
- China telecom net income climbs 8.1% on increase in mobile-phone customers
- Grantham sees one-in-four chance of china stumbling over excess spending
- RBA faces rate pressure as CPI outweighs record currency
MIDDLE EAST
Howard Penney
Managing Director