TODAY’S S&P 500 SET-UP - May 9, 2011
Plenty of talk this morning about what’s not new news to European bond/equity/FX market prices: (1) Greek Bond yields have been pricing in restructuring/default for 6 weeks (10s at 15.65% this morn) and (2) Greek Stocks (ATG Index) have been crashing since FEB (down -0.87% this morn; down -20.8% since February 18th). As we look at today’s set up for the S&P 500, the range is 18 points or -0.54% downside to 1333 and 0.81% upside to 1351.
SECTOR AND GLOBAL PERFORMANCE
The Hedgeye models now have 6 of 9 S&P Sectors bullish TRADE and 7 of 9 bearish TREND. The XLE and XLF are broken on both durations.
EQUITY SENTIMENT:
- ADVANCE/DECLINE LINE: +993 (+1731)
- VOLUME: NYSE 1026.81 (-7.78%)
- VIX: 18.20 +6.56% YTD PERFORMANCE: +2.54%
- SPX PUT/CALL RATIO: 1.85 from 1.94 (-4.41%)
CREDIT/ECONOMIC MARKET LOOK:
- TED SPREAD: 26.19
- 3-MONTH T-BILL YIELD: 0.02%
- 10-Year: 3.19 from 3.18
- YIELD CURVE: 2.62 from 2.60
MACRO DATA POINTS:
- 11:30 a.m.: U.S. to sell $29b 3-mo., $27b 6-mo. bills
- 4 p.m.: Crop progress (winter wheat, cotton, corn, soybean)
WHAT TO WATCH:
- Hertz makes hostile cash & stock bid for Dollar Thrifty, offering $72-shr; $57.60 in cash, 0.8546-shr equal to $14.40. Offer is 3.3% premium over DTG’s Friday close $69.69.
- Greece wants reduced interest rate on the aid it received from the IMF and the EU -- Reuters
- Marriott increases quarterly dividend by 14.3% to $0.10 from $0.0875; increases stock repurchase program by 25M shares
COMMODITY/GROWTH EXPECTATION
COMMODITY HEADLINES FROM BLOOMBERG:
- Commodities Rebound From Worst Week Since 2008 as Crude Oil, Silver Climb
- Crude in New York Rebounds to $100 After Biggest Weekly Decline Since 2008
- Copper Climbs on Speculation Biggest Weekly Drop Since March Was Overdone
- Wheat, Soybeans Gain Second Day as Commodities Slump, Weather Lure Buyers
- Silver Futures Rally From Worst Weekly Loss Since 1975 as Investors Return
- Sugar Rises as Brazil Production May Miss Estimates; Coffee Prices Climb
- Palm Oil Climbs First Time in Four Days as Commodities Rebound from Slump
- Coal Prices Rise for Sixth Week to Two-Year High in China as Demand Surges
- Mississippi to Crest Tomorrow in Memphis as Floods Expected to Move South
CURRENCIES
EUROPEAN MARKETS
- Eurozone May Sentix Index 10.9 vs consensus 12.0
- UK Halifax Apr House price index (3.7%) y/y vs consensus (2.9%)
- The periphery is dragging down the region on newspaper reports that Greece wants reduced interest rate on the aid it received from the IMF/EU
ASIAN MARKETS
- Most Asian markets rose today on the back of positive US employment data.
MIDDLE EAST
Howard Penney
Managing Director
