TODAY’S S&P 500 SET-UP - May 31, 2011
When the top news story after a long weekend (and on the day of month end markups) is Greece being set free from the shackles of a free market pricing in default, you know this gargantuan Fiat Fool experiment is running long in the tooth. Obviously, USD down, Euro up, on a sloppy news item like this puts The Correlation Risk right back on the table for June. That’s the TREND. As we look at today’s set up for the S&P 500, the range is 17 points or -0.61% downside to 1323 and 0.67% upside to 1340.
SECTOR AND GLOBAL PERFORMANCE
EQUITY SENTIMENT:
- ADVANCE/DECLINE LINE: 1379 (+118)
- VOLUME: NYSE 692.69 (-18.13%)
- VIX: 15.98 -0.68% YTD PERFORMANCE: -9.97%
- SPX PUT/CALL RATIO: 1.20 from 1.76 (-31.72%)
CREDIT/ECONOMIC MARKET LOOK:
- TED SPREAD: 20.72 -0.607 (-2.846%)
- 3-MONTH T-BILL YIELD: 0.05%
- 10-Year: 3.07 from 3.07
- YIELD CURVE: 2.59 from 2.59
MACRO DATA POINTS:
- 9 a.m.: S&P/Case Shiller Home Price, est. down 3.4% Y/y, down 0.24% M/m
- 9:45 a.m.: Chicago Purchasing Manager:, est. 62.0, prior 67.6
- 10 a.m.: Consumer confidence, est. 66.5, prior 65.4
- 10 a.m.: NAPM-Milwaukee, est. 60.5, prior 68.0
- 10:30 a.m.: Dallas Fed Manuf. Activity, est. 8.0, prior 10.5
- 11 a.m.: Export inspections: corn, soybeans, wheat
- 11:30 a.m.: U.S. to sell $27b 3-mo. bills, $24b 6-mo. bills
- 4 p.m.: Crop progress corn, cotton, winter wheat, soybean
WHAT TO WATCH:
- Airlines gaining more revenue from add-ons to ticket sales - WSJ
- American carmakers move focus to small cars - NYT
- 3D films not jumping off the screen in North America anymore - NYT
- WSJ says that higher capital doesn't solve all of banks' problems
COMMODITY/GROWTH EXPECTATION
COMMODITY HEADLINES FROM BLOOMBERG:
- Commodities Snap Best Winning Streak Since 1980 on European Debt, China
- Aluminum Processors in China Told to Prepare for Power Shortages, CRU Says
- Pork Imports by Korea Surging on Foot & Mouth Help Smithfield Foods Sales
- Palladium Rising as BMW Becomes Catalyst for Biggest Shortage in 32 Years
- Record Rice Crop May Let India End Export Ban, Capping Global Food Costs
- Copper Advances on Japanese Manufacturing Growth, Greece Aid Speculation
- Oil Gains for Second Day on Keystone Pipeline, U.S. Consumer Confidence
- Juan Valdez Eyes China as Colombia Coffee Farmers Steer Asians From Tea
- Wheat Declines Most in a Week as Russia Says it Will End Grain-Export Ban
- Copper in London Declines, Set for Third Monthly Loss, on Growth Concerns
- Rubber Has First Monthly Advance Since January on Outlook for Tire Demand
- Australia GDP Likely Shrank for First Time Since 2008 on Flood Disruptions
- Voestalpine Profit Rises Almost Five-Fold; Sees Additional Growth in 2012
- European Commodity Day Ahead: Palladium Set to Rebound on Global Shortage
CURRENCIES
EUROPEAN MARKETS
- Europe is up because Greece didn't evaporate today? Greece +3.8% this morn, but still down -25% since February and BROKEN
- Eurozone April Unemployment rate +9.9% vs consensus +9.9% and prior +9.9%
- Eurozone May inflation estimate +2.7% y/y vs consensus +2.8% and prior +2.8%
- France April consumer spending (1.8%) m/m vs consensus (0.3%) and prior revised to (1.0%) from (0.7%)
- Germany April Retail sales +3.6% y/y vs consensus (0.1%) and prior revised to (3.6%) from (3.5%); Germany April Retail sales +0.6% m/m vs consensus +1.8% and prior revised to (2.7%) from (2.1%)
ASIAN MARKETS
- ASIA is seeing a strong mean reversion bounce to lower-highs across the region; China stopped going down +1.4%; Japan +2%, Korea +2.3%
- Moody's places Japan's ratings on review for possible downgrade
MIDDLE EAST
Howard Penney
Managing Director