TODAY’S S&P 500 SET-UP - June 21, 2011
The USD down = Commodity and Stocks up, but lower-highs on low volume across the board. Is the USD is back down for the week-to-date because:
A) Bernanke has his US Dollar Devaluation Presser in the next 48hrs?
B) Eurocrats are finding a way to hold $1.42 EURO/USD support?
We will get more bullish on Global Equities (China in particular) if the USD strengthens and we Deflate The Inflation - not the other way around. As we look at today’s set up for the S&P 500, the range is 32 points or -1.51% downside to 1259 and 0.99% upside to 1291.
SECTOR AND GLOBAL PERFORMANCE
EQUITY SENTIMENT:
- ADVANCE/DECLINE LINE: +1069 (+296)
- VOLUME: NYSE 786.44 (-50.99%)
- VIX: 19.99 -8.51% YTD PERFORMANCE: +12.62%
- SPX PUT/CALL RATIO: 1.65 from 2.03 (-18.51%)
CREDIT/ECONOMIC MARKET LOOK:
- TED SPREAD: 22.12
- 3-MONTH T-BILL YIELD: 0.03%
- 10-Year: 2.97 from 2.94
- YIELD CURVE: 2.59 from 2.56
MACRO DATA POINTS:
- 7:45 a.m./8:55 a.m.: ICSC Retail/Redbook Retail
- 10 a.m.: Existing home sales, est. 4.8m (-5.5% M/m)
- 11:30 a.m.: U.S. to sell $58b in 4-wk bills
- 4:30 p.m.: API inventories
WHAT TO WATCH:
- Germany June ZEW economic sentiment (9.0) vs consensus (2.0) and prior +3.1;Germany June ZEW current conditions 87.6 vs consensus 89.5 and prior 91.5
- Greek Prime Minister George Papandreou faces a confidence vote in his government
- Jon Huntsman to announce he’s running for president
- Spain Sells 2.4b Euros of 6-Month Bills - Avg 6-mo. yield 1.776% vs 1.766% at May auction.
COMMODITY/GROWTH EXPECTATION
COMMODITY HEADLINES FROM BLOOMBERG:
- Copper Imports by China Slump 47% as Consumers Prefer to Drain Stockpiles
- Oil Gains a Second Day as Euro Crisis Eases, U.S. Crude Supplies Seen Down
- Copper Rises From One-Week Low on Reduced Concern About Greek Debt Default
- Pork Prices in China Seen Staying at Highs as Domestic Shortage Persists
- Raw Sugar Falls on Forecast for Increased Thai Production; Cocoa Advances
- Corn Gains After Slump as Flooding Threatens China Crop Amid Rising Demand
- Gold May Advance as Weaker Dollar, Greek Debt-Default Concern Spur Demand
- Qaddafi Tanks Deprived of Diesel as Ships Shunning Libya: Freight Markets
- Australia Keeps Sugar Forecast as Cyclone Damage Offsets Increased Acreage
- Russia Fails to Win Back Egypt, World’s Biggest Wheat Buyer, After Halt
- Rubber in Tokyo Declines to One-Month Low on Concern Demand Remains Slow
- Rubber Production in India Jumping 22% as Car Sales Fuel Demand for Tires
- Crude Supplies Fall in Survey as Gasoline Output Increases: Energy Markets
- China’s Rare Earth Quotas May Limit Supply to Japan, Europe, Lifton Says
CURRENCIES
EUROPEAN MARKETS
- EUROPE: green across the board, but on low-volume to lower-highs; DAX back above my 7139 TREND line; Spain and Greece below TREND lines
- S&P reaffirms view it would likely treat voluntary debt restructuring for Greece as a default, Moritz Kraemer, head of European sovereign ratings tells Die Welt
ASIAN MARKETS
- ASIA: green across the board, with China (which we just bought) up +1% and India finally stopped making lower-lows, +0.33%.
MIDDLE EAST
Howard Penney
Managing Director