TODAY’S S&P 500 SET-UP - July 13, 2011
Managing risk in a European vacuum won't work - the world is much bigger than that. China, Copper, and UST yields matter. As we look at today’s set up for the S&P 500, the range is 29 points or -0.96% downside to 1301 and 1.25% upside to 1330.
SECTOR AND GLOBAL PERFORMANCE
EQUITY SENTIMENT:
- ADVANCE/DECLINE LINE: -482 (+1686)
- VOLUME: NYSE 924.46 (+11.46%)
- VIX: 19.87 +8.05 YTD PERFORMANCE: +11.97%
- SPX PUT/CALL RATIO: 2.24 from 2.88 (-22.28%)
CREDIT/ECONOMIC MARKET LOOK:
- TED SPREAD: 22.36
- 3-MONTH T-BILL YIELD: 0.02%
- 10-Year: 2.92 from 2.94
- YIELD CURVE: 2.55 from 2.57
MACRO DATA POINTS:
- MBA mortgage applications index fell 5.1% week ended July 8; Refis down 6.2%, 4th declining week; Purchases declined 2.6%; rose last week; Avg. 30-yr fixed rate 4.55% vs prior week’s 4.69%, biggest drop in 3 months
- 8:30 a.m.: Import price index M/m, est. (0.6%), prior 0.2%
- 9:10 a.m.: Fed’s Rosengren speaks on economic outlook
- 10 a.m.: Bernanke speaks to House on semi-annual economic outlook
- 10:30 a.m.: DoE inventories
- 11:30 a.m.: U.S. to sell $5b 14-day cash management bills
- 1 p.m.: U.S. to sell $21b in 10-yr notes reopening
- 1:20 p.m.: Fed’s Fisher speaks on economy in Dallas
- 2 p.m.: Monthly budget statement
WHAT TO WATCH:
- U.K. coalition govt. will today side with Labour Party in calling on News Corp. to withdraw bid for control of BSkyB; Rupert Murdoch now facing at least six investigations
- Senate Republican leader Mitch McConnell proposed yesterday granting President Obama unilateral power to raise debt ceiling as “last-choice option” to avoid default
- Secretary of State Clinton meets with Russian Foreign Minister Sergei Lavrov in Washington
- Irish PM says it is time for Europe to respond comprehensively to debt crisis adding that there is no point having a leaders' meeting on Friday that doesn't come up with a conclusive solution. Ireland's problem is with Europe he said
- Bullish sentiment increases to 44.1% from 40.9% in the latest US Investor's Intelligence poll; Bearish sentiment decreases to 22.6% from 24.9%
COMMODITY/GROWTH EXPECTATION
COMMODITY HEADLINES FROM BLOOMBERG:
- Seven-Month Wait for Aluminum From Detroit Drives LME to Review Warehouses
- Corn Imports by China Seen Doubling to Cool Fastest Inflation Since 2008
- Copper Gains for a Second Day as Chinese Economic Growth Exceeds Estimates
- Gold Climbs, Nears Record as Europe’s Sovereign-Debt Crisis Fuels Demand
- Oil Trades Near Highest in Three Days in New York on China Economic Growth
- Corn Drops as Shortage Concern Ebbs; Rice Reaches Highest Price Since 2008
- Gold Investment in India Seen Extending Advance to Record as Incomes Surge
- Coffee Rises on Concern Vietnamese Supplies May Be Limited; Cocoa Gains
- Copper, Aluminum Production in China Gain to Records in June, Bureau Says
- Aluminum’s Two-Year Advance Is ‘Intact’ Above $2,300: Technical Analysis
- Gecamines’ Undisclosed Sale of Congo Copper Mines May Threaten Share Offer
- Fuel-Oil Loss in Asia Set to Double as Supply Surge Looms: Energy Markets
- Sri Lanka Seeking to Catch Singapore With Help From China: Freight Markets
CURRENCIES
EUROPEAN MARKETS
- EUROPE: important recovery by the DAX- TREND line support (7136) -see if it holds; Italy was immediate-term TRADE oversold yesterday; here's the bounce
ASIAN MARKETS
- ASIA: outstanding GDP print by the Chinese at +9.5% (beats our number and we are the bulls); China up +1.5% on news > 2732 TRADE breakout line
MIDDLE EAST
Howard Penney
Managing Director