TODAY’S S&P 500 SET-UP - August 16, 2011
If you didn’t know it now you do - GLOBAL GROWTH IS SLOWING. As we look at today’s set up for the S&P 500, the range is 159 points or -8.84% downside to 1098 and 4.36% upside to 1257.
SECTOR AND GLOBAL PERFORMANCE
EQUITY SENTIMENT:
- ADVANCE/DECLINE LINE: 2548 (+1698)
- VOLUME: NYSE 1105.36 (-12.00%)
- VIX: 31.87 -12.35% YTD PERFORMANCE: +79.55%
- SPX PUT/CALL RATIO: 2.10 from 1.79 (+17.52%)
CREDIT/ECONOMIC MARKET LOOK:
- TED SPREAD: 27.14
- 3-MONTH T-BILL YIELD: 0.02%
- 10-Year: 2.29 from 2.24
- YIELD CURVE: 2.10 from 2.04
MACRO DATA POINTS (Bloomberg Estimates):
- 8:30 a.m.: Import Price Index, est. (-0.1%), prior (-0.5%)
- 8:30 a.m.: Housing starts, est. down 4.6% to 600k, prior 629k
- 8:30 a.m.: Building Permits, est. down 1.9% to 605k, prior 617k
- 9:15 a.m.: Industrial Production, est. 0.50%, prior 0.20%
- 9:15 a.m.: Capacity Utilization, est. 76.9%, prior 76.7%
- 11:30 a.m.: U.S. to sell 4-wk bills
- 4:30 p.m.: API Inventories
WHAT TO WATCH:
- WSJ is unconvinced of wisdom of Google's purchase of Motorola Mobility
- Carlyle Group said to be in exclusive talks to buy Pharmaceutical Product Development
- Nokia rises for second day after Google/MMI deal amid buyout speculation and as analysts say deal may benefit Windows Phone OS; J.P. Morgan values Nokia’s patent portfolio at EU5.4b
- German Chancellor Angela Merkel meets with French President Nicolas Sarkozy; press briefing at 12:30 p.m. NY time
- IMF’s Lagarde, writing in the FT, urges policymakers to include measures to support economic growth in the short term as they implement fiscal tightening plans under market pressure
COMMODITY/GROWTH EXPECTATION
- COPPER – the Doctor gets Singapore + Germany = bad; Copper leading to the downside this week is a very bearish signal for global growth; Copper’s TAIL line of support broke last week (4.10/lb) – no support to 3.81/lb
MOST POPULAR COMMODITY HEADLINES FROM BLOOMBERG:
- China Set to Achieve ‘Soft Landing,’ Conference Board Says
- Sino-Forest Says Investigators Won’t Report Until Year End
- Bananas in Cooled Ingersoll Trucks Help India Cut Food Waste
- Gold Gains a Second Day in London on Concerns Growth Is Slowing
- Soros, Mindich Cut SPDR Gold Share Holdings in 2nd Quarter
- Oil Supplies Decline to Five-Month Low in Survey: Energy Markets
- Oil Falls on Speculation Slowing Economy Will Curb Fuel Demand
- Sugar Climbing 6% as Brazil Crop Drops Amid Importer Demand
- Copper Drops on Speculation China, U.S. Slowdown to Hurt Demand
- Western Europe Faces Higher Construction Costs on Commodities
- Commodities May Be Poised to Decline 9.7%: Technical Analysis
- Pemex Bonds Trading Safest to Petrobras in Year: Mexico Credit
- Uranium Spot Prices Fall as Vacation Season Cuts Demand, Ux Says
- Corn Drops as Rally to 2-Month High Slows Demand; Soybeans Fall
- Copper Extends Drop After Report on Germany’s GDP: LME Preview
- Oil Declines as Investors Speculate Global Economy Is Slowing
CURRENCIES
EUROPEAN MARKETS
- EUROPE: crash continues Germany down hard on a real big slowdown in; FTSE down -1.2% on stagflation.
- GERMANY – when the best of a bad bunch is crashing, you get paid to pay attention; Germany’s Q2 GDP growth was cut in half sequentially to 2.8% vs 5.2% in Q1; German stocks down another 2% and crashing (down -22% since May)
ASIAN MARKETS
- ASIA: no follow through; watch Singapore who leads in the East, down hard -1.5% overnight and signaling continues Asian growth slowdown
- SINGAPORE –Singapore advises China and the rest of the region on upside/downside scenarios and now Singapore stocks are leading the East to the downside (down another -1.5% overnight)
MIDDLE EAST
Howard Penney
Managing Director
