TODAY’S S&P 500 SET-UP - October 11, 2011
Levels matter and ASIA looks more bearish in the majors (HK, Nikkei, KOSPI, etc) than Germany, France, and Italy do right now – that’s telling you something about Global Growth that is ringing in the -1.1% and -2.7% selloffs in oil/copper this morning that should be respected. Every stock market in Asia and every major commodity has failed at TRADE resistance.
As we look at today’s set up for the S&P 500, the range is 31 points or -2.23% downside to 1167 and 0.26% upside to 1198.
SECTOR AND GLOBAL PERFORMANCE
EQUITY SENTIMENT:
- ADVANCE/DECLINE LINE: 2530 (-1218)
- VOLUME: NYSE 888.12 (-22%)
- VIX: 33.02 -8.8% YTD PERFORMANCE: +86.03%
- SPX PUT/CALL RATIO: 2.24 from 2.54 (-11.80%)
CREDIT/ECONOMIC MARKET LOOK:
From KM - US TREASURIES: very interesting action on the short end of the curve continues to develop w/ 2-year yields having broken out above my TRADE line of 0.21% and now testing my TREND line up at 0.30%. I expect short-term yields to back off here, but the short end of the curve should continue to pressure the Gold price (which failed again at $1678 TREND resistance)
- TED SPREAD: 38.91
- 3-MONTH T-BILL YIELD: 0.01%
- 10-Year: 2.16 from 2.08
- YIELD CURVE: 1.85 from 1.79
MACRO DATA POINTS (Bloomberg Estimates):
- 7:30 a.m.: NFIB Small Business, est. 88.8, prior 88.1
- 10:00 a.m: IBD/TIPP Economic Optimism, est. 39.4, prior 39.9
- 11:30 a.m: U.S. to sell $29b 3-mo., $27b 6-mo. bills
- 1:00 p.m.: U.S. to sell $32b 3-yr notes
- 2:30 p.m.: Treasury Secretary Timothy Geithner participates in Financial Stability Oversight Council meeting
WHAT TO WATCH:
- FDIC to release Volcker Rule on proprietary trading
- Chrysler talks with UAW continue
- NBA cancels first two weeks of season
- Hewlett-Packard said to decide future of WebOS, Palm this week, AppleInsider
- FDA staff issues recommendation on Cook’s medicated heart stent ahead of 10/13 meeting; watch Medtronic, Baxter
- Citigroup said to halt soliciting some Japanese retail business as it awaits government investigation outcome
- Bloomberg/Washington Post Republican Presidential Debate at Dartmouth College, Hanover, N.H., 8 p.m.
- No IPOs expeted to price today
COMMODITY/GROWTH EXPECTATION
MOST POPULAR COMMODITY HEADLINES FROM BLOOMBERG:
- Soy Slump Ending as Record Demand Overwhelms Farms: Commodities
- Oil Drops From Two-Week High in New York Before Europe Debt Vote
- Copper Declines Most in a Week on Concern About Chinese Demand
- Timah to Resume Refined-Tin Exports After Price Rebounds
- Corn Falls as U.S. May Raise Supply Estimate; Wheat Advances
- Gold Declines in London as Commodities Fall Before Slovakia Vote
- Sugar Declines in New York as Slower Growth May Curb Demand
- Rio Says Greece Risk Overdone as China Overcomes ‘Wall of Worry’
- U.S. Refinery Runs at Four-Month Low in Survey: Energy Markets
- Soy Sinks More Than Oil Deepens Bond Sell-Off: Argentina Credit
- Economists Call for Crop-Trading Limits to Curb Volatility
- Most Tankers Idled Since ‘80s Won’t Buoy Charter Rates: Freight
- Alcoa’s Earnings Recovery Slows on Aluminum Price ‘Headwind’
- COMMODITIES DAYBOOK: Gold Declines, Oil Falls From 2-Week High
- Ship Futures Jump to Year’s High as China Surge Lifts Charters
- Aluminum Demand to Grow as Much as 10% in 5 Years, Novelis Says
CURRENCIES
EURO – yesterday KM put up the $1.36 line in the sand and said short the Euro with “impunity” there.
EUROPEAN MARKETS
ASIAN MARKETS
MIDDLE EAST
Howard Penney
Managing Director
