THE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP - September 15, 2010

As we look at today’s set up for the S&P 500, the range is 21 points or -1.26% (1,107) downside and 0.62% (1,128) upside.  Equity futures are trading lower flat-to-fair value as recent momentum appears to have run out of steam.  Today's macro highlight includes NY Fed's Empire State Manufacturing Survey for September and August Industrial Production.  Production in the U.S. is estimated to have slowed in August, increasing 0.2% after a 1% in July as automakers scaled back following a surge in output last month.

  • Cohen (COHN) plans to acquire privately held investment firm JVB Financial Holdings LLC for $16.6m in cash and stock
  • Morgan Stanley (MS) was sued by China Development Industrial Bank for fraud to recover losses from an investment tied to residential mortgage-backed securities
  • Neurocrine Biosciences Inc. (NBIX) said a Phase 2 trial of a treatment for major depressive disorder showed no ease of symptoms in patients.
  • NextEra Energy (NEE) said it plans to sell $350m equity units at $50-each.
  • Sonic (SONC) said 4Q same-store system sales fell 6.4%
  • Steel Dynamics (STLD) forecast 3Q EPS 5c-10c vs est. 21c

PERFORMANCE

  • One day: Dow (0.17%), S&P (0.07%), Nasdaq +0.18%, Russell 2000 (0.47%)
  • Month-to-date: Dow +5.11%, S&P +6.84%, Nasdaq +8.31%, Russell +7.83%;
  • Quarter-to-date: Dow +7.70%, S&P +8.77%, Nasdaq +8.56%, Russell +6.52%
  • Year-to-date: Dow +0.94%, S&P +0.54%, Nasdaq +0.91%, Russell +7.44%

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: -226 (-1812)
  • VOLUME: NYSE - 923.76 (-1.22%)  
  • SECTOR PERFORMANCE: Mixed performance - 4 sectors rose and 5 declined - the RECOVERY trade under-performed yesterday.
  • MARKET LEADING/LAGGING STOCKS YESTERDAY: JC Penney +7.43%, Best Buy +6.00% and Corning +4.76%/Cliffs Natural -6.47%, SLM Corp -4.96% and EK -3.99%
  • VIX: 21.56 +1.65% - First up day in the last 4 - YTD PERFORMANCE: (-0.55%)         
  • SPX PUT/CALL RATIO: 1.58 from 0.92 +72%.26

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 15.31 -0.391 (-2.489%)
  •  3-MONTH T-BILL YIELD .15% unchanged
  • YIELD CURVE: 2.18 from 2.21

COMMODITY/GROWTH EXPECTATION:

  • CRB: 280.13 +0.93%
  • Oil: 76.80 -0.51% 
  • COPPER: 346.85 -0.30%
  • GOLD: 1,269 +1.83% - Will 2010 make it 10 years of annual gains?

CURRENCIES:

  • EURO: 1.3010 +1.16% - a two day 2.60% surge in the Euro
  • DOLLAR: 81.080 -1.02% - a two day 1.97% decline in the Buck

OVERSEAS MARKETS:

Europe

  • Markets: FTSE 100: -0.24%; DAX -0.36%; CAC 40 -0.45%
  • Markets are lower ahead of today's macro releases.
  • Strength in Auto, Retail and Insurance names offset by slight weakness across Oil & Gas, Travel and Technology sectors.
  • Astrazeneca fell after the FDA extended its review of the New Drug Application for its anti blood clotting drug ticagrelor
  • UK Jul ILO unemployment rate 7.8% vs cons 7.8%, Jobless claims +2.3K vs cons (3.0K)
  • Eurozone Aug CPI 1.6% y/y vs cons +1.6%

Asia

  • Markets: Nikkei +2.34%; Shanghai Composite (1.34%)
  • Most Asian markets ended mixed.
  • Japan reversed early losses when the Ministry of Finance confirmed that it intervened in the foreign exchange market after the dollar fell below ¥83.
  • China closed weaker following press reports suggesting that China may introduce new measures to cool the property market. Mining stocks across the region were boosted by a record gold price.
  • China's banking regulator may require the nation's "systemically important" banks to boost their capital adequacy ratios to as high as 15 percent by 2012.
Howard Penney
Managing Director

Cartoon of the Day: 'Biggest Tax Cut Ever'

President Donald Trump's economic team unveiled what he called last week, "the biggest tax cut we’ve ever had.” Before you get too excited about that hang on a sec. "Trump Tax Reform ain’t gettin’ done anytime soon," Hedgeye CEO Keith McCullough wrote in today's Early Look.

read more

Neurofinance: The Psychology Behind When To Sell A Bull Market

"Most momentum investors stay invested too long, under-reacting and holding tight after truly bad news finally arrives to break the trend," writes MarketPsych's Richard Peterson.

read more

Energy Stocks: Time to Buy the Dip? | $XLE

What the heck is happening in the Energy sector (XLE)? Energy stocks have trailed the S&P 500 by a whopping 15% in 2017. Before you buy the dip, here's what you need to know.

read more

Cartoon of the Day: Hard-Headed Bears

How's this for "hard data"? So far, 107 of 497 S&P 500 companies have reported aggregate sales and earnings growth of 4.4% and 13.2% respectively.

read more

Premium insight

McCullough [Uncensored]: When People Say ‘Everyone is Bullish, That’s Bulls@#t’

“You wonder why the performance of the hedge fund indices is so horrendous,” says Hedgeye CEO Keith McCullough, “they’re all doing the same thing, after the market moves. You shouldn’t be paid for that.”

read more

SECTOR SPOTLIGHT Replay | Healthcare Analyst Tom Tobin Today at 2:30PM ET

Tune in to this edition of Sector Spotlight with Healthcare analyst Tom Tobin and Healthcare Policy analyst Emily Evans.

read more

Ouchy!! Wall Street Consensus Hit By Epic Short Squeeze

In the latest example of what not to do with your portfolio, we have Wall Street consensus positioning...

read more

Cartoon of the Day: Bulls Leading the People

Investors rejoiced as centrist Emmanuel Macron edged out far-right Marine Le Pen in France's election day voting. European equities were up as much as 4.7% on the news.

read more

McCullough: ‘This Crazy Stat Drives Stock Market Bears Nuts’

If you’re short the stock market today, and your boss asks why is the Nasdaq at an all-time high, here’s the only honest answer: So far, Nasdaq company earnings are up 46% year-over-year.

read more

Who's Right? The Stock Market or the Bond Market?

"As I see it, bonds look like they have further to fall, while stocks look tenuous at these levels," writes Peter Atwater, founder of Financial Insyghts.

read more

Poll of the Day: If You Could Have Lunch with One Fed Chair...

What do you think? Cast your vote. Let us know.

read more

Are Millennials Actually Lazy, Narcissists? An Interview with Neil Howe (Part 2)

An interview with Neil Howe on why Boomers and Xers get it all wrong.

read more