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TODAY’S S&P 500 SET-UP - September 17, 2010

As we look at today’s set up for the S&P 500, the range is 23 points or -1.21% downside to 1111 and 0.83% upside to 1134.  Equity futures are trading above fair value as markets respond positively to earnings and guidance from RIMM and ORCL.

Today's macro focus will center on August CPI and the Michigan Consumer Sentiment survey.

  • Alkermes’ (ALKS) drug Vivitrol should be cleared as a treatment for opiate addition, outside advisers to the U.S. FDA said.
  • Arena Pharmaceuticals (ARNA) failed to win a U.S. panel’s backing to sell lorcaserin, the experimental diet pill that would be the company’s first drug.
  • Boeing (BA) said it would boost the production rate of 737s to 38/mo from 35/mo
  • Massey Energy (MEE) forecast a 3Q operating loss and 2010 operating results at the low end of its projections.
  • Oracle (ORCL) reported 1Q EPS that beat estimates.
  • Research In Motion (RIMM) reported 2Q revenue and profit that beat estimates.
  • Texas Instruments (TXN) boosted its dividend and said it plans to buy an additional $7.5b of its stock.

PERFORMANCE

  • One day performance: Dow +0.21%, S&P (0.04%), Nasdaq +0.08%, Russell (0.72%)
  • Month-to-date: Dow +5.79%, S&P +7.18%, Nasdaq +8.95%, Russell +7.6%
  • Quarter-to-date: Dow +8.4%, S&P +9.12%, Nasdaq +9.2%, Russell +6.29%
  • Year-to-date: Dow +1.6%, S&P +0.86%, Nasdaq +1.5%, Russell +3.58%

 EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: -485 (-659)
  • VOLUME: NYSE - 906.14 (+0.55%)  
  • SECTOR PERFORMANCE: Mixed to poor performance - 3 sectors rose and 5 declined - Tech and Materials sectors outperformed; Financials and Energy led the decline. Economic data sent a mixed message, and limited corporate news flow on the day.
  • MARKET LEADING/LAGGING STOCKS YESTERDAY: Ford +4.80%, Gamestop +4.36% and Expedia +3.86%/Helmerich -4.49%, Pulte -3.85% and Fed Ex -3.75%
  • VIX: 21.72 -1.72% - YTD PERFORMANCE: (+0.18%)            
  • SPX PUT/CALL RATIO: 1.03 from 1.53 -32.66%  

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 14.94 0.812 (5.746%)
  •  3-MONTH T-BILL YIELD: 0.16% +0.01%
  • YIELD CURVE: 2.29 from 2.24

COMMODITY/GROWTH EXPECTATION:

  • CRB: 278.69 -0.13%
  • Oil: 74.57 -1.91% 
  • COPPER: 349.35 +0.78%
  • GOLD: 1,272 +0.41%

CURRENCIES:

  • EURO: 1.3074 +0.56%
  • DOLLAR: 81.241 -0.31% 

OVERSEAS MARKETS:

Europe

  • European Markets: FTSE 100: +1.00%; DAX: +0.88%; CAC 40: +1.29%
  • European markets opened higher and subsequently extended gains to currently trade close to session highs.
  • M&A activity again dominates with Johnson & Johnson (JNJ) negotiating to buy Crucell (CRXL.NA).
  • All industry groups trade higher with miners and technology shares amongst leading gainers. Defensive groups dominate the laggards. Mining shares were buoyed by higher metal prices whilst technology shares received a lift from Oracle (ORCL) results and guidance overnight, ORCL trading up over +4% in Germany.
  • A generally weaker US dollar also benefitted commodity prices that saw gold trade at a record high $1,280/oz.

Asia

  • Asian Markets: Nikkei +1.2%; Shanghai Composite (0.15%)
  • Most Asian markets followed Wall Street up today, despite some hesitation before pending holidays in Japan and South Korea.
  • Japan rose on a weaker yen
  • In South Korea, LG Electronics rose 5% after CEO Yong Nam resigned to take responsibility for poor management, to be replaced by Koo Bon Joon.
  • Banks rose slightly in Australia on successful bond issue by Asciano.
  • Taiwan rose when Beijing approved four banks including Chang Hwa Bank to open branches in China.
  • Declines in financials and heavyweights outweighed technical buying in individual stocks, taking China to a slight loss even though the central bank said it would keep monetary policy loose. 
Howard Penney
Managing Director

THE DAILY OUTLOOK - levels and trends

 

THE DAILY OUTLOOK - S P

 

THE DAILY OUTLOOK - VIX

 

THE DAILY OUTLOOK - DOLLAR

 

THE DAILY OUTLOOK - OIL

 

THE DAILY OUTLOOK - GOLD

 

THE DAILY OUTLOOK - COPPER