THE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP - September 23, 2010

As we look at today’s set up for the S&P 500, the range is 19 points or -0.64% downside to 1127 and 1.03% upside to 1146. Equity futures are trading lower tracking a sell off among European indices. Concerns resurface over the state of the European economies. Banking stocks lead the sell off as Bank of America Merrill Lynch lowers its estimates for US investment banks. Also caution prevails ahead of the jobless claims. Other macro highlights include August Existing Home Sales.

  • Bed Bath & Beyond (BBBY) raised FY 2011 EPS growth forecast to 20% from 15%
  • BioMed Realty Trust (BMR) is offering 13.5m shares to fund acquisitions and repay debt
  • DineEquity (DIN) reported domestic comp sales up 2.7% 3Q through Sept. 19
  • Edwards Lifesciences (EW): Sapien valve prevented more deaths than standard treatment, according to study
  • Red Hat (RHT) reported 2Q rev. $219.8m vs estimate $211.5m
  • Steelcase (SCS) forecast 3Q rev. $625m-$650m vs estimate $627.7m
  • Tessco Technologies (TESS): Discovery Group offered to buy remaining shares outstanding at 31% premium to September 21st close
  • Vertex Pharmaceuticals (VRTX) plans to sell $375m senior convertible notes

PERFORMANCE

  • One day performance: Dow (0.20%), S&P (0.48%), Nasdaq (0.63%), Russell 2000 (1.20%)
  • Month-to-date: Dow +7.24%, S&P +8.10%, Nasdaq +10.43%, Russell +9.08%
  • Quarter-to-date: Dow +9.88%, S&P +10.05%, Nasdaq +10.68%, Russell +7.75%
  • Year-to-date: Dow +2.98%, S&P +1.72%, Nasdaq +2.88%, Russell +5.03%

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: -764 (+75)
  • VOLUME: NYSE - 954.65 (-8.91%)  
  • SECTOR PERFORMANCE: 4 sectors up and 5 down.  While another meaningful pullback in the dollar offered some semblance of support for the XLB, it failed to underpin the broader risk trade amid heightened concerns about the potential global economic backlash surrounding a competitive currency devaluation push.
  • MARKET LEADING/LAGGING STOCKS YESTERDAY: Carmax +8.46%, Sears +5.31% and Alcoa +4.74%/Adobe -19.23%, New York Times -6.52% and Gannett -6.15%
  • VIX: - 22.51 +0.72%  YTD PERFORMANCE: (+3.83%)          
  • SPX PUT/CALL RATIO:- 2.14 from 2.01 +6.33%

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 14.03 0.304 (2.218%)
  •  3-MONTH T-BILL YIELD: 0.16% -0.01%
  • YIELD CURVE: 2.12 from 2.18

COMMODITY/GROWTH EXPECTATION:

  • CRB: 278.89 +0.19%
  • Oil: 74.71 -0.35% - oil continues to flash bearish intermediate term TREND in our model w/ TREND line resist = $76.29; bodes bearish for US economic growth.
  • COPPER: 356.50 +2.41%  
  • GOLD: 1,289 +1.23%

CURRENCIES:

  • EURO: 1.3366 +1.81%
  • DOLLAR: 79.83 -0.76% - US Dollar getting annihilated; breaking to lower-lows like it did in April and August when Dollar Down = bad (as opposed to reflation)

OVERSEAS MARKETS:

Europe

  • UK may be close to introducing additional quantitative easing measures.
  • Disappointing PMIs from across the Eurozone exacerbated the declines.
  • Financial, mining and construction sectors bore the brunt of the limited selling pressure although turnover remains light
  • The Irish Examiner reports, Finance Minister Brian Lenihan, has given the strongest indication yet that the riskiest lenders to Anglo Irish Bank will soon be told they will not get all their money back.
  • Astrazeneca announced positive phase II results for Fostamatinib (Rheumatoid arthritis), sees phase III beginning soon
  • French Economy Minister said that a capital surcharge was not a "panacea" for addressing the risk of systemically important banks, and she favored resolution mechanisms and tighter regulation.
  • Eurozone Sep Advanced Services PMI 53.6 vs cons 55.5, Manufacturing PMI 53.60 vs cons 54.50
  • Germany Sep Preliminary Services PMI 54.6 vs cons 57.0, Manufacturing PMI 55.3 vs cons 57.6
  • France Sep Preliminary Manufacturing PMI 55.4 vs cons 55; Services PMI 58.8 vs cons 60.0

 

Asia

  • In quiet trading with the major bourses across the region closed, Asian markets did not move much today.
  • Australia finished barely higher as the effect of stronger miners marginally outweighed the effect of weaker banks.
  • Taiwan finished flat.
  • South Korea was closed for Chusok.
  • China is closed through 24-Sep for Mid-Autumn Festival.
  • Hong Kong was closed for the day after the Mid-Autumn Festival and will re-open tomorrow.
  • Japan was closed for the Autumnal Equinox.
  • The yen is trading at 84.46 to the US dollar. 
 
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


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