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TODAY’S S&P 500 SET-UP - September 30, 2010

As we look at today’s set up for the S&P 500, the range is 14 points or -0.11% downside to 1140 and 1.12% upside to 1154. Equity futures are trading above fair value as Asian and European markets rally on strong Chinese PMI data. Crude oil remains close to a 7-week high on the prospects for improving growth and on news of political unrest in Ecuador.

Today is a busy day for macro releases with September ISM report, August Personal Income/Spending figures and the final reading to September's UofM Consumer Confidence.

  • Accenture (ACN) sees FY 2011 EPS up 13%-16% vs previous 12%-15%, implying $3.00-$3.08 vs estimate $2.90
  • Gymboree (GYMB) is considering putting itself up for sale, WSJ reports
  • Hewlett-Packard (HPQ) appointed former SAP CEO Leo Apotheker as CEO and president, succeeding Mark Hurd
  • Lawson Software (LWSN) sees 2Q adjusted EPS $0.11-$0.12, vs estimate $0.12
  • MetLife (MET) said interest rate of 2.5% on 10-year Treasuries would reduce 2011 earnings by ~$0.20 per share
  • Teekay Tankers (TNK) plans to offer 8.2m shares

PERFORMANCE

  • One day: Dow (0.44%), S&P (0.31%), Nasdaq (0.33%), Russell 2000 (0.22%)
  • Year-to-date: Dow +3.49%, S&P +2.34%, Nasdaq +4.38%, Russell +8.11%

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: 66 (-233)
  • VOLUME: NYSE - 1283.38 (+26.79%)  
  • SECTOR PERFORMANCE: Long live REFLATION - Only one sector up yesterday XLE
  •  MARKET LEADING/LAGGING STOCKS YESTERDAY: Devry 4.95%, American International +4.41% and Tyson +3.89%/Prudential -4.16,CF Industries -3.88% and JDS -3.35%
  • VIX: - 23.70 +1.94% - YTD PERFORMANCE: (+9.32%)
  • SPX PUT/CALL RATIO: 1.76 from 1.42 +23.82%

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 13.48 -0.203 (-1.481%)
  • 3-MONTH T-BILL YIELD: 0.16%
  • YIELD CURVE: 2.11 from 2.11

COMMODITY/GROWTH EXPECTATION:

  • CRB: 286.86 +0.33%
  • Oil: 79.97 +2.71%
  • COPPER: 365.15 -0.27%
  • GOLD: 1,307.52 +0.18%

CURRENCIES:

  • EURO: 1.3621 +0.07%
  • DOLLAR: 78.72 +0.04% - An up day! Not going to last!

OVERSEAS MARKETS:

Europe

  • FTSE 100: +0.89%; DAX +0.73%; CAC 40 +0.49%
  • Major indices have started the final quarter on a positive note following on from gains seen across Asia helped by strong Chinese PMI data for Sep.
  • Oil & Gas and Basic Materials are pacing gainers as commodity prices gain.
  • European PMI data painted a mixture of manufacturing strength across the region
  • Repsol (REP.SM) announces jv with China's Sinopec (SNP) to develop Repsol's Brazilian assets
  • Eurozone Sep Final Manufacturing PMI revised up 53.7 vs Flash 53.6
  • Germany Sep Final Manufacturing PMI 55.1 vs prelim 55.3
  • UK Sept manufacturing PMI 53.4 vs cons 53.8

Asian

  • Nikkei +0.37%;Shanghai Composite (closed)
  • Strength in commodity prices including a surge in crude oil to the highest in seven weeks helped equities across the region.
  • Strong Chinese PMI helping sentiment.
  • Nikkei up on expectations that the BoJ will take additional steps towards monetary easing at its policy meeting next week.
  • Japan Aug jobless rate 5.1% vs cons 5.2%, core CPI (1%) y/y vs cons (1%); overall Aug CPI (0.9%) y/y
  • China manufacturing Purchasing Managers' Index 53.8 vs prior 51.7

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