THE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP - October 4, 2010

As we look at today’s set up for the S&P 500, the range is 14 points or -0.46% downside to 1141 and 0.76% upside to 1155. Equity futures are trading below fair value in a subdued start to trading in a week which is likely to be dominated by the start of the Q3 earnings season, Friday's employment data and speculation surrounding the timing of any fresh QE.  Today's macro headlines include: August Pending Home sales and Factory Orders.

  • AT&T (T) agreed to pay $300m to the IRS in 4Q to settle disagreement over 2008 tax return
  • Dynamex (DDMX) agreed to be bought for $21.25 per share by Greenbriar Equity Group; 58% premium to average close over past 30 days
  • Icad (ICAD) filed to sell as much as $75m in common stock
  • Iridium Communications (IRDM) settled lawsuit filed by Motorola in February 2010; terms not disclosed
  • Barron’s - JPMorgan (JPM) may boost dividend next year and rise as much as 45% during next two years
  • Sunday Telegraph - New York Times (NYT) plans to pay back $250m loan from Carlos Slim three years ahead of schedule
  • Prudential Financial (PRU) got a term loan of as much as $3b to finance purchase of AIG Japan units
  • Barron’s - Snap-On (SNA) may rise as overseas automobile-repair growth boosts sales
  • Barron’s - United Technologies (UTX) may rise as much as 20% during next year on demand for elevators and escalators, improved profit at carrier air-conditioning unit
  • WD-40 (WDFC US) boosted Q dividend by 8% to $0.27 per share
  • Barron’s - World Wrestling Entertainment (WWE) may decline as fans increasingly turn to mixed martial-arts rival Ultimate Fighting Championships instead

PERFORMANCE

  • One day: Dow +0.39%, S&P +0.44%, Nasdaq +0.09%, Russell +0.47%
  • Month/Quarter-to-date: Dow +0.39%, S&P +0.44%, Nasdaq +0.09%, Russell +0.47%.
  • Year-to-date: Dow +3.85%, S&P +2.79%, Nasdaq +4.48%, Russell +8.62%

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: 1113 (+1047)
  • VOLUME: NYSE - 1072.22 (-16.45%)  
  • SECTOR PERFORMANCE: Outsized strength in energy, materials and financials; tech lags as the space missed out on the afternoon rally.
  •  MARKET LEADING/LOOSING STOCKS YESTERDAY: Citi 4.87%, Metro PCS +4.49% and Freeport MC +3.38%/Tenet -4.03,Abercrombie -3.99% and Sears -3.35%
  • VIX: 22.50 -5.06% - YTD PERFORMANCE: (+3.87%)
  • SPX PUT/CALL RATIO: 1.32 from 1.72, -24.96%

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 13.75 -0.304 (-2.166%)
  • 3-MONTH T-BILL YIELD: 0.16%
  • YIELD CURVE: 2.12 from 2.11

COMMODITY/GROWTH EXPECTATION:

  • CRB: 285.69 -0.41% - first down day in seven
  • Oil: 81.58 +2.01% - up 6.65% last week
  • COPPER: 369.05 +1.07%
  • GOLD: 1,315.55 +0.61%

CURRENCIES:

  • EURO: 1.3791, +1.25%
  • DOLLAR: 78.08 -0.80% - down 1.65% last week

OVERSEAS MARKETS:

Europe

  • European markets: FTSE 100: (0.70%); DAX (1.20%); CAC 40 (1.28%)
  • Major indices are weaker in a quiet start to the trading week with all sectors showing losses although Autos are underperforming (2.4%) amid speculation that improving economic data will reduce the need for governments to stimulate growth
  • Sanofi goes hostile in bid for Genzyme
  • Chinese Premier has restated that they do not intend to reduce their holdings of European government bonds
  • Eurozone Aug PPI +3.6% y/y vs consensus +3.6%

Asia

  • Asian markets: Nikkei (0.25%); Shanghai Composite (closed)
  • Markets were mixed in a follow-through to Friday's US data, but volumes remain light on account of the holiday in China.
  • The Nikkei initially traded lower, but finished the morning session higher as the euro strengthened vs the yen before giving back some earlier gains during the afternoon session.
  • The Hang Seng, which was closed Friday, saw resource stocks advance with higher commodity prices and property stocks higher after strong weekend sales 

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