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TODAY’S S&P 500 SET-UP - October 11, 2010

As we look at today’s set up for the S&P 500, the range is 18 points or -1.21% downside to 1151 and 0.33% upside to 1169. Equity futures are trading above fair value in tandem with gains seen overnight across Asia and Europe although trading thus far has been quiet. Crude oil has risen on a weakening dollar as expectations of further QE gather pace in the wake of Friday's disappointing jobs report

  • Barron’s - Brinker International (EAT) may climb to $0.42 per sharein next year on new kitchens, menus
  • Barron’s - CIT Group (CIT) may rise >15% during next year and may be a target for a “capital-starved” bank.
  • Cypress Bioscience (CYPB) agreed to sell its diagnostic business to Exagen Diagnostics
  • J.C. Penney (JCP): Vornado Realty Trust (VNO) acquired ~9.9% JCP stock
  • Barron’s - Regal Cinemas (RGC) and Cinemark (CNK) are “cheap” on a free- cash flow basis, Barron’s said.
  • Barron’s - SuccessFactors (SFSF) may fall on stronger competition, growth.
  • Targa Resources Partners (NGLS) boosted Q dividend to 53.75c a unit from 52.75c, matches forecast

 PERFORMANCE

  • One day: Dow 0.53%, S&P 0.61%, Nasdaq +0.77%, Russell 2000 1.4%
  • Year-to-date: Dow +5.52%, S&P +4.46%, Nasdaq +5.85%, Russell +10.94%

 EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: +1467 (+1707)
  • VOLUME: NYSE - 943.44 (+3.63%)  
  • SECTOR PERFORMANCE: Every sector rose on Friday - Reflation, Reflation and Reflation.
  •  MARKET LEADING/LAGGING STOCKS YESTERDAY: CF Industries +11.42%, Gannett +8.02% and H&R Block +7.47%/Tyson -7.74%, Adobe -5.93% and Owens Ill -4.08%.
  • VIX: 20.71 -3.94% - YTD PERFORMANCE: (-4.47%)
  • SPX PUT/CALL RATIO: 1.69 from 1.38, +22.06%

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: - 17.45
  • 3-MONTH T-BILL YIELD: 0.12% -.01%
  • YIELD CURVE: 2.06 from 2.05

COMMODITY/GROWTH EXPECTATION:

  • CRB: 295.11 +2.72% - up for the last 7 weeks
  • Oil: 82.66 +1.21% up 3 weeks in a row
  • COPPER: 377.45 +2.58% - up 7 of the last 8 weeks
  • GOLD: 1,343.85 +0.69% up 5 of last 6 weeks

CURRENCIES:

  • EURO: 1.3939 +0.38% up 5 of the last 6 weeks
  • DOLLAR: 77.325 -0.08 down 5 of the last 6 weeks

OVERSEAS MARKETS:

Europe

  • European markets edged higher, though activity is subdued with little major economic or corporate releases and US bond markets are closed today for a public holiday.
  • Major European indices gave up modest opening advances, drifting back to trade little changed before edging higher and currently trade just below the session’s earlier highs.
  • The majority of European sectors trade higher led by the technology and auto sectors. US futures trade higher
  • France Aug Industrial Production +0.0% m/m vs consensus +0.3% and prior revised +0.8%
  • France Aug Manufacturing Output +0.0% m/m vs prior +1.2%

Asian

  • Nikkei (closed); Shanghai Composite +2.50%
  • The Hang Seng saw a two-year high as expectations of further Fed easing boosted resource stocks, while Sydney and Shanghai saw five-month highs.
  • Asian markets rose today after Friday's US jobs report raised expectations that the Fed will announce new measures aimed at propping up the weak economy and the dollar continued its deterioration.
  • The dollar hit a new 15-year low against the yen after last week hitting an all-time low against the Australian dollar since the Australian dollar was allowed to float in 1983 Japanese markets are closed today
  • Chinese officials over the weekend rejected calls for a significantly stronger renminbi. China’s unit hit a new post-2005 revaluation high vs the dollar of Rmb 6.6645
  • China raises deposit reserve ratio for six big banks by 50 bps 
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