TODAY’S S&P 500 SET-UP - October 14, 2010
As we look at today’s set up for the S&P 500, the range is 29 points or -2% downside to 1155 and 0.5% upside to 1184. Equity futures are trading above fair value but below earlier peaks as the market attempts to build upon a four day long rally. The dollar remains under pressure on QE2 speculation and after Singapore widened its currency trading band to combat inflation. September PPI and weekly jobless claims are the main macro focus, while quarterly earnings from Google after the close.
- Apollo (APOL) withdrew its financial forecast for 2011, citing fewer new students and regulatory scrutiny.
- Cash America (CSH) 3Q EPS beat est.
- Constellation Energy (CEG). EDF may develop new U.S. nuclear plant on its own following a dispute with Constellation.
- Everest Re (RE) sees 3Q adj. EPS below ests. Due to losses from catastrophe.
- Lennar (LEN) had its credit rating cut to B+ from BB- by S&P.
- Universal Forest Products Inc. (UFPI) 3Q EPS ex. items missed ests.
- Yahoo! (YHOO). Yahoo! working with Goldman Sachs to help defend against possible takeover approaches, said three people familiar with the matter. AOL has talked with private-equity funds including Silver Lake about a possible bid, two people familiar with the matter said.
- ZAG (ZAGG) lifted 2010 rev. growth forecast to 70% from 30%.
- One day: Dow +0.69%, S&P +0.71%, Nasdaq 0.96%, Russell 2000 +1.50%
- Month/Quarter-to-date: Dow +2.86%, S&P +3.23%, Nasdaq +3.07%, Russell +4.49%
- Year-to-date: Dow +6.41%, S&P +5.65%, Nasdaq +7.58%, Russell +12.96%
- SECTOR PERFORMANCE: Industrials +1.65%, Materials +1.60%, Energy +1.22%, Tech +0.81%, Consumer Staples +0.85%, Healthcare +0.71%, Utilities +0.38%,Consumer Disc +0.15%, Financials 0.09%.
- ADVANCE/DECLINE LINE: +1532 (+1175) - breadth expanded for the past three days
- VOLUME: NYSE - 1270.40 (+37.62%) - accelerating for the past two days
- MARKET LEADING/LAGGING STOCKS YESTERDAY: Williams Cos +9.79%, Yahoo +5.54% and Monsanto +4.67%/Marshall & Isley -4.20%, Intuitive Surgical -3.86% and Analog Devices -3.50%.
- VIX: - 19.07 +0.74%% - YTD PERFORMANCE - (-12.04%)
- SPX PUT/CALL RATIO: - 1.27 from 1.79 -29.19%%
CREDIT/ECONOMIC MARKET LOOK:
- TED SPREAD - 16.43 -0.304 (-1.818%)
- 3-MONTH T-BILL YIELD 0.13%
- YIELD CURVE - 2.09 from 2.07
- CRB: 299.74 +0.64% - up 6 of the last 8 days
- Oil: 83.01 +1.64% - BULLISH
- COPPER: 382.05 +0.82% - OVERBOUGHT - a 27 month high
- GOLD: 1,369.85 +1.67% - BULLISH
- EURO: 1.3949 +0.59% - BULLISH
- DOLLAR: 77.071 -0.38% - BEARISH
- European Markets: FTSE 100: +0.02%; DAX: +0.51%; CAC 40: (0.01%)
- European markets extended yesterday's gains following Asian markets higher with major indices attaining 3-week highs.
- Mining shares started on a strong note as metal prices traded higher helped by a weaker US dollar with gold touching a record high, however market gains were tempered by mixed corporate results as heavy-weights Roche and LVMH disappointed.
- Sovereign bonds eased as equities moved higher and ahead of supply from Italy.
- Asian Markets: Nikkei +1.9%; Hang Seng +1.7%; Shanghai Composite +0.6%
- Asian markets followed Wall Street up today.
- Resource shares led Japan up; all 33 sectors rose, but major banking stocks lagged the market in light of JPMorgan Chase’s (JPM) doing the same yesterday.
- Yahoo Japan and Alibaba.com rose 6% and 1%, respectively, on talk of a buyout of Yahoo (YHOO).
- Chinese banks and resource stocks led Hong Kong higher.
- South Korea went up after the central bank kept interest rates unchanged; roughly half of economists had expected a 25-bp increase.
- Tech stocks rose after Intel (INTC) beat expectations.
- Early gains were pared, but banks and property stocks were strong in China as the central bank injected money into the country’s money market.
- Singapore lagged the region on news that the city-state’s Q3 GDP fell (20%) q/q vs consensus (18%). The Monetary Authority of Singapore also surprised the market by tightening policy, saying it will slightly increase the slope of and widen the trading band of the Singapore dollar.