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TODAY’S S&P 500 SET-UP - October 18, 2010

As we look at today’s set up for the S&P 500, the range is 14 points or -0.78% downside to 1167 and 0.41% upside to 1181. Equity futures are trading below fair value as investors continue to digest Friday's speech by Fed Chairman Bernanke which appeared to have disappointed investors who were looking for specifics on any further QE. Overnight moves in Asia and Europe have been muted with the dollar bouncing off lows and sending commodity prices lower. Looking ahead to today, earnings from Citi before the open and Apple after the close will be in focus, while the September Industrial Production numbers are the main MACRO data points.

  • Allergan (AGN) said the U.S. FDA approved Botox for the preventive treatment of chronic migraines in adults
  • Daimler (DDAIF) shares may touch $75 or higher as more Chinese buy Mercedes cars and demand gains for its medium- and heavy-duty trucks, Barron’s reported, citing analysts and investors.
  • Lulu Athletica (LULU US) may fall as much as 30% as sales growth slows, Barron’s reported, citing analysts
  • Pioneer Natural Resources (PXD) expects to record $127.6m in 3Q derivative gains
  • Supertex (SUPX) said 2Q sales will be no more than $22.5m, lower than the average analyst estimate of $25.1m
  • WD-40 (WDFC) posted 4Q EPS 41c vs est. 38c
  • Wilmington Trust (WL) may be a takeover target, Barron’s reported, citing analysts

 PERFORMANCE

  • One day: Dow (0.29%), S&P +0.20%, Nasdaq +1.37%, Russell (0.22%)
  • Month/Quarter-to-date: Dow +2.55%, S&P +3.07%, Nasdaq +4.23%, Russell +4%
  • Year-to-date: Dow +6.09%, S&P +5.48%, Nasdaq +8.8%, Russell +12.44%
  • Sector Performance: Technology +1.69%, Consumer Discretionary +0.73%, Healthcare +0.42%, Utilities +0.30%, Materials +0.29%, Energy +0.27%, Consumer Staples +0.25%, Industrials (0.62%), and Financials (1.71%).

 EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: -629 (-9.97%)
  • VOLUME: NYSE - 1416.33 (-27.52%)
  • MARKET LEADING/LAGGING STOCKS YESTERDAY: Google +11.19%, Western Digital +8.14% and Amazon +5.86%/Gannett -8.80%, First Horizon -7.90% and Capital One -7.62%.
  • VIX:  19.03 -4.28% - YTD PERFORMANCE: (-12.22%)
  • SPX PUT/CALL RATIO: 2.85 from 1.49 +91.58%

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 15.32 -0.101 (-0.658%)
  • 3-MONTH T-BILL YIELD: 0.14%  
  • YIELD CURVE: 2.22 from 2.14

COMMODITY/GROWTH EXPECTATION:

  • CRB: 296.06 +1.29%%
  • Oil: 81.25 -1.74% - BULLISH
  • COPPER: 383.35 +0.62% - OVERBOUGHT
  • GOLD: 1,370.97 -0.28% - BULLISH

CURRENCIES:

  • EURO: 1.3977 -0.55% - BULLISH
  • DOLLAR: 77.041 +0.51%  - BEARISH

OVERSEAS MARKETS:

European markets:

  • FTSE 100: (0.11%); DAX (0.03%); CAC 40 (0.13%)
  • Major indices are weaker in tandem with the softer tone set by Asian markets with mining, auto, retail and construction sectors underperforming.
  • Strikes across France shuts oil terminals
  • Philips reported Q3 EBIT of €517M vs €453M expected, with a €154M gain on the sale of the remaining stake in NXP boosting net income to €524M. Shares fell 5% on a cautious revenue outlook statement
  • Rio Tinto (RIO.LN) BHP Biliton (BLT.LN) abandon production jv

Asian markets:

  • Nikkei (0.02%); Hang Seng (1.21%); Shanghai Composite (0.54%)
  • Markets fell across the region in muted reaction to Fed Chairman Bernanke's comments on Friday which fuelled speculation of the likelihood of further QE measures being implemented.
  • Japan ended flat, supported by short covering and defensive plays. 
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