THE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP - October 19, 2010

As we look at today’s set up for the S&P 500, the range is 16 points or -1.24% downside to 1170 and 0.11% upside to 1186. Equity futures are trading below fair value after the S&P failed to hold on to gains on Monday as hawkish comments from Treasury Secretary Geithner on the dollar, and results from IBM and Apple hit sentiment. Although both IBM and AAPL reported better than expected headline numbers, AAPL's EPS guidance of $4.80, was below consensus of $5.07 sending the stock down as much as (7%) in after-hours trading, while IBM dipped over (3.5%) weaker service signings.

Today sees a further slew of S&P 500 companies reporting with Goldman Sachs (GS), Bank of America (BAC) and Johnson & Johnson (JNJ) in focus before the open.

  • Apple (AAPL) sees 1Q EPS ~$4.80 vs est. $5.03
  • Infinera (INFN) 3Q adj. EPS 18c vs est. 9c
  • IBM (IBM) said service contracts down 7%
  • Microsoft (MSFT) said chief software architect Ray Ozzie is leaving the company
  • VMware (VMW) 3Q deferred rev. missed est., GS said 
  • Zions Bancorporation (ZION) 3Q loss-shr 47c vs est. 50c

 PERFORMANCE

  • One day: Dow +0.73%, S&P +0.72%, Nasdaq +0.48%, Russell +0.99%
  • Month-to-date: Dow +3.3%, S&P +3.81%, Nasdaq +4.73%, Russell +5.03%
  • Quarter-to-date: Dow +3.3%, S&P +3.81%, Nasdaq +4.73%, Russell +5.03%
  • Year-to-date: Dow +6.86%, S&P +6.24%, Nasdaq +9.32%, Russell +13.55%
  • Sector Performance: Financials +2.34%, Utilities +0.86%, Healthcare +0.85%, Energy +0.81%, Telecom +0.65%, Tech +0.48%, Materials +0.27%, Consumer Staples +0.25%, Industrials +0.14%, and Consumer Discretionary (0.16%).

 EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: 984 (+1613)
  • VOLUME: NYSE - 996.21 (-29.66%)
  • MARKET LEADING/LAGGING STOCKS YESTERDAY: Citi +5.57%, Allergan +5.45% and Wells Fargo +5.43%/H&R Block -11.49%, Fluor -5.09% and Halliburton -4.83%.
  • VIX: 19.09 +0.32% - YTD PERFORMANCE: (-11.95%)
  • SPX PUT/CALL RATIO: 1.45 from 2.85 -49.35%

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 15.92, 0.507 (3.289%)
  • 3-MONTH T-BILL YIELD: 0.15% +0.01%  
  • YIELD CURVE:- 2.14 from 2.14

COMMODITY/GROWTH EXPECTATION:

  • CRB: 298.74 +0.91%
  • Oil: 83.08 +2.25% - BULLISH
  • COPPER: 385.50 +0.42% - OVERBOUGHT
  • GOLD: 1,371.30 +0.02% - BULLISH

CURRENCIES:

  • EURO: 1.3989 +0.09% - BULLISH
  • DOLLAR: 76.934 -0.14%  - BEARISH

OVERSEAS MARKETS:

European markets:

  • FTSE 100: 0.04%; DAX +0.14%; CAC 40 0.07%
  • Major indices are trading flat as strength in financials is offset by weakness in commodity stocks.
  • Strikes in France are becoming more violent as unrest spreads
  • Germany Oct ZEW survey 72.6 vs cons 63.5 and prior 59.9

Asian markets:

  • Nikkei +0.43%; Hang Seng +1.25%; Shanghai Composite +1.58%
  • Markets closed broadly firmer.
  • Banking stocks rose after strong earnings from Citi
  •  Banking and commodity stocks led Hong Kong to its first rise in three trading days.
  • Japan rebounded as the yen stopped its march to greater strength. Blue chips were hurt by falls in AAPL and IBM in after-hours trading in the US. Shanghai reversed an early loss into a 1.6% gain, as energy shares took the Composite Index to a near six month high, closing just above the 3,000 level. 
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