Wednesday, February 10, 2010

Whats the Good Word

· Desk Color another relatively quiet session today; earnings are really starting to slow down and the names that are hitting don’t have the ability to really impact the broader tape (unlike banks, etc). This week is very light on the eco front as well while the East Coast snowstorm is impacting newsflow out of Washington (and its also impacting volumes/attendance on Wall St). Stocks were freaked out initially this morning immediately following the Bernanke text release (hit @ 10amET) on talk of hiking the discount rate, although have recovered from their lows as the Fed outlook was really very much as previewed (the “low for long” line was reiterated and if anything the timing on Fed balance sheet shrinkage was a bit longer than anticipated). Greece remains top of mind and despite a headline hitting on this topic every 5 minutes, there hasn’t been a ton incremental out this morning (see below for update). Desk pretty quiet for the most part. Shorts not as anxious to cover today as they were Tues although aren’t really laying back out new positions either. Vanillas not doing too much (as has been the trend for last few days). Technically, bulls disappointed we couldn’t close north of 1071 yesterday while bears don’t have upper hand until sub 1056.

· Equity Sectors – commodity-linked groups weak today as the US$ catches a bid on back of Bernanke’s comments (which are being perceived as hawkish). Materials and energy are both off 1% on the day. EOG off 6% post earnings and is the weakest energy stock. Materials stocks being led lower by the metals (in addition to the dollar, MT’s disappointing earnings are also weighing); MT is off 8% today while ATI, X, TIE all fall 3%. Tech, health care, discretionary, utilities, and telecoms are all off 0.5%. Financials are leading the market higher (up 0.5%), w/banks accounting for the bulk of the strength. Media stocks dip 1% following a bunch of earnings releases (NYT -6%, DISCA -3%, SNI -4%, DIS -1%).

· Technicals: Short term bears would reclaim below 1056, for MT support: 1035 10% drop, 1029 Nov low, 1026 Jan-Feb c=a, 1021 200 day MA, and 1019 Oct trough (Krauss)

· Earnings out Tues night: RNR, NTGR, XL, BIDU, UDR, LGF, AFG, AHL, CERN,

· Earnings out Wed morning: BHP, ELN, SNI, LPX, OMC, NYT, WYN, WXS, ID,

· Commodities: Commodities are weaker across the board as some hawkish
comments from Bernanke drive a spike in the dollar. Oil is off 30c to $73.40,
although well off its lows of the day. Natural gas is off 3c to $5.25. Gold is off $8 to
$1069.20, while copper is off just over a percent toda

· FX: USD (DXY) is up 0.35% and back over $80, although off its highs of the day. The dollar is up 0.4% on the Euro, 0.7% against the Pound, and up 0.2% against the Yen. The Euro is off 0.2% against the Yen.

· Corp Credit: Corp credit is outperforming the tape today as IG spreads narrow 1 bp
and HY is off just ¼ of a pt.

· Treasuries: Treasuries sell off today as the market moves lower. Yields on 2s have moved higher to 86 bps while yields on 10s edge higher to 3.65 pct. The 2-10 year spread flattened a bit today to 279 bps.

· Greece – there have been a slew of headlines in the last 24 hrs discussing various bailout scenarios being hashed out in Europe for Greece and other sovereigns; so far, it appears like officials are meeting and discussing options and some kind of a public announcement may be made tomorrow following the EU summit. However, it’s not clear if anything definitive will be announced this week. According to Bloomberg this morning, “European Union leaders meeting in Brussels tomorrow will probably press Greece to present more detailed budget cuts and stop short of announcing an aid package

No comments:

Post a Comment