Wednesday, February 24, 2010

The Market Rewind 02/24/10

· Equity Levels: SP500 ends up 10.6 points/0.9% to 1105. Nazz ends up 1% and the

R2K was up 0.8%.

· Market Update – stocks were in the green for most of the session, w/most people

citing Bernanke’s relatively dovish comments this morning as the big catalyst for the

move higher. Bernanke today was a bit more cautious on the outlook for the

economy (noting that a lot of the improvement we have seen has come from

inventory restocking and gov’t stimulus, not real end-market private demand) and

reiterated “extended period” re Fed Funds (calming market worries that the Fed was

about to embark on tightening campaign). Despite the strength though, the desk

was pretty quiet today. There remains a dearth of volume/conviction, esp. on days

when stocks rally – not a lot of real large vanilla buying today (or really since the 2/5

interim low). Technically we closed under the 50day (which is 1108 on the sp500

cash). Longs remain very jittery/nervous (see today the example in disk drives –

WDC spoke starting @ 2pmET @ the Goldman conf and mentioned that seasonality

is returning to tech – this was enough to hit the stock and STX along w/it) = people

quicker to sell on strength than they are to buy on dips.

· Equity Sectors – financials have been leading the market all day, trading up 1.5%.

The Bernanke rate reassurances really helping the group (pretty indiscriminate

buying across the board, esp. in credit sensitive names like banks and life insurers;

not a lot of “real” vanilla buying today however). Tech also strong, ending up 1%, as

a bunch of mgmt teams make pos. comments at the Goldman conf (helping to excise

concerns from the Samsung/BRCD events of Mon night) although tech buyers very

jittery (see WDC late in session – more below). Discretionary was a bright spot,

finishing up >1% (CCL climbs >6% after making pos. comments on demand; retailers

also strong as earnings this week, esp. ’10 outlooks, have been better; discretionary

would be even strong if not for the 12% decline in HRB after its profit warning).

Health care, industrials, staples, energy all pretty much tracked w/the sp500 (up

~0.7-0.9%). Materials end off small (weighed down by metals – CENX fell 10% after

earnings and AKS dips ~3.8% after earnings).

· Best Performing SP500 stocks: ADSK, CCL, MIL, MU, PTV, KEY, CME, AIG,


· Weakest performing sp500 stocks: HRB, WDC, AKS, TMO, MON, SJM, DHI, NRG,


· Commodities: Commodities were mixed today despite the dollar moving lower. Oil

surged today following the DOE report and finished at its highs of the day, up $1.25

to $80.10. Natural gas was up just 4c to $4.82. Gold was off $6 to $1097, its third

straight down day. Copper was up 0.35% and off its lows of the day.

· FX: USD (DXY) was flat on the day, finishing well off its lows. The dollar was off

0.2% against the Euro, but moved off its lows of the afternoon. The dollar was up

0.2% against the Pound, finishing at its highs of the day, and flattish against the Yen,

while also finishing at its highs of the day. The Euro was up 0.15% against the Yen

today, although it came off its highs of the day.

· Corp Credit: Corp credit lagged the market today as IG spreads came in just ¾ of a

bp and HY only gained 1/16 of a pt.

· Treasuries: Treasuries were mixed today as 2s sold off to yield 86 bps while 10s

were flattish, now yielding 3.68%. The 2-10 year spread saw another moderate

flattening, as it now sits at 282 bps, 9 bps below Monday’s all time high. This

afternoon we had a 5yr treasury auction which came in a bit on the weak side (yield

was 2.395% vs. cons. 2.389%) and bix/cover was 2.75x (vs. 2.8x last time and 2.48x

average). More here

No comments:

Post a Comment