Tuesday, March 9, 2010

Market Update-Equity Sectors -Europe $SPY


·         Market Update – another quiet session on the newsflow front, but risk assets remain very resilient and have rallied off their lows.  Stocks saw brief profit taking in the morning and opened off a few points, but buyers stepped in on the weakness (similarly, credit/IG opened modestly wider but is now flat/tighter).  Nothing in particular today driving the strength – just a continuation of the same trends (i.e. buyers aren’t chasing prices higher, but remain ready to purchase on any pullback; shorts covering on any pullback).  Volumes still very light and people are waiting/watching to see when/if the SP500 can close north of 1150 (which are the highs for this rally).  However, while people waiting to see if sp can set new highs, the Nasdaq and R2K are both extending their gains (they both already set new highs for this rally last Fri). 

·         Equity Sectors – strength across the board for the most part; the “safety” groups are flat or down on the day (staples, utilities, health care).  Telecom is up more than 1% today, extending its rally from Mon (this group is up near 3% on the day).  S has been a big driver in the telecoms.  Capital goods stocks also are strong (led on the upside by JEC, GR, PCP, COL, UTX, HON, BA, LMT, etc, are all up more than 1%).  Materials are flattish as AKS extends its gains (up another 2%) but AA, SEE, MON, and others, lag.  STLD just issued an earnings update on Q1 (the stock is off 0.6%).  Financials are outperforming small w/the most noticeable activity occurring in C shrs, which are up 6%+ and breaking north of its 200day MA.  Tech is outperforming, up 0.6%, despite TXN being off more than 2% (after its mid-Q last night) and despite CSCO coming for sale on back of its 11am announcement. 

·         Best Performing SP500 stocks: S, C, SWN, YUM, ODP, TLAB, NVDA, WYNN, JDSU, JEC
weakest performing sp500 stocks: IVZ, TXN, THC, CBS, IGT, MI, FSLR, KR, CME

·         Commodities: With the dollar coming off its highs from the morning, commodities are mixed today. Copper has come off its lows and is up 0.1%. Gold is trading near flat heading into the afternoon, rallying late in the morning (gold was weak overnight on back of the China comments about not increasing its gold reserves). Oil is down 0.1% trading around $81.75 - again off its earlier lows (crude was off as much as 2% earlier in the day). Natural gas has bucked the trend, coming off its highs and is trading at $4.55, up 0.2%.

·         FX: USD (DXY) is up 0.3%, although coming off its highs. The dollar has also come off its highs vs. the Euro and pound (although is still up ~0.4-0.5% against each).  The yen is higher against the dollar. 

·         Corp. Credit: Corp. Credit is trading roughly in line with stocks today. IG spreads opened wider, but have narrowed .5bps heading into the afternoon; HY has gained 11/32 of a pt. 

·         Treasuries: TSYs are higher although off their best levels; the China comments on TSYs this morning and Fed’s Stark comments last night (about gradual drawdown in the Fed’s balance sheet) helping TSYs.  The 2s are yielding .89bps and the 10s are yielding 3.71%. The 2-10 year spread has steepened to 2.82 bps.


Catalysts to Watch

·         JPMorgan will be hosting an Aviation, Transportation, and Defense conf Mar 9-10. 

·         In financials, w/the BKX right at the upper end of a months-long technical range, investors will be watching for any updates from mgmt teams at the Citi Financial Services Conf (which runs Wed and Thurs). 

·         On the earnings front, NSM is the first Feb-end company to post results (they come Thurs night); also on the tech front – watch for mid-Q updates out of NVLS (wed).  There are a bunch of retailers due to report this week (JCG, AEO, HOTT, ARO, and ANN).  The bulk of the Feb-end earnings reports (like FDX, ORCL, DFS, RIMM, etc) won’t start to hit until the week of Mar 15 and beyond.  The CQ1 earnings releases kick off w/AA on Apr 12.  For energy, XOM and CVX will be holding analyst meetings this week (other big analyst meetings to watch – V and ADI). 

·         There are going to be a bunch of Treasury auctions to watch - 3yrs 3/9 ($40B), 10yrs 3/10 ($21B), and 30yrs 3/11 ($13B). 

·         Rebalance - The quarterly share rebalance for the S&P 500, S&P MidCap 400, S&P SmallCap 600 Indices will take place at the close of business Friday, March 19, 2010. The share changes will be announced by 7 PM on Friday, March 12.  M Moon

Economics Calendar – daily view

·         Wednesday, Mar. 10th: US (MBA Mortgage Applications); Eurozone (UK Feb. NIESR GDP est., German Trade Balance, German CPI, UK IP); Other (China PPI, CPI, Retail Sales, IP, Trade Balance, New Zealand Reserve Bank Interest Rate Decision, New Zealand Business Manufacturing Index, Japan GDP).

·         Thursday, Mar. 11th: US (Trade Balance, Jobless Claims); Eurozone (n/a); Other (Australia Unemployment Rate, Swiss National Bank Interest Rate Decision, New Zealand Retail Sales).

·         Friday, Mar. 12th: US (Retail Sales, U. of Michigan Confidence, Business Inventories); Eurozone (Eurozone IP); Other (Canada Unemployment Rate).

Corporate events to watch coming up

·         Tues Mar 9: Earnings after the close (JMBA, SAM, VS, JCG, EXLS).  Analyst meetings (CVX, SYMM).

·         Wed Mar 10: earnings before the open (JCDecaux, Munich Re, MTN, AEO, DSGX, BFb, NAV, BKCC, NAV, Fortis, PLCE).  Earnings after the close (SMTC, WG, GYMB, HOTT, JAS, MW, AACC).  Analyst meetings (JAH, PL).  Mid-Q updates (NVLS). 

·         Thurs Mar 11: earnings before the open (CSUN, Volkswagen, JTX, SFD, JWa, IMAX, BKE, GEOY, First Data, K+S).  Earnings after the close (ARO, ZUMZ, GG, UTSI, NSM, SEAC, ULTA, PLL, SHFL, PSUN, COO).  Analyst meetings (ADI, IT, XOM, V, CERN). 

·         Fri Mar 12: earnings before the open (CTRN, HIBB, ANN).  Analyst meetings (UTX).   



·         Both the FTSE & SX5E lagged the sp500 today (both flattish).  While telecom continued its momentum for the second day in the US, that sector was strong in the FTSE, but underperformed in the SX5E.

·         The IBEX was the worst performing index in Europe, losing 0.68%. Consumer goods dropped ~3% caused by weakness in Ebro Puleva

·         The Swiss SMI and The Dutch AEX traded in line in the sp500 (the top European indices) The SMI was up due to strength in telecom (Swisscom) and consumer goods (Nestle), while the AEX as consumer goods (Unilever) & basic materials (Akzo Nobel) outperformed.

·         The FTSEMIB and the Swedish OMX both traded down together; Financials drove the OMX lower with Nordea Bank losing ~2.5%.


No comments:

Post a Comment