Friday, June 11, 2010

Equity sectors-Technical update-Corp. Credit-Treasuries

· Equity sectors: Staples are the worst sector in the market, lagging on weakness in PM and WAG. Utilities are off 0.75% on weakness across the board, particularly in NRG. Energy is off just under 0.75% as a slide in crude weighs on the group. Financials are off over 0.5% and lagging on weakness in WFC and regional banks. Discretionary is off over 0.5% and lagging on the weak retail sales number. Industrials are outperforming the tape a bit, catching a bid from ag names on some follow-through from yesterday’s WASDE report and strength in transports. Telecom is slightly higher today as strength in S and AMT offsets weakness in T. Tech is up over 0.25% and outperforming on strength in semis (SOX up just under 1%). Materials are up over 0.3% on strength in integrated steels, some chemicals, and paper/pulp stocks. Healthcare is the top space in the market as a few sell side upgrades and strength in PFE, BMY, and GILD lead the group higher.
· Best performing sp500 stocks: MOT, APC, NSM, IP, PFE, ICE, ALTR, S, GCI, STZ
· Technical update – Krauss - Follow through past 1092 and the 1098-1100 hourly gap could set up another retest of the 1108 200 day moving average and other key resistance in the low 1100s. Day bulls keep the agenda above 1072. 
· Commodities:  Crude Oil is trading near its lows, down almost 2%. Natural gas spiked near the open and is trading near its highs, up >3%. Gold has come off its lows of the morning and is up ~0.35%. Copper is up ~1.7% in uneven trading.
· FX: USD (DXY) rallied near the opening and is trading near its highs, up ~0.4%. The dollar has gained vs. all crosses this morning. The euro sold off near the open, and is down ~0.4% - just off its lows. The euro is flat vs. the yen in choppy trading.
· Corp. Credit: Corp Credit is relatively flat; IG 14 is out ½ bps and HY 14 is up 1/16 of a pt.
· Treasuries: Treasuries are trading near their highs; the 2s are yielding 73bps and the 10s are yielding 325bps. The 2-10 spread has flattened from yesterday’s close to 251bps. 
· Europe: Europe is outperforming a weak S&P 500, with several reasons for the strength: 1) Spain denying a report of an aid request to the EU (Reuters) 2) Demand for the Italian debt auction 3) Continued strength of BP. Overall, the Euro Stoxx 50 is up ~1%, with Spain as the strongest index and the Dutch AEX and German DAX posting small losses (though more modest than the S&P 500) The best performing stocks in the IBEX include: Abengoa, Bankinter, and Sacyr Valleherm. Among the worst performing stocks in the OMX: Ericsson, Electrolux and Tele2AB.  The weakest performing stocks in the DAX include: Siemens, Adidas, and Daimler

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