The S&P/CS Composite-20 YoY for December is estimated to fall -2.4% versus a -1.59% decline in November.
10:00 am EST
Consumer Confidence for February is estimated to rise to 65.0 versus a reading of 60.6 in January.
Upcoming Splits
(NATI) 3-for-2
(WLL) 2-for-1
Other Potential Market Movers
The Fed's Kocherlakota speaking, $32 Billion 3 Month and $30 Billion 6-Month Treasury Bills Auctions, $35 Billion 2-Year Treasury Notes Auction, Richmond Fed Manufacturing Index, (SLB) Investor Conference and the EnerCom Oil and Services Conference could also impact trading today.
BOTTOM LINE: Asian indices are lower, weighed down by construction and airline shares in the region. I expect US stocks to open lower and to maintain losses into the afternoon. The Portfolio is 75% net long heading into the week.
BOTTOM LINE: I expect US stocks to finish the week modestly lower on more Mideast unrest, rising energy prices, emerging market inflation worries, more shorting, profit-taking and US housing concerns. My intermediate-term trading indicators are giving mostly bullish signals and the Portfolio is 75% net long heading into the week.
North American Investment Grade CDS Index 79.52 -.33%
European Financial Sector CDS Index 129.17 bps +1.13%
Western Europe Sovereign Debt CDS Index 172.33 bps -.96%
Emerging Market CDS Index 218.57 +.56%
2-Year Swap Spread 21.0 +1 bp
TED Spread 22.0 unch.
Economic Gauges:
3-Month T-Bill Yield .09% unch.
Yield Curve 283.0 +2 bps
China Import Iron Ore Spot $189.30/Metric Tonne -1.35%
Citi US Economic Surprise Index +72.0 -.1 point
10-Year TIPS Spread 2.37% +8 bps
Overseas Futures:
Nikkei Futures: Indicating -2 open in Japan
DAX Futures: Indicating -10 open in Germany
Portfolio:
Slightly Higher: On gains in my Medical and Retail long positions
Disclosed Trades: Added (IWM)/(QQQQ) hedges, added to my (EEM) short
Market Exposure: Moved to 75% Net Long
BOTTOM LINE: Today's overall market action is mildly bullish as the S&P 500 trades flat, despite recent equity gains, China inflation concerns and rising Mideast unrest. On the positive side, Education, HMO and Medical shares are especially strong, rising more than 1.0%. The Naz is holding up despite (AAPL) weakness. The 10-year yield is stable at 3.59%. Oil continues to mostly ignore the situation in the Mideast, rising inflation expectations, improving economic data and a rising euro. The UBS-Bloomberg Ag Spot Index is falling -1.6%. Lumber is rising +.81%. On the negative side, Disk Drive, Computer, Airline, Paper, Steel, Ag, Oil Tanker, Alt Energy and Coal shares are under pressure, falling more than 1.0%. Cyclicals are underperforming. The Saudi sovereign cds is jumping +9.54% to 138.28 bps and the Israeli sovereign cds is climbing +4.25% to 152.30 bps. US equities remain extraordinarily resilient to any potential headwinds as they continue their slow grind higher. Investor complacency regarding the deteriorating situation in the Mideast seems fairly high. Any significant decline in stability in the region from current levels will likely send oil back into the $90s. As well, rising unrest means more government food hoarding. Any meaningful rise in food or energy prices from current levels will significantly increase the odds of hard-landings in some key emerging market economies. So far, the market is mostly ignoring this possibility. I expect US stocks to trade mixed-to-lower into the close from current levels on rising Mideast unrest, profit-taking, China inflation fears and more shorting.
