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What's New, 2/19/12

This daily market update was originally posted in "Summary" on my LinkedIn profile.

What's new: China:2nd 50bp RRR cut;new home prcs 4th mth dcrs;Foxcnn to shrply lft pay. Oil 104,9-mth high. US:earn this wk WMT,TGT,HPQ,CRM;pyrll tax cut passed;Jan lead ind 0.4%;jblss 4wk ma 365k. Grc:130b euro deal expctd 2/20 Eurofin mtg;considrd ring-fncd;4Q GDP -7%,-16% from peak,21% unemply. Spn auctn ok. Moody's fncl frms on revw. SPX 4Q eps +6.6%,2.8 ex AAPL. 2nd Chna assurnc to help Eurp. 4Q GDP Eurozn -1.3% saar,Grmn -0.7beat,Frnc 0.9 beat. Rtl ex auto 0.7% beat. Itly auction ok. BOJ incrs QE. India infltn down. Moody's Eurp cuts. China "fine tune"; CPI 4.5% miss. Fink "100% in equities."

Indexes (2/17): SPX 1361 ytd +8.2%,IT +14,fncl 14,mtrl 12,indu 10,dscr 10,QQQ 14,IWM 12,LQD 2,JNK 3. ACWI 10%,ACWX 11,EEM 16,BKF 20,AAXJ 16,China 7,ILF 14,EFA 10,Eur 9. VIX 18,10-yr US 2.01,Italy 5.6,euro 1.31,oil 104,gold 1725,GYX 396. Rmny GOP 72%,Obama Pres 60. Watch: VIX 20. AAPL 17% of QQQ.

Mkts drivers: SPX above 2012 consnsus 1340. DIA,QQQ,XLY,JNK,AAPL hit bull mkt hghs. Lwr infltn+stblzng grwth+low val=rising mkts. 2012 rotate "risk on" beta cyclcls, ECB Dec LTRO dcrsd bnk delevrging & fundng tail rsks. Cntrl bnks "competitive QE." US 4Q earn only 64% beat reducd est. Offset by Fed 0 rates longr;2/29 LTRO 5-600 b euro;Euro debt sales ok;Itly rates down;China soft land;value. Watch: Itly/Spn labr refrm;Port;Shngh indx;Isrl-Iran;commodty infltn;Jpn sls tax incrs.

Mkts assmptns: More glbl easing & delever;glbl tbtf intact;ECB LTRO/SMP monetiztn;Eur muddles thru;US mrgns stay high;oil not >> $100. Grc "orderly" dflt,3/20 paymnt;Port risk;ESM-ESF incrs;Srkzy loses Apr;12/9 fscl pact survives;euro drifts lwr. QE3 more likely after 1/25 FOMC;US decple;bnks well cap;corp strong bs;employ imprv;cnsmr rslnt;hsng bottm. China soft lands;prprty prices now -5-15% don't collps;more RRR cuts soon;ldrshp chng smooth. CEE hghst em risk. US 1Q 2.3,2Q 2.4. China 1Q 8.2%. 2012 glbl ~3%,US 2.4%,2013 2.8,Eur -0.5%,China 8.5%.

Left click on charts to enlarge.