EmailFollowing a 1.1% gain on Thursday, 0.43% is all that stands between an up year and a down year for the S&P 500.
On an absolute basis, that won't cut it for most investors. On a relative basis, though, it is about as good as it gets considering most of the world's major markets suffered double-digit percentage declines in 2011.
Today, then, is more about the record books than anything else and the overriding question is this: will the S&P 500 hold and possibly add to its year-to-date gain or will it end the trading year with a whimper and close below the unchanged line?
The S&P futures aren't giving away the answer. They are trading in-line with fair value, suggesting a flat start for the cash market.
Not surprisingly, there isn't any corporate news today that holds market-moving impact.
One of the lead headlines is that AMR Corp. (AMR) received a delisting notice from the NYSE. Shares of AMR are down 38% in premarket action, which might mean something more for the broader market if they hadn't already been relegated to penny-stock status.
There is even less to talk about on the U.S. economic front this morning, because there is nothing on the economic calendar today.
The one economic item that seems to be drawing any attention is the HSBC Manufacturing PMI report for China, which checked in at 48.7 for December versus 47.7 in November. The December reading was slightly less than the flash reading of 49.0, and while up from November, a number below 50 is still indicative of a contracting manufacturing sector.
The latter consideration has stirred the rate cut speculation pot for China, which was cited as a reason why the Shanghai Composite jumped 1.2% today to close out an otherwise awful year.
A subtle irony this morning is that there is little to talk about, which was rarely the case in 2011 -- a year that brought us the Arab Spring, a spike and then a large drop in both gasoline and gold prices, the Tohoku earthquake and tsunami in Japan, Osama bin Laden's death, sovereign debt contagion in the eurozone, the debt ceiling negotiation debacle, a Standard & Poor's downgrade of the AAA debt rating for the U.S., epic flooding in Thailand, Occupy Wall Street, the start of the 2012 presidential campaign, and the Cubs winning the World Series (sorry, I got ahead of myself on that last item; that won't happen until 2012).
It was an eventful year -- some events better than others -- and certainly a volatile year.
The calendar says New Year's Day is approaching, but frankly, today feels more like Thanksgiving Day than anything else.
We are thankful that the U.S. equity market held its own through one of the most uncertain periods in recent memory. Its resilience was a testament to supportive fundamental factors that were often overlooked in the face of scary-sounding macro headlines and a testament to the embedded premium it enjoys being the largest and most liquid market in the world.
We are thankful that we are here today in good health, just as we were at the beginning of the year, to provide you with insight on the market, and, without question, we are thankful for your loyal readership.
Happy New Year!
--Patrick J. O'Hare, Briefing.com
Patrick J. O'Hare is Chief Market Analyst for Briefing Research, Briefing.com's institutional research service. To request a free trial, please email researchsales@briefing.com.
