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Nicholas Colas (Chief Market Strategist): 212 448 6095 or ncolas@convergex.com Christine Clark: 212 448 6085 or cclark@convergex.com Beth Reed: 212 448 6096 or breed@convergex.com

Stocks closed mixed Wednesday after spending much of the day in negative territory amid speculation the Fed may not provide as much economic stimulus as previously expected (S&P 500 -0.3%, Dow

-0.4%, Nasdaq +0.2%).

hundred billion dollars over a few months, which would come up shy of estimates ranging from $500 billion to $1 trillion. On the economic front, new home sales rose more-than-predicted in September, advancing 6.6% to an annual pace of 307K units. Meanwhile, orders for durable goods increased 3.3% last month after a decline of 1.3% in August, and mortgage applications for purchasing and refinancing posted a gain last week as fixed-term mortgages sported near-record low interest rates.

A WSJ article said the central bank’s debt purchases may amount to several

the ce ntral bank’s debt purchase s may amount to several Correlations Between Fruit Flies and

Correlations Between Fruit Flies and Market Rallies

several Correlations Between Fruit Flies and Market Rallies Morning Markets Briefing Market Commentary: A snapshot of

Morning Markets Briefing

Market Commentary:

A snapshot of the markets through the

lens of ConvergEx.

October 28 th , 2010

Summary: Rallies in the equity markets seem to die premature deaths, so we have pulled forward our customary monthly analysis of asset price correlations a few days to assess what the recent updraft in equities means to price movements. After all, who knows how long the good times will roll? Good news here – October’s rally was accompanied by modest but perceptible moves lower for industry correlations in stocks. That’s a healthy sign, as this increases the amount of diversification available to equity investors. If there is a cautionary lesson from the October data, it is that the overarching fundamental of dollar weakness pushed precious metals correlations higher with respect to financial assets. That should correct itself over time, but in the near term any dollar strength could leave both stocks (financial assets) and precious metals (physical assets) moving lower in a coordinated fashion.

Fruit flies (drosophilia melanogaster to you Classics buffs out there) are extremely useful to scientists because they die quickly. More accurately, they are born, grow, breed and die in just a few weeks, which make them ideal organisms to test theories of genetic mutation. You wouldn’t think that a little fly has much in common with people, but they share about 75% of all known human disease genes and researchers use them to assess treatments for everything from Parkinson’s to drug addiction. Their short life spans allow scientists to quickly assess genetic mutations in the offspring of treated flies, rather than waiting weeks or months longer for other lab animals to go through a life cycle.

Market rallies in 2010 have had about the same longevity as the average fruit fly (or so it seems), so I have pulled up our customary monthly analysis of asset price correlations by a few days to put the September-October move under the microscope. There is mostly good news in the data, but a cautious note or two. We

have attached our customary charts and table to this report, and they provide additional useful color to the points we’ll make below.

additional useful color to the points we’ll make below. Market Commentary – Pages 1-4, Equities /

Market Commentary – Pages 1-4, Equities/Conferences & Earnings Page 5, Fixed Income Page 6, Options – Page 7, Exchange-Traded Funds/Indexes Page 8, Social Media & Internet Blogs Top Stories – Page 9

1 1

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Nicholas Colas (Chief Market Strategist): 212 448 6095 or ncolas@convergex.com Christine Clark: 212 448 6085 or cclark@convergex.com Beth Reed: 212 448 6096 or breed@convergex.com

Christine Clark: 212 448 60 85 or cclark@convergex.com Beth Reed: 212 448 6096 or breed@convergex.com

The good news is that industry sector correlations have dropped again in October for U.S. stocks. The chief reason to invest in a diversified portfolio of assets like equities is because not all of them move together at the same time. For much of the year, however, correlations among the 10 major industrial sectors of the market have been inordinately elevated, especially during market declines. That is especially damaging to investors, since there is essentially “nowhere to hide.”

Our data from October’s trading shows that correlations for the likes of tech, energy, industrials and other groups dropped for the second straight month when compared to overall market action. Only Health Care actually increased its correlation to the S&P 500. Granted, correlations by definition only go to 100%, and many industry groups were in the +90% camp just 3 months ago. But a rally accompanied by lower correlations is cause for optimism, and we’ll take it.

If there is a source of concern it is that the weakness of the dollar has clearly fueled the risk asset rally of the last 2 months. That much is visible from the sharply higher correlations between precious metals and stocks in October. Gold, for example, is only priced in dollars so it is a good proxy for concerns over dollar weakness. Precious metals have been winning investments because investors are looking for ways to hedge potential volatility in financial assets. If they are, in the near term, tied at the proverbial “dollar-hip,” any move higher for the greenback might spell a common pullback for both.

I will close out this brief note with one additional, if geeky, point: there appears to be a strong correlation, if not causation, between the CBOE VIX Index and the average correlation among U.S. equity industry groups. Over the past year the correlation between “Fear” (as measured by the VIX) and how much the 10 industrial sectors track the market exceeds 60%. In other words, as the benefits of diversification wane (correlations increase), the price of insurance in the options market tends to rise. That makes sense, since rising correlations make sell offs even harder to bear with every stock in a portfolio more likely to be down together.

   

2

Nicholas Colas (Chief Market Strategist): 212 448 6095 or ncolas@convergex.com Christine Clark: 212 448 60

Nicholas Colas (Chief Market Strategist): 212 448 6095 or ncolas@convergex.com Christine Clark: 212 448 6085 or cclark@convergex.com Beth Reed: 212 448 6096 or breed@convergex.com

Beth Reed: 212 448 6096 or breed@convergex.com Symbol Current 1 Month Ago Historical 30-Days Correlation

Symbol

Current

1 Month Ago

Historical 30-Days Correlation Against S&P 500

2 Months Ago

3 Months Ago

Change in absolute correlation* Change in absolute correlation* Change in absolute correlation*

 

(10/26/10)

(10/1/10)

(8/31/10)

(07/30/10)

from 1 mo ago

from 1 mo ago to 2 mos ago

from 2 mos ago to 3 mos ago

XLE

86.25%

91.12%

92.95%

94.56%

4.87

1.83

1.61

XLV

90.70%

87.03%

82.26%

86.13%

3.67

4.77

3.87

XLI

90.66%

95.63%

94.90%

95.73%

4.97

0.73

0.83

XLU

61.47%

71.02%

81.42%

83.28%

9.55

10.40

1.86

XLP

84.38%

87.14%

88.43%

83.14%

2.76

1.29

5.29

IYZ

84.72%

87.42%

92.46%

90.93%

2.70

5.04

1.53

XLK

88.57%

93.78%

95.11%

95.99%

5.21

1.33

0.88

XLY

91.56%

96.97%

93.88%

95.25%

5.41

3.09

1.37

XLF

85.24%

95.45%

97.72%

94.16%

10.21

2.27

3.56

XLB

79.11%

86.67%

90.50%

89.96%

7.56

3.83

0.54

GLD

57.49%

-13.44%

13.34%

20.11%

70.93

26.78

6.77

SLV

57.33%

14.83%

43.75%

43.19%

42.50

28.92

0.56

EFA

90.47%

94.42%

92.92%

92.15%

3.95

1.50

0.77

EEM

81.74%

90.55%

91.37%

88.40%

8.81

0.82

2.97

FXA

64.11%

83.38%

79.13%

86.78%

19.27

4.25

7.65

FXE

55.17%

47.27%

60.59%

30.84%

7.90

13.32

29.75

FXY

2.94%

-41.41%

-40.61%

-50.33%

44.35

0.80

9.72

HYG

40.54%

46.12%

61.11%

86.12%

5.58

14.99

25.01

LQD

-2.80%

-68.98%

-42.55%

-13.35%

66.18

26.43

29.20

*Red indicates increasing correlation; green indicates decreasing correlation

Source: IVolatility.com

Name Energy Health Industrials Utilities Consumer Staples Telecomm Technology Consumer Discretionary Financials
Name
Energy
Health
Industrials
Utilities
Consumer Staples
Telecomm
Technology
Consumer Discretionary
Financials
Materials
Gold
Silver
EAFE Index
Emerging Markets
Australian Dollar
Euro
Japanese Yen
High Yield Corporate Bond
Investment Grade Bond
EAFE Index Emerging Markets Australian Dollar Euro Japanese Yen High Yield Corporate Bond Investment Grade Bond

3

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4

 

Nicholas Colas (Chief Market Strategist): 212 448 6095 or ncolas@convergex.com Christine Clark: 212 448 6085 or cclark@convergex.com Beth Reed: 212 448 6096 or breed@convergex.com

 
Christine Clark: 212 448 60 85 or cclark@convergex.com Beth Reed: 212 448 6096 or breed@convergex.com  
   

U.S. EQUITIES

 

Energy and materials fell for a second day as the dollar index rose 0.5% and oil prices snapped a 3-day win streak, while COP slid -1.2% in light of higher commodities prices and improved refining margins, despite posting 3 rd quarter earnings that nearly doubled. Elsewhere in earnings news, S sank 9.9% after reporting better subscriber numbers but a wider quarterly loss, and retailer JNY (-21.2%) plunged on weaker-than-expected net income and sharply rising cotton prices. On the tech front, AAPL (-0.1%) again delayed the release of its white iPhone, this time until spring 2011. Aimed to rival AMZN’s (-1.4%) Kindle, BKS (-0.1%) unveiled a color touch screen version of its Nook electronic reader.

Important Earnings Today (with Estimates) From…

 

S&P Futures

MMM: $1.51 CRI: $0.74

DRE: $0.26 HS: $0.82 MFE: $0.51

OSK: $1.38 PNW: $2.01 QSFT: $0.32

One Day (High –1186.25; Low – 1167.75):

NLY: $0.67 CELG: $0.64 EK: $-0.31 IART: $0.66 MJN: $0.57

NLY: $0.67 CELG: $0.64 EK: $-0.31 IART: $0.66 MJN: $0.57

AN: $0.42 CEPH: $1.79 EMN: $2.22 IRM: $0.29

MET: $1.03

SHAW: $0.56 CLF: $2.59 AVP: $0.47 CME: $3.66 BLL: $1.43 CMS: $0.45 UTHR: $0.54 CCE: $0.54

EVR: $0.34 KBR: $0.43

MSFT: $0.55 RTN: $1.13

EXPE: $0.55 LLL: $2.02 MCRS: $0.34 RGC: $0.08

XOM: $1.40

LEA: $1.06 MWW: $0.00 WM: $0.59

FII: $0.38 LPS: $0.89 MCO: $0.46 REV: $0.42

BX: $0.25

CL: $1.19

FSLR: $1.96

LVLT: $-0.11 MOT: $0.10 HOT: $0.22

BMC: $0.61 VRSN: $0.22 FO: $0.74 LZ: $2.65

NBL: $0.81 SUN: $0.44

BC: $-0.32 DOW: $0.41 CAH: $0.53 DUK: $0.42

BEN: $1.74 CLI: $0.68 OMX: $0.12 TEL: $0.70 GNW: $0.25 MXIM: $0.37 OCR: $0.49 XEL: $0.54

 

Source: Bloomberg

Important Conferences/Corporate Meetings Today:

None

 

Prior Day SPX (High – 1183.84; Low – 1171.70; Close – 1182.45):

 

Three Day (High – 1193.00; Low – 1167.75):

Close – 1182.45):   Three Day (High – 1193.00; Low – 1167.75): Source: Thomson ONE  
Close – 1182.45):   Three Day (High – 1193.00; Low – 1167.75): Source: Thomson ONE  

Source: Thomson ONE

   

5

 

Nicholas Colas (Chief Market Strategist): 212 448 6095 or ncolas@convergex.com Christine Clark: 212 448 6085 or cclark@convergex.com Beth Reed: 212 448 6096 or breed@convergex.com

Christine Clark: 212 448 60 85 or cclark@convergex.com Beth Reed: 212 448 6096 or breed@convergex.com
   

FIXED INCOME

 

Ten-year Treasury notes declined for a 6 th consecutive day, the longest losing streak in roughly 2 years, after new home sales rose more than expected and amid speculation the Fed may be more conservative with its monetary easing strategy than previously anticipated. Benchmark yields rose 8 bps to 2.72%, while 30-year yields added 6 bps to end the day at 4.05% and 2-year rates were little changed at 0.41%. Meanwhile, the government’s $35 billion 5-year note auction drew a yield of 1.330% and saw coverage of 2.82 times, lower than at September’s sale but higher than the average of 2.76 times over the past 10 offerings.

than the a verage of 2.76 times over the past 10 offerings.   Source: Bloomberg Source:
than the a verage of 2.76 times over the past 10 offerings.   Source: Bloomberg Source:
 

Source: Bloomberg

Source: Bloomberg

 

Today’s Important Economic Indicators/Events (with Consensus):

Jobless Claims (8:30am EST): 455K EIA Natural Gas Report (10:30am EST)

 

6

 

Nicholas Colas (Chief Market Strategist): 212 448 6095 or ncolas@convergex.com Christine Clark: 212 448 6085 or cclark@convergex.com Beth Reed: 212 448 6096 or breed@convergex.com

 
Christine Clark: 212 448 60 85 or cclark@convergex.com Beth Reed: 212 448 6096 or breed@convergex.com  

U.S. EQUITY

   

OPTIONS

   

SPX – The underlying index ended little changed on the day (-0.3 %) recovering late in the day from a mild selloff (-1.1% intraday). Although the implied volatility, as measured by the VIX, popped a bit on the early selloff in the underlying index (+11 %), this was largely reversed as the underling rally muted the uncertainties expressed in rising premiums, as the VIX ended +2 %. Trading in SPX options was mixed, with some notable bearish trades in both out of the money calls and puts. The December 1250 calls were sold 8,000 times @ $5.90. In a couple of ‘disaster put trades’ , the January 750 puts were bought 5,000 times: half @ $0.80 and half @$0.85. The November 875 were also bought about 10,000 times @ $0.15. Also, The was also a calendar put spread were the December 900 puts were sold for $1.00 vs. buying the January 800 puts @ $1.20, 7,000 times (approximately delta neutral).

ETF- The market traded in negative territory throughout the day and the VIX managed to come in after reaching its highs midday. In broad-based products we highlight a large print in UUP (US Dollar Index Bullish Fund) as paper bought 55,400 Mar 23 calls and 105,500 Mar 24 calls in what was a bullish call stupid. In other trading we saw a bearish trade in XLK (Technology) as one investor rolled a long put spread; the Dec 23/20 put spread was sold roughly 110,000 times while the Mar 23/20 put spread was bought roughly 150,000 times. In other sector flow we saw an investor position for upside in XLF (Financial) through the outright purchase of the Dec 15 calls 50,000 times. Lastly in the international space, EEM (Emerging Markets) saw a volatility seller through the Jan12 50 / 35 put spread delta neutral, while in EFA an investor sold the Dec 59 calls 14,000 times.

 
   

CURRENT IMPLIED VOLATILITY / CURRENT HISTORICAL VOLATILITY

   

Rank

10/21/2010

10/22/2010

10/25/2010

10/26/2010

10/27/2010

30-Day Implied Vol

1

MFE

MFE

MFE

MFE

MFE

6.07

2

DTV

MKC PNW
MKC
PNW

MKC

PTV

PTV

7.36

3

RSH

DTV

MKC

DTV

20.87

   

BIGGEST MOVERS

   

4

MYL

DTV

MJN

DTV

PNW

33.75

 

Top 10

30-Day Implied Vol

Bottom 10

30-Day Implied Vol

5

MJN

GENZ

GENZ

PNW

SYMC

46.41

 

CCE

530.72%

24.44

MKC

-53.21%

17.15

6

EFX

MJN

SYMC

XEL

VAR

27.90

AVP

32.24%

50.99

XEL

-46.10%

17.09

7

SYMC

RSH

MYL

SYMC

GENZ

17.05

RHI

25.80%

35.40

BRCM

-45.88%

31.77

8

PTV

MYL

CEPH

GENZ

CEPH

34.32

DTE

25.74%

18.52

LIFE

-44.61%

23.95

9

CHRW

SYMC

CHRW

VAR

ORLY

31.29

MDP

21.91%

36.25

MCK

-42.58%

23.63

10

BMC

CEPH

K

CHRW

K

19.25

FDX

19.23%

28.82

S

-32.29%

45.43

11

VAR

Q

VAR

CEPH

MA

33.77

GME

15.87%

40.06

MOLX

-31.83%

31.47

12

CA

CEPH
CEPH

CHRW

TJX

MYL

FSLR

51.38

KG

13.95%

8.26

MYL

-25.41%

29.02

13

VAR

SJM

MJN

MJN

34.57

ESRX

13.53%

33.24

CHRW

-24.06%

21.49

14

MDP

ORLY

ORLY

K

EIX

18.71

CEG

13.22%

32.75

NVLS

-21.44%

30.54

15

K

MDP

PTV

MA

PCG

20.76

 

16

GENZ

VRSN

VRSN

ORLY

TJX

26.15

17

Q
Q

BMC

MDP

PCG

VRSN

30.98

18

SJM

K

BMC

EIX

BBY

31.83

19

VRSN

PTV

NRG

SJM

CFN

32.61

 

We ranked the S&P 500 companies from the highest to lowest 30 day implied to historical volatility ratio. Above we identify the 10 most positive and negative movers.

 

20

AN

HSP

BBY

TJX

FII

28.67

21

ORLY

TJX

COH

NI

SJM

22.33

22

CNP

AN

AN

VRSN

BMS

24.52

 

23

TJX

SJM

PCG

BBY

DHI

44.30

24

NI

HRS

FISV

QCOM

GME

40.06

The table to the left represents the 25 highest 30 day implied to historical volatility ratios within the S&P 500 companies. The green represents names new to the list while the red represents names that have fallen out.

25

HRS

HAR

DHI

FSLR

QCOM

29.43

 

PPL

CA

HAR

DHI

MKC

 

TSS

EFX

HRS

FISV

CHRW

 

EBAY

CNP

HSP

AN

MYL

MKC

NI

Q

COH

XEL

HSP

 

RSH

NRG

NI

 

PNW

BMC

 
 

MDP

   

7

 

Nicholas Colas (Chief Market Strategist): 212 448 6095 or ncolas@convergex.com Christine Clark: 212 448 6085 or cclark@convergex.com Beth Reed: 212 448 6096 or breed@convergex.com

 
Christine Clark: 212 448 60 85 or cclark@convergex.com Beth Reed: 212 448 6096 or breed@convergex.com  
 

Exchange-Traded Funds/Indexes

 
 

Prior Day Peformance of Largest ETFs by Assets

 

S&P 500 Sector ETFs

 

Name (Net Assets*)

Ticker Category

Daily Return

 

Sector

Ticker

1-Day Perf

YTD Perf

 

Sector

Ticker

1-Day Perf

YTD Perf

SPDRs SPDR Gold Shares iShares MSCI Emerging Markets Index iShares MSCI EAFE Index iShares S&P 500 Index

SPY

Large Blend N/A Diversified Emerging Mkts Foreign Large Blend Large Blend

-0.45%

Energy

XLE

-0.42%

4.07%

Telecomm

IYZ

-0.95%

9.14%

GLD

-1.04%

Health

XLV

-0.61%

0.16%

Technology

XLK

0.33%

6.06%

EEM

-1.70%

Industrials

XLI

-0.74%

15.87%

Consumer Discretionary

XLY

-0.62%

17.94%

EFA

-0.96%

Utilities

XLU

-0.41%

1.84%

Financials

XLF

0.07%

1.25%

IVV

-0.28%

Consumer Staples

XLP

-0.52%

7.93%

Materials

XLB

-0.95%

4.55%

 

Prior Day Top Volume ETFs

 

Currency ETFs

 
 

Name

Ticker Category

Shares Traded

 

Currency

Ticker

1-Day Perf

YTD Perf

 

Currency

Ticker

1-Day Perf

YTD Perf

SPDRs iShares MSCI Emerging Markets Index Financial Select SPDR PowerShares QQQ iShares Russell 2000 Index

SPY

Large Blend

174,307,690

Australian Dollar British Pound Sterling Canadian Dollar Euro Japanese Yen

FXA

-1.32%

8.12%

Mexican Peso Swedish Krona Swiss Franc USD Index Bearish USD Index Bullish

FXM

-0.21%

4.75%

EEM

Diversified Emerging Mkts Specialty - Financial

68,764,762

FXB

-0.46%

-2.67%

FXS

-0.70%

5.35%

XLF

52,321,848

FXC

-0.45%

1.92%

FXF

-0.54%

4.20%

QQQQ Large Growth

48,149,986

FXE

-0.63%

-4.02%

UDN

-0.48%

-1.13%

IWM

Small Blend

46,775,639

FXY

-0.26%

13.56%

UUP

0.58%

-1.86%

 

Prior Day Top Performers

 

VIX ETNs

Fixed Income ETFs

 

Name

Ticker Category

Daily Return

 

Name

Ticker

1-Day Perf

YTD Perf

 

Bonds

Ticker

1-Day Perf

YTD Perf

Direxion Daily Semicondct Bull 3X Shares PowerShares DB Base Metals Dble Shrt ETN Direxion Daily China Bear 3X Shares ProShares UltraShort MSCI Pacific ex-Jpn Direxion Daily Emrg Mkts Bear 3X Shares

SOXL

N/A

9.19%

iPath S&P 500 VIX Short-Term Futures ETN

VXX

1.63%

-61.46%

Aggregate Investment Grade High Yield 1-3 Year Treasuries

AGG

-0.19%

4.71%

BOM

Bear Market

7.51%

 

LQD

-0.26%

7.24%

CZI

Bear Market

6.32%

HYG

-0.11%

3.20%

JPX

Bear

Market

5.49%

iPath S&P 500 VIX Mid-Term Futures ETN

VXZ

0.09%

-2.45%

SHY

-0.05%

1.69%

EDZ

Bear Market

5.11%

 

7-10 Year Treasuries IEF -0.58%

10.34%

 

20+ Year Treasuries

TLT

-0.88%

10.38%

 

Others

 
 

ETF

Ticker

1-Day Perf

YTD Perf

 

ETF

Ticker

1-Day Perf

YTD Perf

Gold

GLD

-1.04%

20.70%

Crude Oil

USO

-0.73%

-9.83%

Silver

SLV

-0.95%

39.43%

EAFE Index

EFA

-0.96%

2.37%

Natural Gas

UNG

0.74%

-45.93%

Emerging Markets

EEM

-1.70%

10.12%

 

SPDRs

SPY

-0.45%

6.12%

Major Index Changes:

 
 

None

ETFs in the Headlines and Blogs:

 

The Problems with Physical Commodity ETFs - http://seekingalpha.com/article/232559-the-problems-with-physical-commodity-etfs Why base-metal physical ETFs could be a bad deal - http://ftalphaville.ft.com/blog/2010/10/27/384851/why-base-metal-physical-etfs-could-be-a-bad-deal/

 
   

8

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Latest Popular Digg.com Business News Entitlement nation: More are living off tax revenues, and fewer are providing them - http://articles.chicagotribune.com/2010-09-21/news/ct-edit-benefits-

20100921_1_tax-policy-center-entitlement-levies

A shift toward working from home: Software makes it easier for companies, employees - http://articles.chicagotribune.com/2010-08-16/business/ct-biz-

0816-on-the-job-20100816_1_virtual-workers-telecommuting-yorkville-home

Chevy runs deep: 2010’s top 5 rebranding fails - http://www.mlive.com/auto/index.ssf/2010/10/chevy_runs_deep_and_2010s_top.html Why Apple won’t buy Facebook – or Sony - http://tech.fortune.cnn.com/2010/10/26/why-apple-wont-buy-facebook-or-sony/

Calculated Risk DataQuick: California Mortgage Defaults Rise in Third Quarter - http://www.calculatedriskblog.com/2010/10/dataquick-california-mortgage-defaults.html Philly Fed September State Coincident Indexes - http://www.calculatedriskblog.com/2010/10/philly-fed-september-state-coincident.html ATA: Truck Tonnage Index increases in September: “Economy barely growing” - http://www.calculatedriskblog.com/2010/10/ata-truck-tonnage-index- increases-in.html Real House Prices, Price-to-Rent Ratio - http://www.calculatedriskblog.com/2010/10/real-house-prices-price-to-rent-ratio.html

The Wall Street Journal Fed Gears Up for Stimulus - http://online.wsj.com/article/SB10001424052702303891804575576533845166848.html Putting a Price on Professors - http://online.wsj.com/article/SB10001424052748703735804575536322093520994.html

The Big Picture Is Google a Monopoly? - http://www.ritholtz.com/blog/2010/10/is-google-a-monopoly/

Bespoke Investment Group Netflix Headed to S&P 500? - http://www.bespokeinvest.com/thinkbig/2010/10/26/netflix-nflx-headed-to-sp-500.html Revenue Beat Rates - http://www.bespokeinvest.com/thinkbig/2010/10/26/revenue-beat-rates.html Bespoke’s Commodity Snapshot - http://www.bespokeinvest.com/thinkbig/2010/10/26/bespokes-commodity-snapshot.html New 52-Week Highs by Sector - http://www.bespokeinvest.com/thinkbig/2010/10/26/new-52-week-highs-by-sector.html

The Baseline Scenario Shape-Shifting Deficit Hawks - http://baselinescenario.com/2010/10/26/shape-shifting-deficit-hawks/

Zero Hedge Greece Caught Lying by Eurostat Again, As Budget Deficit Revised from 3% Initially to Over 15% of GDP - http://www.zerohedge.com/article/greece-caught-

lying-eurostat-again-budget-deficit-revised-3-initially-over-15-gdp

Trading Olives and Feta Cheese for Submarines Is a Losing Proposition - http://www.zerohedge.com/article/guest-post-trading-olives-and-feta-cheese- submarines-losing-proposition

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- http://www.zerohedge.com/article/guest-post-trading-olives -and-feta-cheese- submarines-losing-proposition 9

Nicholas Colas (Chief Market Strategist): 212 448 6095 or ncolas@convergex.com Christine Clark: 212 448 6085 or cclark@convergex.com Beth Reed: 212 448 6096 or breed@convergex.com

Beth Reed: 212 448 6096 or breed@convergex.com GENERAL DISCLOSURES This presentation discusses general

GENERAL DISCLOSURES

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nor does it express the views, of other departments or divisions of BNY Conver gEx Group,

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