That’s the number everyone has their eye on for the S&P 500, as they seek direction about where we’re going next.
Here’s Mike O’Rourke on yesterday’s action:
The only clear trend in the equity market at the moment is one of going nowhere. The 1150 level has established itself as formidable resistance over the past week and a half, and for the past 3 weeks, the market has traded primarily between 1125 and 1145. It is the type of environment that wears upon both bulls and bears. Every day that the market languishes, bulls sell some longs to lock in profits as the breakout fails to materialise. At the same time, bears recognise that with every session that sustains the current levels, the overbought action of September gets worked off. Today was a sloppy, but not disastrous, session on the typical light volume market to which participants have become accustomed. There were some interesting single stock stories, but none seem to have merited a broad sell off. The American Express anti-trust story appeared very company specific. The only industry groups in positive territory were Autos & Components and Real Estate. The Autos were driven by the reports that Ford plans to have more cash than debt by the end of next year.
In Real Estate, the story that caught our attention was Boston Properties’ purchase of the John Hancock tower in Boston. There are several reasons it is noteworthy. The building was foreclosed upon by its mezzanine debt holders in Q1 of last year. The holders starting accumulating the distressed debt in the summer of 2008. The final purchase price for those mezzanine debt holders last year is unclear, but it has been reported that they paid $20.1 million plus the assumption of the $640 million mortgage. In today’s deal, Boston Properties is paying $289.5 million and the assumption of $640 million of debt making the building worth $930 million. That is still some distance from the $1.3 billion paid for in easy credit environment of 2006, but a vast improvement over last year. The second shoe to drop in commercial real estate appears to be tied tighter than most thought. Also interesting is the fact that Mort Zuckerman is the buyer. Zuckerman continually expresses a concerned outlook for the economy, but it is not preventing him from seizing what he perceives to be the opportunity to make a good investment.