THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP - January 6, 2011


As we look at today’s set up for the S&P 500, the range is 22 points or -1.14% downside to 1262 and 0.58% upside to 1284.   Equity futures are trading higher mirroring trading in Europe and Asia following good US employment data yesterday ahead of the non-farm payrolls Friday.

MACRO DATA POINTS:

  • 8.30am, Initial jobless claims, Jan 1, est. 408k; continuing claims, Dec. 25, est. 4080k
  • 8.30am, Net export sales (cotton, corn, soybeans, soy meal, wheat), Dec. 30
  • 10am, Freddie Mac 30-year mortgage
  • 10.30am, EIA natural gas storage change, Dec. 31, est. -131

TODAY’S WHAT TO WATCH:

  • LinkedIn plans to file for an IPO during 1Q - WSJ 
  • Goldman Sachs Healthcare CEO Unscripted Conference in NYC features Bristol-Myers, Medco Health, Medtronic, Amerigroup, Merck, Teva Pharma, Stryker, Celgene.
  • Boeing releases annual order, delivery figures, pre-mkt
  • Defense Secretary Robert Gates briefs Congressional leaders
  • AMR (AMR) said Dec. traffic increased 1.8%
  • Massey Energy (MEE) 4Q coal shipments missed forecast
  • Microsoft (MSFT)’s next Windows version will support System on a Chip (SoC) architectures, including ARM- based systems from Texas Instruments.
  • Resources Connection (RECN) 2Q adj EPS, rev. beat est.
  • Ruby Tuesday (RT) 2Q EPS, rev above est.
  • Sourcefire (FIRE) acquired Immunet for $21m, purchase will add to earnings after 2012
  • Symantec (SYMC) rated new market perform at Morgan Keegan
  • Tanger Factory Outlet Centers (SKT) announced two- for-one share split for Jan. 24 

PERFORMANCE: ALL 9 SECTORS BULLISH ON TRADE & TREND

  • One day: Dow +0.27%, S&P +0.50%, Nasdaq +0.78%, Russell 2000 +1.18%
  • Last Week: Dow +0.03%, S&P +0.07%, Nasdaq (-0.48%), Russell (-0.67%)
  • Month/Quarter/Year-to-date: Dow +1.26%, S&P +1.50%, Nasdaq +1.86%, Russell +1.46%
  • Sector Performance - BULLISH (Only 1 sector negative) - Financials +1.20%, Consumer Disc +0.82%, Tech +0.59%, Industrials +0.51%, Energy +0.40%, Healthcare +0.22%, Consumer Spls +0.03%, Materials 0.23%, Utilities (0.62%)               

 EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: 626 (+1413)  
  • VOLUME: NYSE 1042.92 (-4.35%)
  • VIX:  17.02 -2.07% YTD PERFORMANCE: -4.11%
  • SPX PUT/CALL RATIO: 1.80 from 1.50 (+20.94%)  

CREDIT/ECONOMIC MARKET LOOK:


Treasuries were on the defensive today with the better-than-expected private payrolls and service sector data.

  • TED SPREAD: 17.33 0.539 (3.212%)
  • 3-MONTH T-BILL YIELD: 0.14%    
  • YIELD CURVE: 2.79 from 2.73

COMMODITY/GROWTH EXPECTATION:  

  • CRB: 329.20 +0.45%
  • Oil: 90.30 +1.03% - trading -0.41% in the AM
  • Oil Trades Above $90 Amid Signs of Economic Expansion, Fuel Demand Growth  
  • COPPER: 440.80 +0.89% - trading -0.24% in the AM
  • Copper Rises on Speculation Stronger U.S. Growth May Boost Metals Demand
  • GOLD: 1,376.72 +0.01% - trading 0.30% in the AM
  • Gold Drops for a Fourth Day as Stronger Dollar Curbs Demand From Investors

OTHER COMMODITY NEWS:

  • Rubber Futures Advance to a Record as U.S. Economy Improves, Yen Weakens
  • Australian Floods Mean Asian Steelmakers May Pay 33% More for Coking Coal
  • Wheat Declines on Speculation Higher U.S. Acreage May Ease Supply Concern
  • China Rare Earths Leave Toxic Trail to Toyota Prius, Vestas Wind Turbines
  • Robusta Coffee Gains on Speculation Higher-Quality Beans in Short Supply
  • Zimbabwe Can Hold Two Diamond Auctions This Year Under Kimberley Process
  • Nickel May Drop to $22,509, According to Commerzbank: Technical Analysis
  • Palm Oil Advances Gains as Dry Weather Threatens Argentina Soybean Harvest
  • Cotton Output in India May Exceed Estimate on Bigger Crop Area, Board Says
  • Australian Floods Slow Start of Beef Processing in Queensland, Swift Says
  • Copper Output From Sumitomo Metal Smelter May Be Reduced on Maintenance

CURRENCIES:

  • EURO: 1.3183 -0.99% - trading -0.53% in the AM
  • DOLLAR: 80.258 +1.02% - trading +0.14% in the AM

EUROPEAN MARKETS:

  • European Markets: FTSE 100: +0.71%; DAX +1.15%; CAC 40: +0.89%
  • European indices have started the day on a firmer footing as yesterday's strong US ADP jobs report raises expectations for a supportive for todays non-farm payroll number.
  • Investors are still very much in buying mode and most sectors appear to be participating. A rebound in Basic Resource plays, plus ongoing strength in Oil are providing the main support in what has been a broad based move to the upside.
  • China has said it is willing to buy about €6B of Spanish public debt, according to Spanish newspaper El Pais.
  • Ireland would only be able to force losses onto holders of senior bank debt with the approval of the ECB, the main opposition party, Fine Gael, said today.  
  • UK Dec Services PMI 49.7 vs cons 53 and prior 53
  • Eurozone Nov Retail sales +0.1% y/y vs cons +2.2% and prior revised to +1.2% from +1.8%
  • Eurozone Dec Consumer Sentiment (11) vs cons (10) and prior revised (9.4)

ASIAN MARKTES:

  • Asian Markets: Nikkei +1.44%; Hang Seng +0.12%; Shanghai Composite (0.51%)
  • Japan rallied, but other Asian markets were mixed today.
  • Japan went up, with exporters leading the way on a weaker yen. JVC Kenwood soared 26% on an announcement it will raise equity capital.
  • Singapore +0.78%, Kim Eng Holdings was halted on reports that Maybank will offer to buy a 44% stake in a deal valuing the company at S$1.8B.
  • On a late recovery by miners and energy companies, Australia rose +0.21% slightly in light volumes.
  • Hong Kong +0.12%, with property developers extending yesterday’s gains, but mainland Chinese companies following China down. Chinese banks fell on a report that the country will not set a lending target for them this year. Li & Fung fell 2% on a midday report it will take over 490K sq ft in the base of the Empire State Building for an undisclosed price.
  • South Korea dipped -0.24%. Hyundai Motor rose 3% on raising its 2011 capex target 14% y/y.
  • Tokyo December office vacancies (13 bp) m/m, +82 bp y/y to 8.91%. 


THE HEDGEYE DAILY OUTLOOK - setup