THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP - January 7, 2011


As we look at today’s set up for the S&P 500, the range is 16 points or -0.77% downside to 1264 and 0.48% upside to 1280. Equity futures are trading below fair value in a continuation of Thursday's retreat prompted by disappointing Dec retail sales data and ahead of today's employment data and Bernanke testimony to the Senate Budget Committee.

 

MACRO DATA POINTS:

  • 8.30am, Payroll figures: Change in nonfarm payrolls, est. 150k, prior 39k  Change in private payrolls, est. 175k, prior 50k  Change in manufacturing payrolls, est. 5k, prior (-13k)
  • Unemployment rate, est. 9.7%, prior 9.8%
  • 9.15am, NY Fed’s Tracy to speak in Hartford, Conn.
  • 9.30am, Fed’s Bernanke to Testify Before Senate Budget Panel
  • 11am, Fed to purchase $6b-$8b notes/bonds
  • 3pm, Consumer Credit, Nov., est. $0.5b
  • 4.30pm, Fed’s Evans Speaks on Monetary Policy in Denver
  • 4.30pm, NY Fed’s McAndrews Speaks on Panel in Denver

TODAY’S WHAT TO WATCH:

  • Best Buy will offer its take on the holiday season with a sales release pre-mkt
  • Blackstone in exclusive talks to buy London’s Chiswick Park office complex for ~$740m including debt, the Financial Times reports, without saying where it got the information
  • Obama names William Daley as his White House chief of staff as part of a series of moves to keep the administration’s focus on the economy, improve relations with business and deal with a divided government.
  • Today Obama will name Gene Sperling to lead National Economic Council.
  • KB Home will provide a window into the housing market as it reports 4Q results.
  • Amgen (AMGN) and Xencor will collaborate to develop an
  • autoimmune disease antibody
  • Borders Group (BGP) US in talks with Jefferies on restructuring, CNBC says, citing WSJ
  • Immucor (BLUD) 2Q profit, rev. beat ests
  • Liz Claiborne (LIZ) preliminary 2H profit missed goal
  • Schnitzer Steel Industries Inc. (SCHN) 1Q rev. missed est.
  • Shaw Group (SHAW) 1Q rev. missed est.
  • Volcano (VOLC) rated new outperform at William Blair
  • Volterra Semiconductor (VLTR) preliminary 4Q EPS below ests., forecast, est. -131

PERFORMANCE: ALL 9 SECTORS BULLISH ON TRADE & TREND

  • One day: Dow (0.22%), S&P (0.21%), Nasdaq +0.28%, Russell 2000 (0.46%)
  • Last Week: Dow +0.03%, S&P +0.07%, Nasdaq (-0.48%), Russell (-0.67%)
  • Month/Quarter/Year-to-date: Dow +1.03%, S&P +1.29%, Nasdaq +2.15%, Russell +0.99%
  • Sector Performance - BEARISH (Only 3 sectors positive) - Energy (0.95%), Cons. Disc (0.61%), Financials (0.66%), Materials (0.52%), Cons. Spls (0.34%), Industrials (0.17%), Utilities +0.10%, Healthcare +0.41%, Tech +0.58%        

 EQUITY SENTIMENT: MIXED

  • ADVANCE/DECLINE LINE: -657 (-1283)  
  • VOLUME: NYSE 1093.30 (+4.83%)
  • VIX:  17.40 +2.23% YTD PERFORMANCE: -1.97%
  • SPX PUT/CALL RATIO: 0.86 from 1.81 (-52.57%)  

CREDIT/ECONOMIC MARKET LOOK:


Treasuries were stronger yesterday

  • TED SPREAD: 16.62 0.304 (1.866%)
  • 3-MONTH T-BILL YIELD: 0.15% +.01%    
  • YIELD CURVE: 2.76 from 2.79

COMMODITY/GROWTH EXPECTATION:  

  • CRB: 325.07 -1.25%
  • Oil: 88.38 -2.13% - trading +0.37% in the AM
  • In early trading crude oil rebounds from lowest in three weeks
  • COPPER: 432.95 -1.78% - trading -1.49% in the AM
  • copper falls in London on speculation of more tightening
  • GOLD: 1,373.15 -0.22% - trading -1.1% in the AM
  • Gold is right down to our intermediate term TREND line of support this morning

OTHER COMMODITY NEWS:

  • India to Boost Oil-Palm Plantation Area to Reduce $8.4 Billion Import Bill
  • Gold in Euros to Outperform Gold in Dollars, ABN Says: Technical Analysis
  • Queensland Towns Watch Rivers Rise as Waters Threaten Livestock, Property
  • Wheat Heads for Weekly Drop on Speculation USDA May Lower Exports Estimate
  • Germany Blocks Farms' Meat, Egg Sales After Finding Dioxin in Animal Feed
  • Hainan Rubber Doubles in Shanghai Debut on Strong Demand, Growth Outlook
  • Palm Oil Declines as Rally to 34-Month High Increases Soybean Oil Appeal
  • Japan Minister Urges Lower Rice Tariff, Free Trade, Talks With North Korea
  • Cotton Output in Australia May Be Cut 500,000 Bales on Flood, FCStone Says
  • Copper Stockpiles in Shanghai Advance to Six-Month High; Zinc at Record
  • Sugar May Rise Next Week on Speculation Demand Will Increase, Survey Shows

CURRENCIES:

  • EURO: 1.3028 -1.18% - trading -0.38% in the AM
  • DOLLAR: 80.847 +0.73% - trading +0.17% in the AM

EUROPEAN MARKETS:

  • European Markets: FTSE 100: (0.29%); DAX: 0.17%; CAC 40: (0.43%)
  • European markets mainly trade lower with major indices reversing modest opening gains as investors focus on US Dec nonfarm payrolls data due later in the session.
  • Peripheral European debt worries persist and weighed on bond spreads and the euro.   Spain and Portugal down 1.30% and 1.14%, respectively
  • Declining sectors lead advancers 16-2 with oil & gas and banks leading fallers down close to (1%) and auto's up +0.3%, leading gainers.
  • Germany Nov preliminary retail sales +2.0% y/y vs consensus +3.2%, (2.4%) m/m vs consensus +0.1%
  • UK SMMT Dec new car registrations (18.0%) y/y, to 123,817 units, forecasts market to decline by (5%) in 2011 to 1.93M units
  • Eurozone Q3 GDP 1.9% y/y vs consensus 1.9% and prior 1.9% Eurozone Q3 GDP 0.3% q/q vs consensus 0.4% and prior 0.4%
  • Germany Nov Industrial Output (0.7%) m/m vs consensus (0.2%) and prior revised +3.0%
  • Eurozone Nov Unemployment 10.1% vs consensus 10.1% and prior 10.1%

ASIAN MARKTES:

  • Asian Markets: Nikkei +0.1%; Hang Seng (0.4%); Shanghai Composite +0.52%
  • More Asian markets fell than rose today as investors awaited US non-farms payrolls data coming later.
  • Banks led China up 0.52%, though it finished well of its intraday high. But metals stocks fell late in the day on renewed tightening fears.
  • South Korea rose 0.41%, but Samsung Electronics lost 1% on saying its Q4 profit probably fell.
  • Japan +0.11 traded in a very tight range all day. Carmakers rose on recovering sales in the US and a weaker yen.
  • Australia declined -0.42%, with miners and banks going down, partially offset by higher industrial and consumer issues.
  • Hong Kong traded -0.42%. 
  • Indonesia’s stocks fell 2.81%, driving the benchmark index to its biggest two-day loss in more than seven months.  Concerns the central bank has fallen behind regional neighbors in taking action to curb inflation.
  • India down 2.44%

 

THE HEDGEYE DAILY OUTLOOK - setup


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