01/13/11 08:07 AM EST

THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP - January 13, 2011

Equity futures remain close to fair value in what has been a quiet morning as we await fresh MACRO catalysts ahead of the earnings season.

MACRO DATA POINTS:

8:30 a.m.: Initial jobless claims, January 8, est. 410k, continuing claims est. 4088k
8:30 a.m.: Producer price index, December, M/m est. 0.8%, ex. food and energy est. 0.2%
8:30 a.m.: U.S. trade balance, November, est. -$40.5b
Net export sales (cotton, corn, soy meal, soybeans, soy oil, wheat), Jan. 6
10:30 a.m.: EIA Natural gas storage change, Jan. 7, est. -149
1 p.m.: U.S. sells $13b 30-yr bonds
1 p.m.: Fed Chairman Ben Bernanke speaks at FDIC panel on small business lending

TODAY’S WHAT TO WATCH:

Jury selection begins for Mattel vs MGA Entertainment trial over the origins of its rival’s Bratz dolls. Mattel’s $100m verdict was thrown out on appeal last year
Drug makers, led by Pfizer, pushing for U.S. guidelines to let them post more tweets and online videos without violating marketing rules for print, radio and television
AIG said it is set to issue 75m warrants to shareholders by Jan. 19 as it works to repay the $182.3b U.S. rescue
U.S., France, Germany and the U.K. need to control their spending on pensions and health care to keep their debt burdens stable over the long term - according to Moody’s
Alliance Bernstein Holding LP (AB) CFO John Howard to leave. Edward Farrell named interim CFO
American Capital Agency (AGNC) filed for 18m-Shr secondary; sees EPS for Qtr ex items >$1.20 vs est. $1.21
Blackboard (BBBB) completed acquisition of Presidium; sees 1Q adj. EPS 24c, unclear how compares with est. 34c
Mercury Computer Systems (MRCY) acquired RF Maker LNX for $31m upfront
Universal American Financial (UAM) sees year sales $5.65b vs est. $5.68b

PERFORMANCE:

One day: Dow +0.72%, S&P +0.90%, Nasdaq +0.75%, Russell 2000 +0.83%
Last Week: Dow +0.84%, S&P +1.10%, Nasdaq 1.90%, Russell +0.53%
Month-to-date: Dow +1.54%, S&P +2.25%, Nasdaq +3.18%, Russell +2.26%
Sector Performance - BULLISH (EVERY SECTOR IS POSITIVE) - Financials +1.7%, Energy +1.2%, Tech +0.9%, Materials +0.9%, Industrials +0.9%, Consumer Spls +0.8%, Utilities +0.5%, Healthcare +0.5%,Telecom +0.5%, Consumer Disc +0.3%

EQUITY SENTIMENT:

CREDIT/ECONOMIC MARKET LOOK:

Treasuries were weaker today with the pickup in risk appetite. However, some support came from a strong $21B auction of 10-year notes.

COMMODITY/GROWTH EXPECTATION:

CRB: 334.88 +1.03% - up over 3% so far this week
Oil: 91.86 +0.82% - trading -0.28% in the AM
Oil rose for a second day, as investors’ demand for riskier assets gained with advancing equity markets.
COPPER: 441.15 +1.44% - trading -0.82% in the AM
Copper Slides as World Bank Predicts Weakening of Chinese Economic Growth
GOLD: 1,383.70 +0.10% - trading -0.36% in the AM
Gold Buying Shows RBI Losing `Never Ending' Inflation Battle: India Credit

OTHER COMMODITY NEWS:

CURRENCIES:

EUROPEAN MARKETS:

FTSE 100: (0.17%); DAX: +0.02%; CAC 40: +0.41% (as of 7:30 EST)
European markets trade mixed with peripheral European markets again leading gains ahead of more peripheral debt sales and the uneventful interest rate decisions at both the BOE and ECB.
Spain up 2.6% announced a successful 5-year auction, with yields significantly above the previous auction and market participants await the results of Italy's debt auction.
Advancing and declining sectors are even at 9-9, with banks +3% the best performers while basic resources down 2% are leading the decliners.
France Dec final CPI +2% y/y vs con +1.9%
UK Nov Ind Prod +3.3% y/y and con +3.4%
UK Nov Manf Prod +5.6% y/y vs con +5.3%

ASIAN MARKTES:

Asian markets rose today on gains overseas and a successful bond auction in Portugal.
Australia rose 1.5%, as the Queensland floods’ impact was less damaging than feared for major insurers.
Megabanks followed their American peers higher, leading Japan to up 0.73%. But the rise was limited when core machinery orders came in well below expectations. Japan November core machinery orders (3.0%) m/m vs survey +1.6%. Sumitomo Trust & Banking and Chuo Mitsui Trust Holdings rose 5% each when an executive said the combined entity may offer a higher dividend payout ratio than the individual banks do.
HSBC was the biggest lift for Hong Kong for the second day in a row. Tsingtao Brewery, seen as having margins that will be hurt as food prices go up, fell 3%.
China increased slightly on strength in oil stocks. Sinopec and Petrochina put on 2% and 1%, respectively. Software companies did well when China’s state council confirmed long-held expectations that it will promote the software and integrated circuit industries.
South Korea ended with a small loss when the Bank of Korea surprised people by raising rates 25 bp to 2.75% in a bid to fight inflation. Financials rose.

CHART OF THE DAY: French Fry Fever