THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP - January 18, 2011


Equity futures are trading mixed with the Nasdaq set to open lower following yesterday's news that Steve Jobs will take a medical leave of absence as the company is set to report earnings after the close.  As we look at today’s set up for the S&P 500, the range is 22 points or -1.26% downside to 1277 and +0.45% upside to 1299.

 

 MACRO DATA POINTS:

  • 7:45 a.m.: ICSC weekly sales
  • 8:30 a.m.: Empire Manufacturing, est. 13.00, prior 10.57
  • 9 a.m.: Net long-term TIC Flows, est. $40.0b, prior $27.6b
  • 10 a.m.: NAHB Housing market index, est. 17, prior 16
  • 11 a.m.: Export inspections (grains)
  • 11:30 a.m.: U.S. to see $29b in 3-mo., $28b in 6-mo. bills
  • 5 p.m.: ABC consumer confidence

TODAY’S EARNINGS TO WATCH:

  • Delta Air Lines (DAL) 7:30 a.m., $0.24
  • TD Ameritrade Holding (AMTD) 7:30 a.m., $0.25
  • Fastenal (FAST) 7:50 a.m., $0.45
  • Citigroup (C) 8 a.m., $0.08
  • Forest Laboratories (FRX) 8 a.m., $0.98
  • McMoRan Exploration Co (MMR) 8 a.m., $(0.28)
  • Charles Schwab (SCHW) 8:45 a.m., $0.11 (tentative)
  • Cree (CREE) 4 p.m., $0.58
  • International Business Machines (IBM) 4:08 p.m., $4.08
  • Western Digital (WDC) 4:15 p.m., $0.58
  • Apple (AAPL) 4:30 p.m., $5.39
  • Fulton Financial (FULT) 4:30 a.m., $0.16
  • Linear Technology (LLTC) 5 p.m., $0.58

PERFORMANCE:

  • One day: Dow +0.47%, S&P +0.74%, Nasdaq +0.73%, Russell +0.86%
  • Last Week: Dow +0.96%, S&P +1.71%, Nasdaq 1.93%, Russell +2.51%
  • Year-to-date: Dow +1.81%, S&P +2.83%, Nasdaq +3.86%, Russell +3.05%
  • Sector Performance - (8 sectors positive and 1 flat) - Financials +1.61%, Energy +1.08%, Tech +0.89%, Consumer Discretionary +0.61%, Industrials +0.47%, Utilities +0.41%, Materials +0.23%, Healthcare +0.12% and Consumer Staples (0.00%).

  EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: 461 (+732)  
  • VOLUME: NYSE 1059.74 (14.61%)
  • VIX:  15.46 +5.67% YTD PERFORMANCE: -12.90%
  • SPX PUT/CALL RATIO: 1.46 from 1.39 (+4.97%)

CREDIT/ECONOMIC MARKET LOOK:


Treasuries were little changed, but tempered slightly weaker as equities rose

  • TED SPREAD: 15.81
  • 3-MONTH T-BILL YIELD: 0.15%     
  • YIELD CURVE: 2.76 from 2.75

COMMODITY/GROWTH EXPECTATION:

  • CRB: 333.06 +0.02% (last week: +2.82%)  
  • Oil: 91.02 -0.57% - trading +0.56% in the AM (last week: +3.99)
  • Crude Oil Trades Near a 27-Month High After IEA Increases Demand Forecast
  • COPPER: 438.45 -0.62% - trading +1.20% in the AM (last week: +3.02%)
  • Copper rally on supply shortfall
  • GOLD: 1,360.97 +0.14% - trading +0.55% in the AM (last week: -0.65%)
  • Gold Advances as Europe Debt Concern, Price Decline Spur Investor Demand

OTHER COMMODITY NEWS:

  • Food Prices Causing Riots in Africa Stoke Record U.S. Farm Economy Growth
  • Wheat Advances, Corn Reaches 18-Month High on Rising Demand, Lower Stocks
  • Nickel Rises to Eight-Month High on Stronger Chinese Usage; Copper Gains
  • Cocoa Rises After EU Imposes Ivory Coast Sanctions; Sugar, Coffee Advance
  • Hedge-Fund Bets on Costlier Feeder Cattle Increase to Highest Since 2006
  • Soybeans, Palm Oil to Extend Rally on Tight Supply, India's Top Buyer Says
  • Coal Prices Reach Two-Year High as Flooding in Australia Curbs Production
  • Rubber Futures Decline From Record as China May Raise Rates to Cool Prices
  • Mitsui Mining to Cut Zinc Output on Maintenance Shutdown at Top Smelter
  • Coal's China-Australia Discount at 8-Month High on Floods: Energy Markets
  • Gold Sold in Tokyo Vending Machines Competes with Drinks, Sweets, Lingerie
  • Europe Commodity Day Ahead: First Gold Vending Machines Installed in Tokyo

CURRENCIES:

  • EURO: 1.3295 -0.69% - trading +0.90% in the AM
  • DOLLAR: 79.337 +0.22% - trading -0.61% in the AM

EUROPEAN MARKETS:

  • European Markets: FTSE 100: +1.08%; DAX: +0.95%; CAC 40: +0.81% (as of 07:30 ET)
  • European markets opened higher as positive corporate earnings helped sentiment.
  • The periphery remained in focus as European Finance Minister meet today with uncertainty remaining as to whether there will be any agreement to increase the EuroZone rescue fund.
  • Reports Russia may resume buying Spanish debt and a constructive Spanish bill auction lead to indices extending gains, though the UK lagged after disappointing UK inflation data pared gains.
  • All sectors other than healthcare (0.3%) trade higher led by banks +2.6%, media +2.0% and autos +1.6%.

ECONOMICS:

  • UK Dec CPI +3.7% y/y vs consensus +3.3% and prior +3.3%
  • UK Dec RPI +4.8% y/y vs consensus +4.8% and prior 4.7%
  • Germany Jan ZEW Index +15.4 vs consensus +6.8 and prior +4.3 - German Jan ZEW current situation 82.8 vs consensus 83.8 and prior 82.6

ASIAN MARKTES:

  • Asian Markets: Nikkei +0.15%; Hang Seng (0.01%); Shanghai Composite +0.09%
  • Asian stocks were mixed today, as investors waited to see Wall Street’s reaction to Apple (AAPL) CEO Steve Jobs’s taking a medical leave of absence.
  • Australia rose +0.81, with banks and retail stocks finding favor.
  • Japan erased early losses to close slightly higher.
  • China finished flat, with strong earnings from Industrial Bank and China Everbright Bank despite downward pressure resulting from a report that the country has cut banks’ lending targets 10% for the year.
  • Chalco jumped 5% in active trading on forecasting a return to profit for last year, but Hong Kong finished flat. Local property developers extended yesterday’s gains. Hutchison Whampoa fell 2% on announcing a plan to spin off its ports business.
  • Tech stocks advanced, but could not bring South Korea closed down 0.16%
  • Japan revised November industrial output +1.0% m/m, matching preliminary figure. November capacity utilization index +1.6% m/m to 86.7. December department-store sales (1.5%) y/y. Tokyo December department-store sales (0.3%) y/y..

THE HEDGEYE DAILY OUTLOOK - 1 18 2011 8 25 29 AM


Did the US Economy Just “Collapse”? "Worst Personal Spending Since 2009"?

This is a brief note written by Hedgeye U.S. Macro analyst Christian Drake on 4/28 dispelling media reporting that “US GDP collapses to 0.7%, the lowest number in three years with the worst personal spending since 2009.”

read more

7 Tweets Summing Up What You Need to Know About Today's GDP Report

"There's a tremendous opportunity to educate people in our profession on how GDP is stated and projected," Hedgeye CEO Keith McCullough wrote today. Here's everything you need to know about today's GDP report.

read more

Cartoon of the Day: Crash Test Bear

In the past six months, U.S. stock indices are up between +12% and +18%.

read more

GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist

“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.

read more

Exact Sciences Up +24% This Week... What's Next? | $EXAS

We remain long Exact Sciences in the Hedgeye Healthcare Position Monitor.

read more

Inside the Atlanta Fed's Flawed GDP Tracker

"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.

read more

Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

read more

People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

read more

UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more