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TODAY’S S&P 500 SET-UP – March 23, 2011

Despite a 16.9 % drop in the VIX over the past week, Egypt, Ireland and Portugal are vivid reminders today that the sovereign debt and geo-political risks are not going away.  As we look at today’s set up for the S&P 500, the range is 33 points or -1.30% downside to 1277 and +1.25% upside to 1310.

MACRO DATA POINTS:

  • 7 a.m.: Fed’s Fisher speaks in Berlin
  • MBA mortgage applications index rose 2.7% week ended March 18.  Purchases, refis also both up 2.7%
  • 10 a.m.: New home sales, est. 290k, up 2.1%, prior 284k, down 12.6%
  • 10:30 a.m.: DoE inventories
  • 11:30 a.m.: U.S. to sell $5b 56-day cash management bills
  • 12 noon: Bernanke to speak in San Diego   

TODAY’S WHAT TO WATCH:

  • Goldman Chairman Blankfein to be called by U.S. prosecutors to testify as government witness at Raj Rajaratnam’s insider-trading trial as early as this week
  • Allies prepare to attack Qaddafi’s ground forces as the U.S. and its partners try to resolve disputes over who will take over command
  • AirTran holders vote on Southwest takeover offer
  • NFLX website crashes, leaving more than 20m subscribers unable to order films, service later restored
  • Syrian forces clash with protesters killing four people

PERFORMANCE:


The only two sectors that are positive on both TRADE and TREND are Energy and Consumer Staples. 

  • One day: Dow (0.15%), S&P (0.36%), Nasdaq (0.31%), Russell 2000 (0.54%)
  • Month-to-date: Dow (1.70%), S&P (2.52%), Nasdaq (3.54%), Russell (1.80%)
  • Quarter/Year-to-date: Dow +3.81%, S&P +2.87%, Nasdaq +1.17%, Russell +3.19%
  • Sector Performance Industrials (0.80%), Consumer Disc (0.79%), Financials (0.53%), Energy (0.22%), Consumer Spls (0.14%), Tech (0.17%), Materials (0.23%), Healthcare (0.05%), Utilities +0.14%.  

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: -458 (-2375)  
  • VOLUME: NYSE 823.85 (-17.80%)
  • VIX:  20.21 -1.94% YTD PERFORMANCE: +13.86%
  • SPX PUT/CALL RATIO: 1.98 from 2.00 (-0.86%)

CREDIT/ECONOMIC MARKET LOOK:


Treasuries were mostly weaker for a fourth-straight session, though the long-end outperformed.

  • TED SPREAD: 21.98 -0.304 (-1.366%)
  • 3-MONTH T-BILL YIELD: 0.10%  
  • 10 Yr: 3.34 from 3.34     
  • YIELD CURVE: 2.66 from 2.67

COMMODITY/GROWTH EXPECTATION:

  • CRB: 356.45 +0.91% YTD: +7.11%  
  • Oil: 104.97 +1.82%; YTD: +12.94% (trading +0.39% in the AM)
  • COPPER: 431.30 +0.63%; YTD: -1.35% (trading +1.51% in the AM)  
  • GOLD: 1,426.43 -0.06%; YTD: +0.97% (trading +0.49% in the AM)  

COMMODITY HEADLINES FROM BLOOMBERG:

  • Thailand Planning Fewer Rice Harvests in Pest Fight Means Drop in Exports
  • Crude Oil Trades Near Two-Week High as Alliance Prepares Attacks in Libya
  • Copper Rises for Second Day as Inventory Orders Feed Shortfall Speculation
  • Gold Climbs as Middle East Turbulence and European Debt Crisis Fuel Demand
  • Coffee-Belt Drought in Vietnam May Ease in May on Rains, Forecaster Says
  • China May Match India as World's Biggest Gold Consumer on Investor Demand
  • Wheat Demand in Japan Not Hurt by Earthquake, Agriculture Ministry Says
  • Lead Futures in Shanghai Priced at 18,350 Yuan for First Day of Trading
  • Norwegian, Asian Fish Companies May Benefit From Japan's Radiation Scare
  • U.S. Bans Japan Milk, Fruit Imports From Areas Near Leaking Nuclear Plant
  • Global Dairy Prices May Drop as Record Rally Erodes Demand, Fonterra Warns
  • Palm Oil Production in Malaysia to Increase This Year, Central Bank Sayss

CURRENCIES:

  • EURO: 1.4218 -0.04% (trading -0.25%% in the AM)
  • DOLLAR: 75.434 +0.04% (trading +0.09% in the AM) 

EUROPEAN MARKETS:


European stocks are higher, led by Austria and the Netherlands.  Egypt fell 8.97% to lowest level since May 2009, as trading resumes following two-month suspension.

BOE minutes; BOE voted 6-3 to hold rate in March, Dale and Weale voted for +25 bps raise, Sentance +50 bps.

  • United Kingdom: +0.54%
  • Germany: +0.19%
  • France: +0.37%
  • Spain: +0.25%
  • Greece +0.20%
  • Italy: +0.35%
  • Portugal -1.43%

ASIAN MARKTES:

Asian markets were stronger, with the exception of Japan and South Korea.  Japan fell for first time in four days after levels of radioactive iodine unsafe for infants were reported in Tokyo.

  • Japan: -1.65%
  • Australia +0.19%
  • Singapore: +0.65%
  • Hang Seng: -0.14%
  • China: +1.00%
  • India: +1.21%
  • Taiwan: +0.44%
  • South Korea -0.07%

Howard Penney

Managing Director

THE HEDGEYE DAILY OUTLOOK - 3 23 2011 7 21 29 AM