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THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP - March 31, 2011


Now that the IMF is cutting their US GDP growth estimate for 2011 (to 2.8%), our call for Growth Slowing As Inflation Accelerates is being absorbed into the craws of consensus.  Dr. Copper remains bearish and broken with intermediate term TREND resistance (was longstanding support) = 4.38/lb.   As we look at today’s set up for the S&P 500, the range is 28 points or -1.75% downside to 1305 and 0.36% upside to 1333.

PERFORMANCE:


As of the close yesterday we have 8 of 9 sectors positive on TRADE and 9 of 9 sectors positive on TREND.  The XLF is the only sector to be broken on TRADE. 

THE HEDGEYE DAILY OUTLOOK - SECTOR VIEW

THE HEDGEYE DAILY OUTLOOK - BEST PERFORMING GLOBAL

THE HEDGEYE DAILY OUTLOOK - WORST PERFORMING GLOBAL

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: 1338 (+248)  
  • VOLUME: NYSE 899.14 (+11.78%)
  • VIX:  17.71 -2.48% YTD PERFORMANCE: -0.23%
  • SPX PUT/CALL RATIO: 1.49 from 1.73 (-13.94%)

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 21.32
  • 3-MONTH T-BILL YIELD: 0.10%
  • 10-Year: 3.47 from 3.50
  • YIELD CURVE: 2.67 from 2.69

MACRO DATA POINTS:

  • 8:30 a.m.: Jobless claims, est. 380k, prior 382k
  • 8:30 a.m.: USDA planting data
  • 8:30 a.m.: Net export sales (cotton, corn, soybeans, soy meal, soy oil, wheat)
  • 9:45 a.m.: Chicago Purchasing Manager, est. 69.7, prior 71.2
  • 9:45 a.m.: Bloomberg consumer comfort, prior (-48.9)
  • 10 a.m.: Freddie Mac 30-yr mortgage
  • 10 a.m.: Annual revisions, wholesale inventories
  • 10 a.m.: NAPM Milwaukee, prior 63.0
  • 10 a.m.: Factory orders, est. 0.5%, prior 3.1%
  • 10:30 a.m.: Fed’s Lacker to speak at 2011 credit symposium in Charlotte
  • 10:30 a.m.: EIA Natural gas storage change, est. (-1), prior (-6)
  • 12:30 p.m.: Fed’s Tarullo to speak at 2011 credit symposium in Charlotte
  • 2:05 p.m.: Fed’s Pianalto to speak on economic outlook, oil prices

WHAT TO WATCH:

  • Bullish sentiment among individual investors rose to 41.8% this week, reaching a 4-wk. high in American Assoc. of Individual Investors survey.
  • Standard & Poor's announced that following its recent downgrade of Greece's sovereign credit, its lowering our long-term counterparty credit ratings of four Greek banks
  • David Sokol, considered a candidate to replace Warren Buffett as head of Berkshire, resigned as it was disclosed he purchased stock in a company he later helped negotiate a takeover
  • WTO to rule on claims that Boeing received government subsidies
  • Irish Central Bank stress test results being released
  • Outside advisers to FDA will vote on safety of food dyes
  • Troops loyal to Muammar Qaddafi force Libyan rebels to retreat as the U.S., U.K. say they will consider arming opposition forces; Libya’s foreign minister resigned and flew to London
  • Google being investigated for tax evasion in China
  • Baseball’s Opening Day  

 

COMMODITY/GROWTH EXPECTATION

THE HEDGEYE DAILY OUTLOOK - daily commodity view

 

COMMODITY HEADLINES FROM BLOOMBERG:

  • Commodities Heading for Third Quarterly Advance on Recovery, Surging Crude
  • Wheat Demand Sustained by Japan as Grain Sought for East Coast After Quake
  • Crude Above $100 Approaches Economic Danger Zone on Libya: Energy Markets
  • Soybeans Gain on Speculation Lower U.S. Sowing, Brazil Rain May Cut Supply
  • Cocoa Falls to 11-Week Low on Speculation Ivory Coast Exports to Increase
  • Gold Heads for Longest Quarterly Winning Streak Since 1979 on Haven Demand
  • Food-Price Surge to Swamp Consumers With Inflation, According to Superfund
  • Copper May Advance Before Report on Manufacturing in China, Biggest User
  • Hedge Funds Cutting Bullish Bets May Show Commodity Drop: Chart of the Day
  • Aluminum Smelters in China Ramp Up Production as Country Ends Power Curbs
  • U.S. Detects Trace Amounts of Radiation in Milk, Poses No Threat to Health
  • World’s Biggest Shipping Lines Are Still Taking Cargoes to Tokyo Bay Ports

CURRENCIES

THE HEDGEYE DAILY OUTLOOK - daily currency view

EUROPEAN MARKETS

European markets trade mixed to lower with the periphery again in focus and particularly Ireland and Portugal; Austria, Greece and Italy are leading the way down.    

MACRO DATA POINTS:

  • UK Mar Nationwide house prices +0.5% vs con (0.1%)
  • Germany Feb retail sales +1.1% y/y vs con +1.8%
  • France Feb PPI +0.8% m/m vs con +0.7%
  • Germany Mar unemployment rate +7.1% vs con +7.2% (lowest since 1992)
  • Eurozone Mar preliminary CPI +2.6% y/y vs consensus +2.3% and prior +2.4% (fastest since October 2008)

THE HEDGEYE DAILY OUTLOOK - BEST PERFORMING EURO

THE HEDGEYE DAILY OUTLOOK - WORST PERFORMING EURO

ASIAN PACIFIC MARKTES:

The Asian markets turned in a stronger relative performance with the exception of China.  In Japan February housing starts +10.1% y/y vs consensus +7.2%. February construction orders +19.5% y/y.

THE HEDGEYE DAILY OUTLOOK - BEST PERFORMING ASIA

THE HEDGEYE DAILY OUTLOOK - WORST PERFORMING ASIA

MIDDLE EAST

THE HEDGEYE DAILY OUTLOOK - MIDEAST PERFORMANCE

THE HEDGEYE DAILY OUTLOOK - setup

Howard Penney

Managing Director