THE HEDGEYE DAILY OUTLOOK
TODAY’S S&P 500 SET-UP - April 25, 2011
The Inflation trade remains in place; US Dollar down (down 13 of the last 17 weeks); continued signs of growth slowing with copper down -1.2% this morning (bearish TREND); while monetary inflation skyrockets (gold and silver hitting new highs). As we look at today’s set up for the S&P 500, the range is 20 points or -1.37% downside to 1319 and 0.12% upside to 1339.
SECTOR AND GLOBAL PERFORMANCE
The Financials remain the only sector broken on both TRADE and TREND.
EQUITY SENTIMENT:
- ADVANCE/DECLINE LINE: 952 (-1033)
- VOLUME: NYSE 812.78 (-15.44%)
- VIX: 14.69 -2.52% YTD PERFORMANCE: -17.64%
- SPX PUT/CALL RATIO: 1.60 from 2.17 (-26.33%)
CREDIT/ECONOMIC MARKET LOOK:
- TED SPREAD: 22.30
- 3-MONTH T-BILL YIELD: 0.06%
- 10-Year: 3.42 from 3.43
- YIELD CURVE: 2.74 from 2.74
MACRO DATA POINTS:
- 10 a.m.: New Home Sales, est. 280k (up 12%), prior est. up 250k (down 16.9%)
- 10:30 a.m.: Dallas Fed Manufacturing, est. 13.4, prior 11.5
- 11 a.m.: Export inspections, grains
- 11:30 a.m.: U.S. to sell $29b 3-mo., $27b 6-mo. bills
- 4 p.m.: Crop progress (winter wheat, cotton, corn)
WHAT TO WATCH:
- Average pump price climbed 11.5c to $3.88 thru April 22: Lundberg survey. Obama said last week a task force will examine if oil, gas prices driven higher by market manipulation.
- Nike (NKE) may be poised to climb as it works to control rising materials and labor costs, Barron’s
- China’s 2011 trade surplus may narrow to 2% of GDP because of rising commodity prices, Reuters says, citing a report from the State Council’s Development Research Center.
COMMODITY/GROWTH EXPECTATION
COMMODITY HEADLINES FROM BLOOMBERG:
- Silver Surges to All-Time High as Investors Seek Protection From Inflation
- Crude Oil in New York Rises a Fourth Day as Middle East Violence Escalates
- Copper Drops in New York on Signs of Ample Supplies in China, Biggest User
- Palm Oil Declines as Lower Malaysian Exports Threaten to Boost Inventories
- Corn Advances as Rains Delay Seeding in U.S.; Wheat Jumps to 2-Month High
- China's Corn Imports May Expand This Year to 2 Million Tons, Baize Says
- Rubber in Tokyo Declines as Demand May Weaken on Reduced Car Production
- Hedge Funds Bullish on Natural Gas as Nuclear Output Falls: Energy Markets
- Corn, Soybeans May Rise as Cold, Weather Slows U.S. Seeding, Survey Shows
- India Gold Imports May Fall for Third Month on Prices, Industry Group Says
- Tsunami Quickens ‘Terminal Decline’ of Northern Japan’s Fishing Industry
- Most China Aluminum Capacity Lacks State Approval, Business News Reports
- Corn Seen Topping Wheat on Demand, Raising Tyson's Costs, Helping Syngenta
CURRENCIES
EUROPEAN MARKETS
- European markets are closed in observance of the Easter holiday
ASIA PACIFIC MARKTES:
- Asian stocks were mixed overnight on earnings concerns and China declined on increased inflation concerns.
- Japan March corporate services price index +0.4% m/m, (1.2%) y/y.
- Japan March supermarket comps +0.3% y/y.
- Hong Kong’s market is closed for a holiday.
MIDDLE EAST
Howard Penney
Managing Director
