THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP - May 18, 2011


US stocks have been down for the last 3 days and the last 3 weeks – and after taking a good hard looking at the intermediate term TREND line of 1319 in the SP500, we should see another low-volume bounce to lower-long-term highs; resistance = 1340.  As we look at today’s set up for the S&P 500, the range is 17 points or -0.75% downside to 1319 and 0.53% upside to 1336.

SECTOR AND GLOBAL PERFORMANCE


THE HEDGEYE DAILY OUTLOOK - levels 518

THE HEDGEYE DAILY OUTLOOK - daily sector view

THE HEDGEYE DAILY OUTLOOK - BEST PERFORMING GLOBAL

THE HEDGEYE DAILY OUTLOOK - WORST PERFORMING GLOBAL

 

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: -483 (+584)  
  • VOLUME: NYSE 971.43 (+7.07%)
  • VIX:  17.55 -3.78% YTD PERFORMANCE: -1.13%
  • SPX PUT/CALL RATIO: 1.89 from 1.88 (+0.77%)

 

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 22.96
  • 3-MONTH T-BILL YIELD: 0.04%
  • 10-Year: 3.12 from 3.15
  • YIELD CURVE: 2.57 from 2.61 

 

MACRO DATA POINTS:

  • MBA mortgage applications index up 7.8% week ended May 13; Refis up 13%, largest gain in 10 weeks;  Purchases fell 3.2%; Avg. 30-yr fixed rate 4.60%, lowest since end Nov., vs 4.67% prior week
  • 10:30 a.m.: DoE Inventories
  • 11:30 a.m.: U.S. to sell $5b 56-day cash mgmt bills
  • 2 p.m.: FOMC Minutes
  • 7 p.m.: Fed’s Bullard speaks in New York  

WHAT TO WATCH:

  • U.S. Treasury Secretary Geithner said the IMF needs to name an interim leader because Strauss-Kahn is “obviously not in a position” to run the fund; Europe seeks to keep top position
  • EU Commission completes quarterly review of EU/IMF financial assistance program to Ireland; authorizes the release of the second installment
  • Bullish sentiment decreases to 45.6% from 51.1% in the latest US Investor's Intelligence poll
  • Banking groups opposed to simpler mortgage forms - Bloomberg
  • Fed wants to subject US banks to annual stress tests - FT
  • Russian President Dmitry Medvedev says he doesn’t exclude that some oil companies are colluding to increase prices for gasoline on the domestic market.
  • Google’s First Bond Sale Drew Orders Exceeding $10b: WSJ 

 

COMMODITY/GROWTH EXPECTATION

THE HEDGEYE DAILY OUTLOOK - daily commodity view

 

COMMODITY HEADLINES FROM BLOOMBERG:

  • Milk Rally Causing Higher Prices at Wal-Mart Also Spurring Gains in Output
  • Commodities Rebound on Outlook for Stronger Demand From Emerging Markets
  • Oil Rises From Three-Month Low as Supplies of Cushing Crude, Gasoline Drop
  • Copper Climbs to One-Week High as Commodities, Equities Rebound From Drops
  • Corn Advances for Fifth Straight Day as Wet Weather May Delay U.S. Seeding
  • Gold Gains for First Day in Four on Weaker Dollar, European Debt Concern
  • Drought in China’s Hubei Withers Rapeseed, Wheat Crops, Delays Plantings
  • Oil, Gold Will Drive Rebound in Commodities on Shortages, JPMorgan Says
  • Coffee Rises on Concern About Limited Supplies; Sugar, Cocoa Prices Gain
  • Silver May Slide 16% After Breaching 100-Day Average: Technical Analysis
  • Drought Spells EU Power Squeeze as Nuclear Reactors Halt: Energy Markets
  • Copper Demand From China’s Cable Makers May Double as Cities, Grids Expand
  • Bunge Offers $138 Million for Tully Sugar, Above Louis Dreyfus-Backed Bid
  • India Shipping to Gain From Japan $30 Billion Steel Bill: Freight Markets

CURRENCIES

THE HEDGEYE DAILY OUTLOOK - daily currency view

EUROPEAN MARKETS

  • UK Mar ILO unemployment rate +7.7% vs consensus +7.8% and prior +7.8%; UK Apr claimant count +12.4k vs consensus unchanged
  • BOE keeps 6-3 vote in May to hold rates at record low
  • Greek Banks Surge as ECB Officials Rule Out Debt Restructuring
  • Irish Household Wealth Rises 6% in Q4 2010 , Central Bank Says


THE HEDGEYE DAILY OUTLOOK - BEST PERFORMING EURO

THE HEDGEYE DAILY OUTLOOK - WORST PERFORMING EURO

ASIAN MARKETS

  • Asia was strong overnight
  • Vietnam was a negative divergence down 2.03%
  • Japan March tertiary activity index (6.0%) m/m – the biggest drop in 22 years -- to 93.5.

THE HEDGEYE DAILY OUTLOOK - BEST PERFORMING ASIA

THE HEDGEYE DAILY OUTLOOK - WORST PERFORMING ASIA

MIDDLE EAST

THE HEDGEYE DAILY OUTLOOK - MIDEAST PERFORMANCE

Howard Penney

Managing Director