THE HEDGEYE DAILY OUTLOOK

THE HEDGEYE DAILY OUTLOOK

 

TODAY’S S&P 500 SET-UP - May 24, 2011

 

After seeing the SP500 get immediate-term TRADE oversold yesterday, we covered our short SPY position. This morning we’ll see another low-volume bounce in global equities - prepare to manage risk proactively into strength as this week is loaded with nasty US Housing catalysts.  As we look at today’s set up for the S&P 500, the range is 20 points or -0.18% downside to 1315 and 1.30% upside to 1335.

 

SECTOR AND GLOBAL PERFORMANCE

 

<CHART1>

THE HEDGEYE DAILY OUTLOOK - bpgmytd

THE HEDGEYE DAILY OUTLOOK - wpgmytd

 

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: -1784 (-883)  
  • VOLUME: NYSE 866.82 (-12.65%)
  • VIX:  18.27 +4.82% YTD PERFORMANCE: +2.93%
  • SPX PUT/CALL RATIO: 2.13 from 2.08 (+2.40%)

 

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 20.06
  • 3-MONTH T-BILL YIELD: 0.06% +0.01%
  • 10-Year: 3.13 from 3.15
  • YIELD CURVE: 2.58 from 2.60 

 

MACRO DATA POINTS:

  • 8:25 a.m.: Fed’s Duke speaks on financial education in Boston
  • 9:50 a.m.: Fed’s Hoenig, Plosser speak in Phila.
  • 10 a.m.: New home sales, est. 300k (0.0%), prior 300k
  • 10 a.m.: Richmond Fed manufacturing index
  • 11:30 a.m.: U.S. to sell $28b 4-wk bills
  • 1 p.m.: U.S. to sell $35b 2-yr notes
  • 1:20 p.m: Fed’s Bullard speaks in Missouri
  • 4:30 p.m.: API inventories    

WHAT TO WATCH:

  • China appeals WTO ruling on car tires - Reuters
  • Moody's reviews ratings of selected UK financial institutions for possible downgrade
  • BP-Rosneft deal finished for the moment, says Russian Energy Minister Sergei Shmatko - WSJ
  • Weekly USDA crop report indicates 32% of winter wheat crop is in good or excellent condition; Compares to 32% last week and 66% in the same week last year.
  • Eurocontrol says it expects to cancel up to 500 more flights today - NYT 
  • At least 20,000 people have fled Sudan's Abyei region after northern army seized the area over the weekend, UN says 
  • China ratings agency Dagong cuts UK credit rating to A+ with neg outlook on "deteriorating debt repayment ability"

     

COMMODITY/GROWTH EXPECTATION

 

THE HEDGEYE DAILY OUTLOOK - dcommv

 

COMMODITY HEADLINES FROM BLOOMBERG:

  • Goldman, Morgan Stanley Bullish on Commodities, Raise Oil Forecasts 20%
  • corn Production in China Climbing to Record Set to Limit Imports This Year
  • Oil Rises in New York After Biggest Loss in Week; Goldman Raises Forecast
  • Copper Advances as Goldman Sachs Advises Investors to Buy; Zinc Increases
  • Soybeans Gain as Demand for Commodities Used in Foods, Fuel May Strengthen
  • Sugar Climbs as EU May Allow More Duty-Free Imports; Coffee Prices Gain
  • Gold May Climb for Third Day as European Debt Crisis Buoys Haven Demand
  • Copper to Be Volatile, Will Not ‘Collapse,’ JPMorgan’s Schirmeister Says
  • India May Halt Potash Imports Without Price Accord, Farming Group Says
  • Feed-Grain Demand in South Korea May Decline 10% After Cattle, Hogs Culled
  • Palm Oil Advances as Soybeans Gain on Delays to Plantings in U.S. Midwest
  • Oil Supplies Sink in Survey as U.S. Floods Curtail Imports: Energy Markets
  • G8-Led Group Agrees to Biofuel Output Guidelines to Combat Global Warming

 

CURRENCIES

 

THE HEDGEYE DAILY OUTLOOK - dcurrv

 

EUROPEAN MARKETS

  • Germany leads region to another higher low on a decent IFO print; Sweden +0.6% (we bought it yesterday on the blowoff)
  • France May Business climate 107 vs consensus 109 and prior revised to 109 from 110
  • Germany Q1 final GDP +1.5% q/q and prior +1.5%; Germany Q1 final GDP +5.2% y/y and prior +5.2%
  • Greece will default if it does not get next EU/IFM bailout tranche -- Greece Financial Minister, as cited by Reuters

THE HEDGEYE DAILY OUTLOOK - bpem1

THE HEDGEYE DAILY OUTLOOK - wpem1

 

ASIAN MARKETS

  • ASIA: wet Kleenex bounce for markets closing up with China down again, India down to -12.3% YTD and Vietnam collapsing (down -17.4% since May 4!)

 

THE HEDGEYE DAILY OUTLOOK - bpam1

THE HEDGEYE DAILY OUTLOOK - wpam1

 

MIDDLE EAST

 

THE HEDGEYE DAILY OUTLOOK - me

 

Howard Penney

Managing Director


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