THE HEDGEYE DAILY OUTLOOK

THE HEDGEYE DAILY OUTLOOK

 

TODAY’S S&P 500 SET-UP - May 27 2011

 

UST Bond Yields showing how bullish people are on the Growth Slowing trade this morning (bullish for bonds). 2s are immediate-term TRADE oversold at 0.48% and 30s at 4.22%, but this is really starting to look like May-July of 2010 in the bond market – they can run.

 

The Hedgeye favorite Macro long positions remain TLT and FLAT – and we bought our GLD back yesterday. If Growth Slowing and Deflating The Inflation (our Macro Themes) become consensus by mid-summer, all 3 of these positions should hold up just fine. Remember Gold acts best when real-interest rates imply negative yields.

 

As we look at today’s set up for the S&P 500, the range is 18 points or -1.18% downside to 1310 and 0.17% upside to 1328.

 

SECTOR AND GLOBAL PERFORMANCE

 

THE HEDGEYE DAILY OUTLOOK - levels

THE HEDGEYE DAILY OUTLOOK - bpgmytd

THE HEDGEYE DAILY OUTLOOK - wpgmytd

 

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: 1261 (+327)  
  • VOLUME: NYSE 846.11 (11.98%)
  • VIX:  16.09 -5.74% YTD PERFORMANCE: -9.35%
  • SPX PUT/CALL RATIO: 1.76 from 1.30 (+30.00%)

 

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 20.84
  • 3-MONTH T-BILL YIELD: 0.05%
  • 10-Year: 3.07 from 3.13
  • YIELD CURVE: 2.59 from 2.59 

 

MACRO DATA POINTS:

  • 8:30 a.m.: Personal income, est. 0.4%, prior 0.5%
  • 8:30 a.m.: Personal spending, est. 0.5%, prior 0.6%
  • 9:55 a.m.: UMich Consumer Sentiment, final: est. 72.4, prior 72.4
  • 10 a.m.: Pending home sales, est. M/m, (-1.0%), prior 5.1%
  • 1 p.m.: Baker Hughes rig count

WHAT TO WATCH:

  • EU Commission tables measure to ensure fluidity of the EU sugar market
  • Eurozone May Business climate 0.99 vs consensus 1.20 and prior 1.28
  • Microsoft CEO hints at tablet software - WSJ
  • Bank of America (BAC), Morgan Stanley (MS) pay more than $22M to settle wrongful disclosure on active troops - WSJ


COMMODITY/GROWTH EXPECTATION

 

THE HEDGEYE DAILY OUTLOOK - dcommv

 

COMMODITY HEADLINES FROM BLOOMBERG:

  • Global Tire Demand Exceeding Supply Helps Bridgestone, Goodyear, Sumitomo
  • Corn-Planting Delays Signal Price Gain as U.S. Farmers Switch to Soybeans
  • Oil Rises on World Economy Outlook, Dollar; JPMorgan Sees OPEC Quota Gain
  • Copper Gains to Three-Week High on Indications of Stronger Chinese Demand
  • Thailand’s Sugar Exports May Surge to Record as Domestic Quota Lowered
  • Gold Heads for Second Weekly Advance on Europe Debt Concern, Weaker Dollar
  • Wheat Falls to $8.085 a Bushel in Chicago Trading, Erasing Earlier Advance
  • Copper Premiums in China Advance to Seven-Month High as Demand Recovers
  • Coffee Drinkers Won’t Get Break on Prices as Colombia Sees Global Deficit
  • Corn Demand in China Poised to Exceed Output for First Time in Three Years
  • Barrick Must Let Zambia Keep Equinox Shares as Part of Lumwana Approval
  • Mississippi Crop Cargoes Plunged 39% as Flooding Worsened: Freight Markets
  • Coal Set for Three-Year High on China Drought, Power Cuts: Energy Markets
  • Sugar Price May Gain Next Week on Signs of Increased Demand, Survey Shows

 

CURRENCIES

 

THE HEDGEYE DAILY OUTLOOK - dcurrv

 

EUROPEAN MARKETS

  • EUROPE: broad rally this morn but volume is sketchy; DAX (were long) wobbly at this level; Spain/Italy/Greece/Russia all broken TRENDs
  • UK May GfK consumer confidence (21) vs consensus (31)
  • Nationwide UK May house prices (1.2%) y/y vs consensus (1.7%)
  • European Automobile Manufacturers' Association (ACEA) Apr Commercial Vehicles Registrations in the EU +9.5% y/y

THE HEDGEYE DAILY OUTLOOK - bpemytd

THE HEDGEYE DAILY OUTLOOK - wpemytd

 

ASIAN MARKETS

  • A bad week for Asian equities with China down 5 out of 5 days; Vietnam crashing, then bouncing hard (down -15.6% since May4); and Japan remaining abyss
  • Fitch revises Japan's outlook to negative from stable

 

THE HEDGEYE DAILY OUTLOOK - bpamytd

THE HEDGEYE DAILY OUTLOOK - wpamytd

 

MIDDLE EAST

 

THE HEDGEYE DAILY OUTLOOK - meytd

 

Howard Penney

Managing Director


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