TODAY’S S&P 500 SET-UP - June 2, 2011


Nothing in the last week has changed our Global Macro risk management view.

  1. Growth is slowing
  2. Inflation (reported) is sticky
  3. Stagflation is bad for asset prices (commodities and equities in particular)

Growth Slowing is bullish for UST bonds (TLT) and Compression in the Yield Curve (FLAT). Those 2 positions remain Hedgeye’s highest conviction macro longs alongside Gold (GLD).  Although, all 3 of them are getting overbought in the immediate-term.  As we look at today’s set up for the S&P 500, the range is 18 points or -0.73% downside to 1305 and 0.64% upside to 1323.






THE HEDGEYE DAILY OUTLOOK - daily sector view


THE HEDGEYE DAILY OUTLOOK - global performance




  • ADVANCE/DECLINE LINE: -1943 (-3520)  
  • VOLUME: NYSE 1189.94 (-21.46%)
  • VIX:  18.30 +18.45% YTD PERFORMANCE: +3.10%
  • SPX PUT/CALL RATIO: 2.19 from 1.61 (+35.79%)



  • TED SPREAD: 21.22
  • 3-MONTH T-BILL YIELD: 0.05%
  • 10-Year: 2.96 from 3.05
  • YIELD CURVE: 2.52 from 2.60 



  • 8:30 a.m.: Jobless claims, est. 417k, prior 424k
  • 8:30 a.m.: Nonfarm Productivity, 1Q final, est. 1.7% from 1.6%
  • 9:45 a.m. Bloomberg consumer comfort, est. (-47.0), prior (-48.4)
  • 10 a.m.: Factory orders, est. (-1.0%)
  • 10:30 a.m.: Natural gas storage change, est. 93
  • 11 a.m.: DOE Inventories  


  • Japan Prime Minister Naoto Kan survives no-confidence vote - Nikkei
  • European bank stress test results to be delayed until July - WSJ
  • Greece’s risk of default was raised to 50% by Moody’s as European officials rushed to put together the second bailout plan in two years to stave off renewed financial turmoil in the region. 




THE HEDGEYE DAILY OUTLOOK - daily commodity view




  • Billionaire Deripaska Joins Russia Grain Rush as Export Sales Ban Ends
  • Rice Soaring 50% in Thailand as Thaksin Seeks Votes in World’s Top Shipper
  • Wool Rallies to Highest Since 1995 as Flock Shrinks, Stockpile Replenished
  • Drought in China’s Yangtze May Be Relieved by Rains, Helping Rice, Cotton
  • Wheat Gains in Chicago on Speculation of Increased Livestock Feeder Demand
  • Copper, Aluminum Drop as Weaker Data Drive Speculation Recovery May Falter
  • Gold May Advance as Economic Slowdown, Greece’s Debt Turmoil Spur Demand
  • Cooking Oil Imports May Climb as Indian Farmers Dump Soybeans for Cotton
  • Japan Steel Works to Target Non-Atomic Energy Sales After Nuclear Disaster
  • Rubber Declines to One-Week Low as U.S. Data Raises Concern Demand to Slow
  • Oil Falls to Lowest in Week as Manufacturing Slows; U.S. Supplies Increase
  • BHP Facing First Strike in 10 Years at World’s Biggest Steel Coal Supplier
  • N.Z. Proposes Agency to Regulate Exploration, Mining in Its Offshore Zone
  • Goldman, Major Banks See 55% Average Rise in Commodities Income, WSJ Says




THE HEDGEYE DAILY OUTLOOK - daily currency view




  • Spain's treasury sells €2.75B of 2014 bond, bid-to-cover ratio 2.5 vs 1.8 at previous auction, bond average yield 4.037% vs 3.568% at previous auction

THE HEDGEYE DAILY OUTLOOK - euro performance




  • Indonesia was closed for Ascension Day.
  • Will China raise rates over the weekend?
  • Japan Q1 manufacturing capex +27.7% y/y, corporate capex +3.3% y/y. Monetary base +16.2% y/y vs +23.9% seq.
  • Australia April trade surplus A$1.60 vs A$1.69B seq. April retail sales +1.1% m/m vs revised (0.3%) seq

THE HEDGEYE DAILY OUTLOOK - asia performance







Howard Penney

Managing Director

People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

read more

UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more

Got Process? Zero Hedge Sells Fear, Not Truth

Fear sells. Always has. Look no further than Zero Hedge.

read more

REPLAY: Review of $EXAS Earnings Call (A Hedgeye Best Idea Long)

Our Healthcare Team made a monster call to be long EXAS - hear their updated thoughts.

read more

Capital Brief: 5 Things to Watch Right Now In Washington

Here's a quick look at some key issues investors should keep an eye on from Hedgeye's JT Taylor and our team of Washington Policy analysts in D.C.

read more

Premium insight

[UNLOCKED] Today's Daily Trading Ranges

“If I could only have one thing of the many things we have it would be my daily ranges." Hedgeye CEO Keith McCullough said recently.

read more

We'll Say It Again: Leave Your Politics Out of Your Portfolio

If your politics dictates your portfolio positioning, the Democrats and #NeverTrump crowd out there have had a hell of a week.

read more

Cartoon of the Day: 'Biggest Tax Cut Ever'

President Donald Trump's economic team unveiled what he called last week, "the biggest tax cut we’ve ever had.” Before you get too excited about that hang on a sec. "Trump Tax Reform ain’t gettin’ done anytime soon," Hedgeye CEO Keith McCullough wrote in today's Early Look.

read more

Neurofinance: The Psychology Behind When To Sell A Bull Market

"Most momentum investors stay invested too long, under-reacting and holding tight after truly bad news finally arrives to break the trend," writes MarketPsych's Richard Peterson.

read more