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TODAY’S S&P 500 SET-UP - June 3, 2011

The US futures are trading lower following the disappointing jobs numbers, while Europe is slightly higher and Asia traded lower.  Last month’s jobs report benefited from a very favorable Birth-death fudge factor which was +175,000 of the 224,000 reported.  All the MACRO data points for the past two weeks suggested that the today jobs picture would be bleak, no matter how made up the jobs number always is.  As we look at today’s set up for the S&P 500, the range is 20 points or -0.68% downside to 1304 and 0.84% upside to 1324.

SECTOR AND GLOBAL PERFORMANCE

THE HEDGEYE DAILY OUTLOOK - levels 63

THE HEDGEYE DAILY OUTLOOK - daily sector view

THE HEDGEYE DAILY OUTLOOK - global performance

 

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: -180 (+1763)  
  • VOLUME: NYSE 1008.32 (-15.26%)
  • VIX:  18.09 -1.15% YTD PERFORMANCE: +1.92%
  • SPX PUT/CALL RATIO: 1.61 from 1.19 (-26.59%)

 

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 21.64
  • 3-MONTH T-BILL YIELD: 0.04%
  • 10-Year: 3.04 from 2.96
  • YIELD CURVE: 2.59 from 2.52 

 

MACRO DATA POINTS:

  •  8:30 a.m.: Payrolls report: Change in nonfarm payrolls: est. 165k, prior 244k; Change in private payrolls: est. 173k, prior 268k
  • Unemployment rate: est. 8.9%, prior 9.0%
  • 8:30 a.m.: Net export sales: Soybeans, soy meal, soy oil, wheat *10 a.m.: ISM non-manufacturing: est. 54.0, prior 52.8
  • 12:30 p.m.: Fed’s Tarullo speaks on regulation in Washington
  • 1 p.m.: Baker Hughes Rig Count
  • 3:30 p.m.: Fed’s Rosengren speaks at Stanford

WHAT TO WATCH:

  • S&P says a Greek default is "far from certain
  • Groupon could raise up to $3B, valuing company at $30B - NYT,
  • Apple paying major reecord labels $25-50M each in advance - NY Post
  • Fox gets 10% price increase for primetime ads sold in upfront, takes in $2B - NY Post
  • Foster's unaware of unannounced information explaining today's jump in price
  • Coca-Cola CEO says will raise prices in H2 more than expected - FT
  • Fed reports balance sheet assets of $2.79T on Wednesday, +$13.7B w/w and +$453.1B y/y

COMMODITY/GROWTH EXPECTATION

THE HEDGEYE DAILY OUTLOOK - daily commodity view

 

COMMODITY HEADLINES FROM BLOOMBERG:

  • Gold Declines a Second Day in London as Near-Record Prices Spur Selling
  • Feed Makers in South Korea May Favor Wheat Over Corn as Premium Narrows
  • Lead Smelters in China May Cut Output as Demand Slows, Regulation Tightens
  • Japan’s Tea Industry Facing Shortage as Nuclear Radiation Taints Shipments
  • Copper Climbs in London Trading on Speculation Two-Day Drop Was Overdone
  • Oil Falls Below $100 Before U.S. Jobs Report, OPEC; Crude Supplies Climb
  • Copper May Fall Next Week on Speculation of Slowing Demand, Survey Shows
  • Wheat Futures Climb for Second Day on Weather Concerns in U.S., EU, Canada
  • Highest-Quality Crude Shortage Cutting Refinery Profits: Energy Markets
  • Rubber Advances as Oil’s Rally Boosts Appeal, Car Output Recovers in Japan
  • Harmony Gold Digging World’s Third-Richest Mine Emerges as Takeover Target
  • Ukrainian Coal Production Rose 9.9% in 5 Months, Agriculture Ministry Says
  • Copper Stockpiles in Shanghai Rose 3,854 Tons to 86,163 Tons in Past Week
  • Europe Commodity Day Ahead: Wheat Futures Gain on U.S. Weather Concerns

CURRENCIES

THE HEDGEYE DAILY OUTLOOK - daily currency view

EUROPEAN MARKETS

  • Europe trading slightly higher ahead of the US open
  • Eurozone May Services PMI 56.0 vs consensus 55.4 and prior 55.4
  • Eurozone May Composite PMI 55.8 vs consensus 55.4 and prior 55.4
  • Germany May Services PMI 56.1 vs consensus 54.9 and prior 54.9
  • France May Services PMI 62.5 vs consensus 62.8 and prior 62.8

THE HEDGEYE DAILY OUTLOOK - euro performance

ASIAN MARKETS

  • Australia’s May AiG Performance of Service index 49.9 vs 51.5 seq.
  • Asia traded lower, with the exception being China op 0.8%

THE HEDGEYE DAILY OUTLOOK - asia performance

MIDDLE EAST

THE HEDGEYE DAILY OUTLOOK - MIDEAST PERFORMANCE

Howard Penney

Managing Director