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TODAY’S S&P 500 SET-UP - June 7, 2011

Ben Bernanke will be speaking in Atlanta tonight where he’ll talk around the need to cutt his GROWTH forecast, while raising his INFLATION forecast… again, after the fact. He’s usually 3-9 months behind Hedgeye – but Gaming Policy will remain the game that matters here with US/Global markets reading into this in the following way:

  1. UST Bonds – Indefinitely Dovish (Q2 Macro Theme); with upside in long-bonds up to 4.16% on the 30yr immediate-term
  2. US Stocks – Jobless Stagflation (1-1.5% GDP growth w/ 3.5% headline CPI, and markets pay a lower multiple for stagflation stats)
  3. US Dollar – Indefinitely Dovish – should equate to further downside pressure in USD to 73.76 (a higher low)

As we look at today’s set up for the S&P 500, the range is 48 points or -1.41% downside to 1268 and 2.32% upside to 1316.

SECTOR AND GLOBAL PERFORMANCE

THE HEDGEYE DAILY OUTLOOK - levels 67

THE HEDGEYE DAILY OUTLOOK - daily sector view

THE HEDGEYE DAILY OUTLOOK - global performance

 

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: -1798 (-483)  
  • VOLUME: NYSE 959.22 (-1.25%)
  • VIX:  18.49 +3.01% YTD PERFORMANCE: +4.17%
  • SPX PUT/CALL RATIO: 1.46 from 2.23 (-34.46%)

 

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 21.11 -2.034 (-8.788%)
  • 3-MONTH T-BILL YIELD: 0.05%
  • 10-Year: 3.01 from 2.99
  • YIELD CURVE: 2.57 from 2.59 

 

MACRO DATA POINTS:

  • 7:45 a.m./8:55 a.m.: ICSC, Redbook release weekly retail sales
  • 10 a.m.: IBD/TIPP economic optimism, est. 42.0, prior 42.8
  • 10 a.m.: JOLTS job openings
  • 11:30 a.m.: U.S. to sell $28b 4-week bills
  • Noon: DoE Short-Term Outlook
  • 12:30 p.m.: Fed’s Lockhart speaks in North Carolina
  • 1 p.m.: U.S. to sell $32b 3-yr notes
  • 2:30 p.m.: Fed’s Hoenig to tour factory in Colorado
  • 3 p.m.: Consumer credit, est. $5.0b, prior $6.016b
  • 3:45 p.m.: Fed’s Bernanke to speak to bankers in Atlanta
  • 4:30 p.m.: API inventories

WHAT TO WATCH:

  • World Bank releases report on global growth forecasts through 2013
  • Pershing Square’s Bill Ackman said his holdings in J.C. Penney one of his top two investments, speaking in New York yesterday (not so much for @HedgeyeRetail)
  • WSJ is positive on airplane makers, suppliers
  • Backers of delay to imposition of debit card swipe fees making concessions - NY Post
  • NYT DealBook discusses Goldman Sachs's subprime bet
  • NBCUniversal will purchase Blackstone's 50% stake in Universal Orlando

COMMODITY/GROWTH EXPECTATION

THE HEDGEYE DAILY OUTLOOK - daily commodity view

 

COMMODITY HEADLINES FROM BLOOMBERG:

  • World Food Prices Linger Near Record as Meat and Dairy Costs Gain, UN Says
  • France Backs Compensation for Food Producers as E.Coli Crisis Hits Demand
  • E. Coli in Europe May Hurt U.S. Produce Sales Until Outbreak’s Cause Found
  • Crude Oil Advances; SocGen Sees 65% Chance OPEC to Raise Production Quotas
  • Sugar Climbs as Brazil’s Harvest May Miss Estimates; Cocoa Prices Advance
  • Wheat May Gain as Rains Might Be Too Late to Reverse European Crop Damage
  • Gold May Advance as Greek Debt Crisis, U.S. Data Increase Investor Demand
  • Copper May Fall on Concern China Might Take More Steps to Curb Inflation
  • Oil Stockpiles Fall in Survey as Canadian Pipeline Shuts: Energy Markets
  • Frontline Billionaire Fredriksen Bets Tankers Collapsing: Freight Markets
  • Barclays Sleepless in Sydney as India Firms Seek Coal Deals to Fuel Growth
  • Olam Plans to Raise S$740 Million Through Three-Tranche Offering of Shares
  • Aabar Plans to Make Joint Investments With Glencore, Financial Times Says

CURRENCIES

THE HEDGEYE DAILY OUTLOOK - daily currency view

EUROPEAN MARKETS

  • EUROPE: better than bad with Germany leading the way on the upside, +.77% (we're long) and Spain underperforming +0.26%(we're short) $EWG $EWP

THE HEDGEYE DAILY OUTLOOK - euro performance

ASIAN MARKETS

  • ASIA: better than bad session overnight, with China and India attempting to stabilize at+0.6% each and -2.3% and -9.6% YTD, respectively 

THE HEDGEYE DAILY OUTLOOK - asia performance

MIDDLE EAST

THE HEDGEYE DAILY OUTLOOK - MIDEAST PERFORMANCE

Howard Penney

Managing Director