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TODAY’S S&P 500 SET-UP - June 8, 2011

If you don’t have, as Jaime Dimon said yesterday in Atlanta, “fear like I do”, about the final output of Le Bernank’s Keynesian monetary policies – you’re going to be on the wrong side of this global equity market selloff. When prices are falling, fear sells.

Yes, that’s a pathetic and sad statement – but this is the beggar’s bailout bed our profession asked for – and now we’re going to sleep in it. The good news is that consensus is starting to price in Growth Slowing and an Indefinitely Dovish Fed (our Macro Themes). US Stocks are down for 6 consecutive days and 6 consecutive weeks. UST Bonds (TLT) and Gold (GLD) continue to win the fear-mongering game.

As we look at today’s set up for the S&P 500, the range is 38 points or -0.77% downside to 1275 and 2.18% upside to 1313.

SECTOR AND GLOBAL PERFORMANCE

THE HEDGEYE DAILY OUTLOOK - levels 68

THE HEDGEYE DAILY OUTLOOK - daily sector view

THE HEDGEYE DAILY OUTLOOK - global performance

 

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: 386 (+2184)  
  • VOLUME: NYSE 934.66 (-2.56%)
  • VIX:  18.07 -2.27% YTD PERFORMANCE: +1.80%
  • SPX PUT/CALL RATIO: 1.40 from 1.46 (-4.10%)

 

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 21.11
  • 3-MONTH T-BILL YIELD: 0.05%
  • 10-Year: 3.01 from 3.01
  • YIELD CURVE: 2.62 from 2.58 

 

MACRO DATA POINTS:

  • 7 a.m.: MBA Mortgage: Prior, (-4.0%)
  • 10:30 a.m.: DoE Inventories
  • 11:30 a.m.: Fed to sell $15b 6-day cash-management bills
  • 1 p.m.: U.S. to sell $21b 10-yr notes reopening
  • 2 p.m.: Fed Beige Book
  • 2:20 p.m.: Fed’s Hoenig speaks in Steamboat Springs, Colo.

WHAT TO WATCH:

  • Bullish sentiment decreases to 40.9% from 45.2% in the latest US Investor's Intelligence poll
  • Banks may cut thousands of Wall Street jobs within weeks - NY Post
  • Morgan Stanley to focus on cost cutting - WSJ

COMMODITY/GROWTH EXPECTATION

THE HEDGEYE DAILY OUTLOOK - daily commodity view

 

COMMODITY HEADLINES FROM BLOOMBERG:

  • U.S. Corn-Crop Delays Signal Tightest World Supply Since 1974, Price Gains
  • Copper Falls on Concern Demand May Wane as Economies Struggle; Tin Drops
  • Oil Drops on Concern OPEC to Raise Quotas as U.S. Gasoline Demand Falters
  • Gold Falls as Some Investors Sell Following Advance to Near Record Price
  • Sugar Rises as Brazil’s Production May Miss Estimates; Coffee Prices Drop
  • Aluminum Costs to Japan Said to Gain to One-Year High on Post-Quake Demand
  • Copper Imports by China Set to Rebound on Consumption, Investment Demand
  • Australia Suspends Cattle Exports to Indonesia on Animal-Welfare Concern
  • Palm Oil Drops to Three-Week Low as Recovery Concerns Cut Commodity Appeal
  • Global Rubber Shortage to Narrow, Capping Costs for Tiremakers, Group Says
  • BHP Coal Mine Workers in Queensland Plan Strikes Next Week, Union Says
  • Cocoa Arrivals From Brazil’s Bahia Region Climb 19%, Analyst Hartmann Says
  • Oil at $100 Hurting Economy May Spur OPEC to Boost Targets: Energy Markets

CURRENCIES

THE HEDGEYE DAILY OUTLOOK - daily currency view

EUROPEAN MARKETS

  • EUROPE: what a mess; Germany/Sweden/Denmark (pseudo stable countries) all down 1-1.5%

THE HEDGEYE DAILY OUTLOOK - euro performance

ASIAN MARKETS

  • ASIA: trying to find its bottom and can't; Japan and China up for day 2, barely, as rest of Asia swoons; Hong Kong -0.9%, India -0.64% and Thailand -2.0%

THE HEDGEYE DAILY OUTLOOK - asia performance

MIDDLE EAST

THE HEDGEYE DAILY OUTLOOK - MIDEAST PERFORMANCE

Howard Penney

Managing Director