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    MARKET EDGES

    Identify global risks and opportunities with essential macro intel using Hedgeye’s Market Edges.

TODAY’S S&P 500 SET-UP - June 16, 2011

Our top Global Macro Themes remain:

1.       Growth Slowing

2.       Deflating The Inflation (housing, equities, commodities)

3.       Indefinitely Dovish (bullish on UST Bonds)

While Oil, Copper, SP500 are immediate-term TRADE oversold this morning, it's important to recognize that yesterday only heightened the probability that these will all remain bearish intermediate-term TRENDs. Consensus isn't quite there yet.  As we look at today’s set up for the S&P 500, the range is 20 points or -0.35% downside to 1261 and 1.23% upside to 1281.

SECTOR AND GLOBAL PERFORMANCE

 

THE HEDGEYE DAILY OUTLOOK - levels 616

THE HEDGEYE DAILY OUTLOOK - daily sector view

THE HEDGEYE DAILY OUTLOOK - global performance

 

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: -2098 (-4093)  
  • VOLUME: NYSE 1068.78 (+16.76%)
  • VIX:  21.32 +16.76% YTD PERFORMANCE: +20.11%
  • SPX PUT/CALL RATIO: 2.86 from 1.50 (+89.90%)

 

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 19.92
  • 3-MONTH T-BILL YIELD: 0.05%
  • 10-Year: 2.98 from 3.11
  • YIELD CURVE: 2.60 from 2.66 

 

MACRO DATA POINTS:

  • 8:30 a.m.: Current account balance, est. ($-130.0b), prior ($113.3b)
  • 8:30 a.m.: Net export sales
  • 8:30 a.m.: Initial jobless claims, est. 420k, prior 427k
  • 8:30 a.m.: Housing starts, est. 545k (up 4.2%), prior 523k
  • 8:30 a.m.: Building permits, est. 557k (down 1.1%)
  • 9:45 a.m.: Bloomberg Consumer Comfort, prior (-45.9)
  • 10 a.m.: Philadelphia Fed, est. 7.0, prior 3.9
  • 10 a.m.: Freddie Mac 30-yr mortgage
  • 10 a.m.: Fed’s Tarullo testifies on regulatory reform
  • 10:30 a.m.: EIA natural gas storage, est. 69
  • 8 p.m.: ECB’s Trichet speaks in NY

WHAT TO WATCH:

  • Paulson Suffers Sizable Losses, One Fund Is Down 19.65% - WIRES
  • Greek PM Papandreou to reshuffle cabinet today and seek a confidence vote, battling to control a shrinking majority and pass austerity measures demanded by international lenders
  • Capital One bidding for HSBC’s U.S. credit card unit: WSJ
  • Borders Group may have deal with lenders and creditors to avoid closing as many as 51 stores; canceled auction set for today
  • U.S. banks must be willing to raise capital to guard against a potential financial crisis, FDIC Chairman Sheila Bair will tell lawmakers at House Financial Services meeting today

COMMODITY/GROWTH EXPECTATION

THE HEDGEYE DAILY OUTLOOK - daily commodity view

 

COMMODITY HEADLINES FROM BLOOMBERG:

  • Copper Falls Most in a Week on Concern Greece’s Debt Crisis May Cut Demand
  • Oil Trades Near Four-Month Low on Concern Europe Debt Crisis Is Worsening
  • Lower U.S. Cattle Sales Squeezing Beef Supply Means More Costs for Packers
  • Gold Falls as Stronger Dollar Erodes Demand for an Alternative Investment
  • Wheat Drops for a Fourth Day as European Rainfall Eases Production Concern
  • Cocoa Falls Most in Two Weeks in London on African Supplies; Sugar Drops
  • Food-Safety Fears Grow in Japan as Radiation Testing Engenders Skepticism
  • Lead Output in China to Extend Drop as Battery Makers Shut After Poisoning
  • Tractor Sales in India Surge to Record as Commodity Boom Drives Production
  • Record Brent Crude Premium to Shrink on North Sea Oil Flow: Energy Markets
  • Gold May Extend Drop on Seasonality, Commerzbank Says: Technical Analysis
  • No More Major Weather Threats Seen for Commodities in ‘11, Forecaster Says
  • Lenzing $875 Million Share Sale Priced at Bottom of Range; Stock Plummets

CURRENCIES


THE HEDGEYE DAILY OUTLOOK - daily currency view

EUROPEAN MARKETS

  • EUROPE: gong show; all of my TRADE and TREND durations have gone bearish (including Germany); Greece down -28.5% since Feb.  We are short Spain.
  • UK May Retail Sales +0.2% y/y vs consensus +1.5% and prior revised +2.4% from +2.3%

THE HEDGEYE DAILY OUTLOOK - euro performance

ASIAN MARKETS

  • ASIA: just a mess; China down -1.5% to fresh YTD lows; Japan down another -1.7% (were short) to -8% YTD; Korea -1.9%, Indonesia -1.4% 

THE HEDGEYE DAILY OUTLOOK - asia performance

MIDDLE EAST

THE HEDGEYE DAILY OUTLOOK - MIDEAST PERFORMANCE

Howard Penney

Managing Director