TODAY’S S&P 500 SET-UP - July 7, 2011
Part of the Hedgeye philosophy is to just let the market show us her path of least resistance; we have shifted to be a little longer this week - the Pain Trade is up (for now). As we look at today’s set up for the S&P 500, the range is 45 points or -1.81% downside to 1315 and 1.55% upside to 1360.
SECTOR AND GLOBAL PERFORMANCE
EQUITY SENTIMENT:
- ADVANCE/DECLINE LINE: 377 (416)
- VOLUME: NYSE 821.05 (-9.47%)
- VIX: 16.34 +1.74% YTD PERFORMANCE: -7.94%
- SPX PUT/CALL RATIO: 2.04 from 1.87 (+9.10%)
CREDIT/ECONOMIC MARKET LOOK:
- TED SPREAD: 24.07
- 3-MONTH T-BILL YIELD: 0.01%
- 10-Year: 3.12 from 3.16
- YIELD CURVE: 2.69 from 2.72
MACRO DATA POINTS:
- 8 a.m.: RBC Consumer Outlook Index
- 8:15 a.m.: ADP Employment Change, est. 70k, prior 38k
- 8:30 a.m.: Jobless claims, est. 420k, prior 428k
- 9:45 a.m.: Bloomberg consumer comfort, est. (-44.3), prior (-43.9)
- 10 a.m.: Freddie Mac mortgage survey
- 10:30: EIA Natural Gas storage, est. 82, prior 78
- 11 a.m.: DoE inventories
- 12:30 p.m.: Fed’s Hoenig speaks in Ada, Okl.
- 2 p.m.: USDA cattle, hog slaughter
WHAT TO WATCH:
- President Obama meets with congressional leaders over debt
- NYSE Euronext holders vote on $9.33b Deutsche Boerse takeover
- Allen & Co. conference continues in Sun Valley
- Verizon Wireless ends unlimited data plans for new customers
- LG Electronics cut its year sales for target for smartphones; losing share to Apple, Samsung
- Bank of England Holds Key Rate at 0.5%, as Expected
COMMODITY/GROWTH EXPECTATION
COMMODITY HEADLINES FROM BLOOMBERG:
- World Food Prices Climb on Sugar, Dairy Costs, Stoking Inflation Pressure
- Copper Fees May Stay High on Japan Quake, Slumping China Imports, JX Says
- Oil Rises in New York on Signs U.S. Crude Stockpiles Shrank a Fifth Week
- Copper Reaches 11-Week High as Adverse Weather Fuels Concern About Supply
- Wheat Drops for Second Day as U.S. Weather Improves, Russia Exports Resume
- Sugar Climbs as Brazil’s Cane Crop May Miss Estimate; Cocoa Prices Decline
- Goldman, Morgan Stanley Stay Bullish on Oil, Copper as Economy to Recover
- China’s $70 Billion Fund Managers Rush to Boost Gold Investment Overseas
- Gold for Immediate Delivery Declines 0.2% to $1,525.65 an Ounce in London
- Cocoa-Bean Production in Indonesia to Expand on Replanting, Rehabilitation
- China Corn Buying Too Little to Spur Rally After USDA Report, Cofco Says
- Coal Poised for Worst Quarter This Year on China, Japan: Energy Markets
- Florida Orange Output Will Be Below Forecast on Dry Weather, Survey Shows
CURRENCIES
EUROPEAN MARKETS
- European stocks advanced for the eighth time in nine days
- UK May Manufacturing output +2.8% y/y vs consensus +2.1% and prior revised +1.2% from +1.3%; UK May Manufacturing output +1.8% m/m vs consensus +1.0% and prior revised (1.6%) from (1.5%)
ASIAN MARKETS
- ASIA: looking healthier by the day; India ripped +1.7% higher overnight and the squeeze is on there now too; KOSPI and China look solid.
MIDDLE EAST
Howard Penney
Managing Director
