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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

THE HEDGEYE DAILY OUTLOOK - levels 77

THE HEDGEYE DAILY OUTLOOK - daily sector view

THE HEDGEYE DAILY OUTLOOK - 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

THE HEDGEYE DAILY OUTLOOK - daily commodity view

 

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

THE HEDGEYE DAILY OUTLOOK - daily currency view

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%)

THE HEDGEYE DAILY OUTLOOK - euro performance

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.

THE HEDGEYE DAILY OUTLOOK - asia performance

MIDDLE EAST

THE HEDGEYE DAILY OUTLOOK - MIDEAST PERFORMANCE

Howard Penney

Managing Director