THE HEDGEYE DAILY OUTLOOK
TODAY’S S&P 500 SET-UP - July 29, 2011
As we see it the Debt Ceiling Debate = political drama; that’s it – it’s not being priced into either A) a US currency crash or B) US Treasury Yield credit risk. Sure, it’s being priced into US stocks, but I think what people are missing is that so are A) Europig problems and B) EPS expectations. As we look at today’s set up for the S&P 500, the range is 24 points or -0.67% downside to 1292 and 1.18% upside to 1316.
SECTOR AND GLOBAL PERFORMANCE
EQUITY SENTIMENT:
- ADVANCE/DECLINE LINE: -725 (+1836)
- VOLUME: NYSE 986.85 (-10.22%)
- VIX: 23.74 +3.31% YTD PERFORMANCE: +33.75%
- SPX PUT/CALL RATIO: 1.60 from 2.92 (-45.29%)
CREDIT/ECONOMIC MARKET LOOK:
- TED SPREAD: 18.28
- 3-MONTH T-BILL YIELD: 0.07% -0.01%
- 10-Year: 2.98 from 3.01
- YIELD CURVE: 2.56 from 2.57
MACRO DATA POINTS:
- 8:30 a.m.: GDP, QoQ Annualized: est. 1.8%, prior 1.9%
- 8:30 a.m.: Personal consumption, est. 0.8%, prior 2.2%
- 9:45 a.m.: Chicago Purchasing Manager, est. 60.0, prior 61.1
- 9:55 a.m.: UMich Confidence, July final, est. 64.0, prior 63.8
- 10 a.m.: NAPM Milwaukee, est. 56.9, prior 59.3
- 1 p.m.: Baker Hughes rig count
- 3:15 p.m.: Fed’s Bullard, Lockhart discuss monetary policy in Wyoming
WHAT TO WATCH:
- Treasury contingency plan on debt is said to give priority to bondholders. Obama officials said to release plan no earlier than after the close of markets today.
- Spain faces Moody’s rating reduction from Aa2
COMMODITY/GROWTH EXPECTATION
COMMODITY HEADLINES FROM BLOOMBERG:
- Sugar Exports From India at Four-Year High May Cool Prices
- Sugar Falls as Surplus May Become Available; Coffee Advances
- Gold May Fall in London as Rally to Record Spurs Investor Sales
- Copper May Fall on Concern About Potential U.S. Debt Default
- Nickel Surplus to Narrow on China’s Demand, Sumitomo Says
- Gold May Repeat 1970-80 Bull Market on Europe Debt, U.S : Citi
- China May Boost Corn Imports to Record on Re-Stocking, Hog Herds
- Coffee May Decline 15% to Fibonacci Level: Technical Analysis
- BHP Chile Workers Vow to Prolong Strike at Biggest Copper Mine
- Gasoline Profit Doubling Cuts Naphtha to Asia: Energy Markets
- Vale Plans $3 Billion Dividend as Net Income Misses Estimates
- Gold May Decline as Rally to Record Spurs Sales, Survey Shows
- China Gold Demand May Surpass India This Year, Goldcorp Says
- Radiation-Free Food Bolsters South Korea’s Exports to Japan
CURRENCIES
EUROPEAN MARKETS
- EUROPE: ring the gong; this Europig mess has nothing to do w/ Congress; straight down this wk across Europe b/c debt maturities ramp in AUG
- UK Jul house prices (0.4%) y/y vs consensus (0.9%) andn prior (1.1%)
- Germany June retail sales (1.0%) y/y vs consensus (1.8%), prior revised +3.1% from +2.2%
- France June consumer spending +1.2% vs consensus +0.5%, prior revised (0.3%) from (0.8%)
- France June producer prices (0.1%) vs consensus +0.1%and prior (0.5%)
- UK Jun mortgage approvals 48.4k vs consensus 46.0K
- EuroZone July flash CPI +2.5% vs consensus +2.7%
ASIAN MARKETS
- ASIA ugly overnight with Taiwan down the most on a slowing economy and the TSMC miss
- Japan June core CPI +0.4% y/y vs cons +0.5%; overall household spending (4.2%) y/y vs cons (2.3%).
MIDDLE EAST
Howard Penney
Managing Director
