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TODAY’S S&P 500 SET-UP - August 17, 2011

As we look at today’s set up for the S&P 500, the range is 35 points or -1.83% downside to 1172 and 1.10% upside to 1207.

SECTOR AND GLOBAL PERFORMANCE

THE HEDGEYE DAILY OUTLOOK - levels 818

THE HEDGEYE DAILY OUTLOOK - daily sector view

THE HEDGEYE DAILY OUTLOOK - global performance

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: +591 (-1525)  
  • VOLUME: NYSE 972.85 (-14.1%)
  • VIX:  31.58 -3.9% YTD PERFORMANCE: +77.92%
  • SPX PUT/CALL RATIO: 2.23 from 1.41 +58.16%

CREDIT/ECONOMIC MARKET LOOK:

FIXED INCOME: Yield Spread (UST) continues to compress this morn (10s-2s = 191bps) = explicit signal that US Growth is still slowing.

  • TED SPREAD: 29.27
  • 3-MONTH T-BILL YIELD: 0.01%
  • 10-Year: 2.23 from 2.29    
  • YIELD CURVE: 2.09 from 2.17

MACRO DATA POINTS (Bloomberg Estimates):

  • 8:30 a.m.: Consumer Price Index (MoM), Jul, est. 0.2%; prior -0.2%
  • 8:30 a.m.: Initial Jobless Claims, Aug 13, est. 400k; prior 295k
  • 9:45 a.m.: Bloomberg Consumer Comfort, Aug 14, prior -49.1
  • 10:00 a.m.: Philadelphia Fed Business Outlook Survey, Aug, est. 2.0, prior 3.2
  • 10:00 a.m.: Existing Home Sales, Jul, est. 4.9m; prior 4.77m
  • 1:00 p.m.: U.S. to auction $12b 5-yr TIPS (reopening)
  • 2:30 p.m.: Fed’s Dudley to tour Jersey City, NJ

WHAT TO WATCH:

  • Morgan Stanley cut est. for global growth to 3.9% this year, down from 4.2%, while Deutsche Bank said China’s economy may expand less than 9% in 2011, 2012
  • Rep. Barney Frank, D-Mass., asked Fed to extend examination of Capital One’s acquisition of ING Direct USA, in letter yesterday
  • DOJ investigating whether S&P executives overruled when analysts wanted to give lower ratings on mortgage bonds: NYT
  • Sen. Charles Grassley, R-Iowa, asked SEC to answer allegations agency destroyed files from initial investigations of firms including Goldman Sachs, SAC Capital, Bernard Madoff Investment
  • Coca-Cola plans $4b in new spending in China over next 3 years: WSJ, citing CEO Muhtar Kent
  • Pemex announces results of auctions for contracts to operate three Tabasco oil fields. Watch Schlumberger, Halliburton
  • GE CEO Jeff Immelt speaks at Dartmouth in PM
  • Dept. of Interior, Exxon said to be fighting over significant oil find in Gulf of Mexico which co. says may yield 1b bbl: WSJ
  • Forest Labs hosts annual meeting, with Carl Icahn nominating 4 to the board
  • Target hosts investor meeting, to lay some financial goals beyond this year
  • MGM Resorts founder Kirk Kerkorian said to complete sale of 20m shares yesterday, cutting Tracinda stake to 22% from 27%: WSJ
  • ArcelorMittal, Peabody send bidder’s statement to MacArthur Coal holders today; cos. call takeover offer “compelling”
  • No IPOs expected to price today

COMMODITY/GROWTH EXPECTATION

THE HEDGEYE DAILY OUTLOOK - daily commodity view

MOST POPULAR COMMODITY HEADLINES FROM BLOOMBERG:

  • Gold Futures Climb 1.5% to Record $1,819.90 an Ounce in New York
  • Oil Falls in New York on Signs Slowing Economy May Curb Demand
  • Copper Falls as Banks Reduce Global, Chinese Growth Estimates
  • Corn Falls Most in More Than a Week as U.S. Rain May Aid Crops
  • Sugar May Advance as Asia Boosts Purchases, Coffee Declines
  • Gold Demand Falls 17% on Slower ETP Investment, Council Says
  • China Gold Investment Demand Jumps 44% on Rising Inflation
  • Chavez Orders $11 Billion of Gold Home as Metal Hits Record
  • Debt Funds Dumped as Gold Flows Jump 74% in Crisis: India Credit
  •  Oil Refiners Delay Maintenance as Profits Surge: Energy Markets
  • India Monsoon Rain Revival Lifts Rice, Cotton Crop Prospects
  • JPMorgan Said to Move Global Agriculture Head to Singapore
  • Sugar Sales in China Unlikely to Plug Shortfall as Imports Gain
  • U.S. Commodities Day Ahead: Gold Rises Above $1,800 on Slowdown
  • Venezuela Gold Move Shows Foreign-Storage Discomfort, UBS Says
  • British Farmland Values Rise to a Record on Commodity Prices

CURRENCIES

THE HEDGEYE DAILY OUTLOOK - daily currency view

EUROPEAN MARKETS

  • Europe Stocks Drop as Officials Say Fed Shouldn’t Shield Market
  • ECB Daren’t Blink as It Stares Down Bond Yields: Euro Credit
  • Barclays Sees ‘Very Real Competition’ From Chinese Firms
  • Europe Construction Output Falls on Declines in Germany, France
  • Foster’s Says SABMiller $10 Billion Takeover Offer Too Low
  • Denmark’s Regional Banks Dump Assets to Avoid Funding Wall
  • Czech Koruna May Be Next Franc Before Euro QE, Record Plc Says
  • Gilt Yields Drop to Record Low, Pound Slips on Retail Sales Data
  • RTS Futures Fall as Growth Woes Trump Oil Gain: Russia Overnight
  • Swiss Swap Rates Turn Negative on Franc Fight: Chart of the Day
  • Financial Turmoil Adds to Allure of Europe’s Best Properties
  • Maserati Made in Michigan Lets Chrysler Drive Luxury SUV: Cars

THE HEDGEYE DAILY OUTLOOK - euro performance

ASIAN MARKETS

  • Biden Meets China’s Xi to Build ‘Personal Relationship’

THE HEDGEYE DAILY OUTLOOK - asia performance

MIDDLE EAST

THE HEDGEYE DAILY OUTLOOK - MIDEAST PERFORMANCE

Howard Penney

Managing Director