• It's Here!

    Etf Pro

    Get the big financial market moves right, bullish or bearish with Hedgeye’s ETF Pro.

  • It's Here

    MARKET EDGES

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

THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP - August 25, 2011

With the exception of inflation in Vietnam being reported at +23% y/y for August (US centric stock market people will say that’s not inflationary, for them), global economic data around the world this morning is very light. 

For the immediate-term TRADE, Gold down and UST Yields up is the same trade. Both are screaming that La Bernank is in a box and won’t be doing QE3 tomorrow (that’s a good thing for America). We are not short the SP500 yet, but very well could be by day’s end.

As we look at today’s set up for the S&P 500, the range is 83 points or -5.91% downside to 1108 and 1.14% upside to 1191.

SECTOR AND GLOBAL PERFORMANCE

Yesterday’s rally, put the XLU positive on TRADE and TREND.

THE HEDGEYE DAILY OUTLOOK - levels

THE HEDGEYE DAILY OUTLOOK - bpgm1

THE HEDGEYE DAILY OUTLOOK - bpgmytd

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: +1173 (-946)  
  • VOLUME: NYSE 1109.47 (-10.58%)
  • VIX:  35.90 -1.02% YTD PERFORMANCE: +102.25%
  • SPX PUT/CALL RATIO: 1.73 from 1.78 -2.99%

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 31.94
  • 3-MONTH T-BILL YIELD: 0.02% +0.01%
  • 10-Year: 2.29 from 2.15    
  • YIELD CURVE: 2.06 from 1.93

MACRO DATA POINTS (Bloomberg Estimates):

  • 8:30 a.m.: Initial jobless claims, est. 405k, prior 408k
  • 9:30 a.m.: IMF bi-monthly press briefing
  • 9:45 a.m.: Bloomberg consumer comfort index, est. -49
  • 10:30 a.m.: EIA natgas storage, est. +74
  • 11 a.m.: Fed to purchase $250m-$500m TIPS
  • 1 p.m.: U.S. to auction $29b 7-year notes

 

WHAT TO WATCH:

  • Greek spreads vs Bunds hit record highs on bailout concerns
  • Hurricane Irene is passing over the Bahamas and may be near North Carolina this weekend and New England next week
  • ECB “stands ready” to ease tensions in U.S. dollar funding of European banks if they arise, Bundesbank’s Andreas Dombret says
  • Bernanke unlikely to promise new action by Fed - WSJ

COMMODITY/GROWTH EXPECTATION

  • GOLD –We can look at yesterday’s move this with a fresh pair of risk management eyes; the Hedgeye immediate-term TRADE line of support has not yet been breached ($1705) and we will likely buy it there if all else remains intact.

THE HEDGEYE DAILY OUTLOOK - dcommv

MOST POPULAR COMMODITY HEADLINES FROM BLOOMBERG:

  • Tony Hayward Gets a Life Post-BP as Investors Write Blank Check
  • Hurricane Irene Strikes Bahamas on Path Toward U.S. East Coast
  • Glencore First-Half Profit Rises 57%; Asian Demand ‘Strong’
  • Gold Drops for Third Day After Margin Boost as Equities Advance
  • Comex Increases Gold Margins After Sharpest Drop Since 2008
  • Oil Trades Near Two-Day Low; Standard Chartered Cuts Forecasts
  • Driver Shortage Shows Gain in U.S. Truck Cargo: Freight Markets
  • Rising Potash Means Lower Debt Cost for Uralkali: Russia Credit
  • Burger King Adds Mom-Friendly Food as Whopper Lovers Lose Jobs
  • Gasoline Use at Nine-Year Low as Economy Falters: Energy Markets
  • Irene Threatens North Carolina Prompting Evacuations From Coast
  • Copper Gains for Third Day as Data Reports Boost Demand Outlook
  • China Bonded Copper Stockpiles Fall About 50%, Glencore Says
  • Crude Futures Advance on Fed Speculation, Supply Decline in U.S.

CURRENCIES

THE HEDGEYE DAILY OUTLOOK - dcurrv

EUROPEAN MARKETS

  • EUROPE/GREECE – the country isn’t going away, but their bond and stock markets are – and what I mean by that is that no one real invests in illiquidity like this; and this is how the Fiat Fool story ends. Greece down -48.5% since FEB and hitting new lows…
  • Germany Sep GfK consumer sentiment 5.2 vs consensus 5.2 and prior revised 5.3 from 5.4

THE HEDGEYE DAILY OUTLOOK - bpem1

ASIAN MARKETS

  • ASIA/CHINA – big short squeeze in Chinese stocks overnight of +2.9% (that’s the only equity market worldwide that we are long, and we are nervous about it), but the rest of Asia didn’t follow – Korea is still in crash mode and Indonesia, India, Thailand, and Malaysia all closed down on the session. Global growth continues to slow.

THE HEDGEYE DAILY OUTLOOK - bpam1

MIDDLE EAST

<CHART9>

Howard Penney

Managing Director