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.
- 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
- 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.
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.
- 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
- 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.