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THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP - September 2, 2011

With the SP500 closing 1 point above its immediate-term TRADE line of 1203 yesterday, this morning’s jobs print in the US becomes very relevant.   We have ZERO edge on what the number will be (the government makes up the birth/death adjustment), but we have a process/ plan post print.

  1. If the SPX breaks and holds below 1203, immediate term TRADE support becomes 1182
  2. On a breach of 1182 and a VIX breakout > 35.40, retest of the 2011 lows is in play
  3. If the SPX draws down and recovers 1203, immediate-term upside to 1234

As we look at today’s set up for the S&P 500, the range is 41 points or -1.86% downside to 1182 and 1.54% upside to 1223.

SECTOR AND GLOBAL PERFORMANCE

THE HEDGEYE DAILY OUTLOOK - levels 92

THE HEDGEYE DAILY OUTLOOK - daily sector view

THE HEDGEYE DAILY OUTLOOK - global performance

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: -1433 (-2334)  
  • VOLUME: NYSE 1017.95 (+19.54%)
  • VIX:  31.82 +0.63% YTD PERFORMANCE: +79.27%
  • SPX PUT/CALL RATIO: 1.78 from 1.40 +27.11%

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 31.93
  • 3-MONTH T-BILL YIELD: 0.02% +0.01%
  • 10-Year: 2.22 from 2.19    
  • YIELD CURVE: 2.03 from 1.99

MACRO DATA POINTS (Bloomberg Estimates):

  • 8:30 a.m.: Unemployment rate, est. 9.1%, prior 9.1%
  • Change in non-farm payolls, est. 68k, prior 117k
  • 1 p.m.: Baker Hughes rig count

 

WHAT TO WATCH:

  • Bank of America, JP Morgan, other banks may be sued by the U.S. FHFA for misrepresenting quality of mortgage securities during height of housing bubble: NY Times
  • Bank of America told by Fed to show steps it would take if its financial condition worsens: WSJ 
  • BP, Exxon Mobil, others shut almost 6% of Gulf crude output ahead of tropical depression
  • Netflix said Starz walked away from talks on new streaming deal; contract ends next Feb.

COMMODITY/GROWTH EXPECTATION

COMMODITIES: big breakout lines in Gold and Silver = $1819 and $41.53

THE HEDGEYE DAILY OUTLOOK - daily commodity view

MOST POPULAR COMMODITY HEADLINES FROM BLOOMBERG:

  • China Buries Obama’s Solar-Power Ambitions With $34.4 Billion
  • Gold Gains for Second Day as Equities Drop on Growth Concern
  • Oil Drops Before U.S. Jobs Data; Gulf Rigs Shut as Storm Builds
  • Saudi Oil May Gain as China Refineries Restart: Energy Markets
  • Shanghai Plans Fivefold Increase in Metal Bonded Warehousing
  • Baosteel Group Pays $1.95 Billion for Stake in Niobium Miner
  • Copper Falls for Second Day as Growth Concerns Weigh on Demand
  • Corn Rallies After Biggest Drop in Two Months Spurs Purchases
  • Glencore Proposes Cash Bid Valuing Optimum Coal at $1.2 Billion
  • Gold May Advance on Concern About Slowing Growth, Survey Shows
  • Palm Oil Gains as Widening Discount to Soybean Oil Lures Buyers
  • Ukraine’s Corn Exports Surge Capping Price Rally as U.S. Bakes
  • Australia Wheat Forecast Cut 4 Percent on Dry East, ANZ Says

CURRENCIES

THE HEDGEYE DAILY OUTLOOK - daily currency view

EUROPEAN MARKETS

  • EUROPE: broadly lower lead by Greece and Germany down 3.6% and 2.8%, respectively. 
  • Greek Finance Minister denies that EU/IMF talks are suspended, says new cycle of talks will begin on 14-Sept -- Reuters
  • Eurozone July PPI +6.1% y/y vs consensus +6.1% and prior +5.9%; Eurozone July PPI +0.5% m/m vs consensus +0.5% and prior +0.0%

THE HEDGEYE DAILY OUTLOOK - euro performance

ASIAN MARKETS

  • ASIA: mixed last night (Japan and China down 1.2% and 1.1%), but the Philippines (which I am long) was up 0.6% moving to up +1% for September

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MIDDLE EAST

THE HEDGEYE DAILY OUTLOOK - MIDEAST PERFORMANCE

Howard Penney

Managing Director