THE HEDGEYE DAILY OUTLOOK

THE HEDGEYE DAILY OUTLOOK

 

TODAY’S S&P 500 SET-UP - September 14, 2011

 

Ultimately, what matters most to markets (longer term) is growth – our call in 2011 has been that Fiat Fool policy would perpetuate a growth slowdown; no matter where Geithner or Lagarde go this week.  As we look at today’s set up for the S&P 500, the range is 40 points or -2.72% downside to 1141 and 0.69% upside to 1181.

 

SECTOR AND GLOBAL PERFORMANCE

 

THE HEDGEYE DAILY OUTLOOK - levels

 

THE HEDGEYE DAILY OUTLOOK - bpgm1

 

THE HEDGEYE DAILY OUTLOOK - sv

 

EQUITY SENTIMENT:

 

SENTIMENT – most bullish data point of the morning is that Wall Street is finally capitulating (right on time – our Italian bond auction and EFSF debate catalyst has been mid-late September since we started making the call in May); bulls in the II survey plummet to 35.5% this morning and bears shoot up to 41%; that’s the 1st bearish spread (bulls minus bears) of 2011.

  • ADVANCE/DECLINE LINE: +1569 (+1788)  
  • VOLUME: NYSE 1070.84 (-1.57%)
  • VIX:  36.91 -4.35% YTD PERFORMANCE: +107.94%
  • SPX PUT/CALL RATIO: 1.71 from 2.20 -22.45%

CREDIT/ECONOMIC MARKET LOOK:

 

FIXED INCOME: UST 10yr fails at my TRADE line of resistance (2.03%); no support to 1.85%

  • TED SPREAD: 34.71
  • 3-MONTH T-BILL YIELD: 0.01%
  • 10-Year: 2.00 from 1.94     
  • YIELD CURVE: 1.79 from 1.73

MACRO DATA POINTS (Bloomberg Estimates):

  •  7:00 a.m.: MBA Mortgage Applications, prior (-4.9%)
  • 8:30 a.m.: Aug. Producer Price Index, est. M/m 0.0%, prior 0.2%
  • 8:30 a.m.: Aug. Retail Sales, est. 0.2%, prior 0.5%
  • 10:00 a.m.: July Business Inventories, est. 0.5%, prior 0.3%
  • 10:30 a.m.: DoE inventories
  • 1 p.m.: U.S. to sell $13b 30-yr bonds reopening

WHAT TO WATCH:

  • ConAgra will withdraw $5.18b offer for Ralcorp unless company engages in “constructive dialogue” by 5 p.m. on Sept. 19
  • ECB will lend two euro-area banks dollars tomorrow, a sign they are finding it more difficult to borrow the greenback in markets
  • Caijing magazine reported China is willing to buy bonds of nations hit by debt crisis, citing Zhang Xiaoqiang, vice chairman of National Development and Reform Commission
  • A majority of Americans don’t believe President Obama’s $447b jobs plan will help lower the unemployment rate; Obama’s approval rating drops to record low 45%: Bloomberg poll
  • Dell (DELL) board authorized added $5b for stock repurchases
  • President Obama promotes jobs plan in Raleigh-Durham, NC, ~1 p.m. Later, Obama attends and delivers remarks at Congressional Hispanic Caucus Institute’s Annual Awards Gala in Washington


COMMODITY/GROWTH EXPECTATION

 

COPPER  - the Doctor is sick. Copper down another full 1% this morning testing its early august lows. Yes Oil holds TRADE line support of $86.03, but both Oil and Copper have bearish/broken TAILS. The TAIL risk trumps the bullish TRADE in oil.

 

THE HEDGEYE DAILY OUTLOOK - dcommv

 

MOST POPULAR COMMODITY HEADLINES FROM BLOOMBERG:

  • Korean Offshore Wind Farm Helps Shipyards Challenge Siemens
  • Crude Drops From Six-Week High on Concern Recovery May Falter
  • Gold May Fall in London as Europe’s Debt Woes Bolster Dollar
  • Silvercorp Plunges After Muddy Waters Says It’s Shorting Stock
  • Fuel-Oil Loss Set for Two-Year Low on Supplies: Energy Markets
  • Corn Futures Extend Losses as U.S. Crop Improves, Soybeans Drop
  • Atlas Iron CEO Rebuffs Approaches, Sees 10-Fold Stock Price Gain
  • Copper Drops as Europe Sovereign-Debt Concern Outweighs Strike
  • Freeport Miners in Peru, Indonesia Will Go on Strike Over Wages
  • Oil, Copper Lead Commodity Declines on Demand Outlook Concerns
  • Wheat Harvest in West Australia May Jump 89% on Weather
  • Oil Drops From Six-Week High as Europe Crisis Threatens Demand
  • China 2011 Corn Harvest May Exceed 180 Million Tons: China Daily
  • West Australia’s Barnett to Visit China for Oakajee Ore Funding
  • Palm Oil Declines as Slowing Global Economy May Hurt Demand
  • Spot Gold Falls, Futures Pare Gains as Stocks, Commodities Drop
  • Aluminum, Zinc ETPs Are Unviable on High Costs, Norilsk Says

CURRENCIES

 

THE HEDGEYE DAILY OUTLOOK - dcurrv

 

EUROPEAN MARKETS

  • EUROPE: As socialists at both the IMF and EU unite, they still haven't delivered the short squeeze headline; DAX down now (still crashing).
  • UK July ILO unemployment +7.9% vs consensus +7.9% and prior +7.9%
  • UK August Claimant count unemployment change +20.3k vs consensus +35.0k vs prior +37.1k
  • Eurozone July Industrial Production +4.2% y/y vs consensus +4.6% and prior revised to 2.6% from +2.9%

 

 

THE HEDGEYE DAILY OUTLOOK - bpem1

 

ASIAN MARKETS

  • ASIA – what’s going on in South Korean and Japanese equities isn’t headline news but that doesn’t mean that these equity market meltdowns cease to exist; KOSPI down hard on big volume last night (down -3.5% and crashing, down -21.5% since May) as the Nikkei hits a fresh 18 month low (lower than the tsunami low) – big economies; big slowdowns.

THE HEDGEYE DAILY OUTLOOK - bpam1

 

MIDDLE EAST

 

THE HEDGEYE DAILY OUTLOOK - me

 

Howard Penney

Managing Director


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