THE HEDGEYE DAILY OUTLOOK

THE HEDGEYE DAILY OUTLOOK

 

TODAY’S S&P 500 SET-UP - September 23, 2011

 

As we look at today’s set up for the S&P 500, the range is 47 points or -0.93% downside to 1119 and 3.23% upside to 1166.

 

SECTOR AND GLOBAL PERFORMANCE

 

THE HEDGEYE DAILY OUTLOOK - hrmsv

 

THE HEDGEYE DAILY OUTLOOK - bpgm1

 

THE HEDGEYE DAILY OUTLOOK - hrmsp

 

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: -2395 (-243) 
  • VOLUME: NYSE 1716.20 (+41.80%)
  • VIX:  41.35 +10.80% YTD PERFORMANCE: +132.96%
  • SPX PUT/CALL RATIO: 2.75 from 2.66 (+3.62%)

 

CREDIT/ECONOMIC MARKET LOOK:

 

UST YIELD CURVE: heavy and compressing if dropped on your head; 152bps wide, new low for the cycle; very bad for banks

 

10YR UST Yields hitting record lows as academics refer to chapter 2 on buy stocks when bond yields are?

  • TED SPREAD: 35.80
  • 3-MONTH T-BILL YIELD: 0.00%
  • 10-Year: 1.72 from 1.88     
  • YIELD CURVE: 1.52 from 1.67

 MACRO DATA POINTS (Bloomberg Estimates):

  • 1 p.m.: Baker Hughes rig count
  • 1:30 p.m.: Fed’s Dudley to speak on panel in Washington D.C.
  • 2:45 p.m.: Fed’s Williams on unconventional monetary policy in Zurich
  • 4:30 p.m.: ECB’s Trichet speaks in Washington

 WHAT TO WATCH:

  • IMF/World Bank meetings take place and go over the weekend. Today, watch for comments from IMF Managing Director Lagarde, Fed President Dudley, Citigroup CEO Pandit, ECB President Trichet
  • Reliance Industries said to be studying possible purchases of shale-gas assets in Canada; may also invest in clean- energy ventures
  • Solyndra CEO Brian Harrison and CFO W.G. Stover appear before the House Energy and Commerce Committee
  • Hewlett-Packard CEO Meg Whitman plans to stick by strategies set in motion by her predecessor
  • Napster founder Sean Parker, Ron Burkle may partner on bid for EMI, N.Y. Post says
  • Liberty Media’s spinoffs of Liberty Capital, Liberty Starz tracking stocks may be completed
  • Bank of America said to be in talks to sell its stake in the biggest U.S. Pizza Hut franchisee for more than $800m

COMMODITY/GROWTH EXPECTATION

 

COMMODITIES: disaster continues for hedge funds (Hedgeye has a 0% asset allocation to Commodities and reiterate that call this morning, long USD)

 

THE HEDGEYE DAILY OUTLOOK - dcommv

 

MOST POPULAR COMMODITY HEADLINES FROM BLOOMBERG:

  • Copper, Nickel, Tin Slump on European Debt, Global Growth Risk
  • Commodities Set for Worst Week in Four Months as Metals Tumble
  • China Coal Outage to Spur Imports as Prices Rise: Energy Markets
  • Gold Set for Worst Week in More Than 4 Months on Global Selloff
  • Oil Rises After Sliding to Six-Week Low; Heads for Weekly Drop
  • Record Harvest Cooling Inflation Checks Yield Rise: India Credit
  • Goldman Sticks With ‘Resilient’ Commodities on Supply Risks
  • Gold May Gain on Fed Measures, Europe Concerns, Survey Shows
  • Copper Extends Drop to Lowest Since August 2010: LME Preview
  • Deere CEO Won’t Let Asia Rice Paddy Sink $50 Billion Sales Goal
  • Peruvian Congress Approves Law Setting Mining Tax on Profits
  • Copper, Nickel, Tin Tumble on Debt, Growth Concerns
  • Iron Ore’s Four-Year Slide Hitting Mining Earnings: Commodities
  • Palm Oil Declines as Growing Recession Concerns Reduce Demand
  • Soybeans Set for Worst Weekly Loss in 2 Years on Demand Concern
  • Gold May Drop as Investors Sell to Cover Losses in Other Assets
  • Europe Central Banks’ Gold Sales Set for Least Since 1999 Accord
  • Oil Erases Gain in New York as Finance Heads Discuss Growth Risk

CURRENCIES

 

THE HEDGEYE DAILY OUTLOOK - dcurrv

 

EUROPEAN MARKETS

 

EUROPE: contagion spreading to Russia (crashing -36% since May), Poland, and Austria (both markets down -1% this morning, never mind "bounce")

 

EUROPE: only "bounces" are in the largest hedge fund short position markets (Italy and Spain); DAX and CAC can barely sustain bids.

 

THE HEDGEYE DAILY OUTLOOK - bpem1

 

ASIAN MARKETS

 

ASIA: there was no bounce; crashing in Korea and Hong Kong continue making the S&P 500 hostage to crash (-20% drawdown from April) mean reversion

 

KOREA: KOSPI smoked for another -5.7% drop, taking the crash since May 2 to -24%; Korean bank exec jumped out of his window last night; sad

 

<CHART9>

 

MIDDLE EAST

 

THE HEDGEYE DAILY OUTLOOK - me

 

Howard Penney

Managing Director


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