THE HEDGEYE DAILY OUTLOOK

THE HEDGEYE DAILY OUTLOOK

 

TODAY’S S&P 500 SET-UP - September 26, 2011

 

There is no Euro-TARP bazooka this morning, but there is plenty of policy noise making – that’s what central planners doLagarde wants it; Geithner wants it; so it’s coming –time/size remains the question.

 

Two TRILLION is being floated as the number this morning and that’s in line with what we’ve been saying since our conference call on Euro-TARPing last week.  Important calendar catalysts are Merkel meeting with Greece’s PM tomorrow in Germany, and the Bundestag voting bailout size Thursday.

 

As we look at today’s set up for the S&P 500, the range is 23 points or -1.36% downside to 1121 and 0.67% upside to 1144.

 

SECTOR AND GLOBAL PERFORMANCE

 

THE HEDGEYE DAILY OUTLOOK - hrmsv

 

THE HEDGEYE DAILY OUTLOOK - bpgm1

 

THE HEDGEYE DAILY OUTLOOK - hrmsp

 

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: 800 (+3195) 
  • VOLUME: NYSE 1229.80 (-28.34%)
  • VIX:  41.25 -0.24% YTD PERFORMANCE: +132.39%
  • SPX PUT/CALL RATIO: 1.31 from 2.75 (-52.49%)

 

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 36.53
  • 3-MONTH T-BILL YIELD: 0.01%
  • 10-Year: 1.84 from 1.72     
  • YIELD CURVE: 1.52 from 1.67

 

MACRO DATA POINTS (Bloomberg Estimates):

  • 8:30 a.m.: Chicago Fed Nat Activity Index, Aug., est. (- 0.4), prior (-0.06)
  • 9:15 a.m.: Fed’s Raskin speaks on monetary policy in Washington
  • 9:30 a.m.: Fed’s Bullard speaks in New York
  • 9:30 a.m.: ECB’s Bini Smaghi speaks in New York
  • 10 a.m.: New home sales, Aug., est. 294k (down -1.3%)
  • 10:30 a.m.: Dallas Fed Manufacturing, Sept., est. (-8), prior (-11.4)
  • 11:30 a.m.: U.S. to sell $29b 3-mo. bills, $27b 6-mo. bills
  • Noon: ECB’s Weidmann speaks in Washington
  • 3 p.m.: Fed’s Kocherlakota speaks on debt panel in Chicago

 WHAT TO WATCH:

  • Finance ministers, central bankers urged European officials to intensify efforts to contain debt crisis as IMF, World Bank held annual meetings in Washington
  • Berkshire Hathaway said to increase stake in Tesco to 3.64% from 3.21%
  • Netflix, DreamWorks Animation complete streaming deal, NYT
  • Apple may have cut 4Q iPad orders by 25%, JPMorgan says, citing indications from supply-chain vendors
  • Pimco forecast advanced economies will stall over the next yr as Europe slides into a recession
  • Axis-Shield disappointed Alere hasn’t taken notice of its investors’ rebuttal of Alere’s 460p-shr offer, which “fundamentally undervalues” Axis-Shield’s prospects
  • Clorox (CLX) Carl Icahn withdrew director slate after concluding holders wouldn’t approve move

COMMODITY/GROWTH EXPECTATION

 

Deflating The Inflation remains a big theme of ours (because we are bullish on the US Dollar); in the end, this is great for Americans (bad for the stocks that, if you dropped them on your head (or foot or something) would hurt); Copper down another -1.6% this morning at 3.22/lb and has crashed alongside the price of oil by 28-29% since April.

 

THE HEDGEYE DAILY OUTLOOK - dcommv

 

MOST POPULAR COMMODITY HEADLINES FROM BLOOMBERG:

  • Commodities Drop to 10-Month Low as Silver Slumps on Debt Risk
  • Gold Slides More Than Comex Margins as Investors Cover Losses
  • Raw-Materials Rout Drives Bullish Futures Down 20%: Commodities
  • LME Facing Takeover as Record Commodity Volumes Draw Bidders
  • Mongolia Seeks Bigger Stake in Rio, Ivanhoe Copper Mine
  • Oil Falls to Seven-Week Low on Bets Europe Crisis to Cut Demand
  • Investors Favor Cash Over Commodities in Dim Poll Outlook
  • Industrial Metals Tumble as Europe Debt Crisis May Curb Growth
  • Australian Precious-Metals Exchange Plans to Start Next Month
  • Spot Gold Advances for First Day in Four as Futures Rebound
  • Palm Oil Headed for First Drop in Three Years to Cut Costs
  • Monsoon Rainfall Exceeding Forecast to Boost India Crops
  • Indonesia’s Biggest Tin Producing Region May Suspend Exports
  • Armajaro Trading Moving Focus From Futures to Actual Commodities
  • Copper in Shanghai Tumbles by Daily Trading Limit
  • Oil Trades Near 6-Week Low on Bets European Crisis to Cut Demand
  • Copper Falls Below $7,000 a Ton to Lowest Since July 2010
  • Copper Has Most ‘Fundamental’ Risk to Decline, Macquarie Says
  • Palm Oil Drops on Expectations of Higher Supplies, Weak Demand

CURRENCIES

 

THE HEDGEYE DAILY OUTLOOK - dcurrv

 

EUROPEAN MARKETS

 

EUROPE: trying to rally in front of the Bazooka but volume not convincing yet and DAX remains under my key TRADE line of 5439 resistance.

 

THE HEDGEYE DAILY OUTLOOK - bpem1

 

ASIAN MARKETS

 

ASIA – crashing Asian equity prices continued overnight, which is a very bearish leading indicator that A) is not new but B) is worsening at an accelerating rate; Thailand dropped -5% last night, followed by Philippines down -4.2% and Indonesia down another -3.2% (these 3 markets are in the Top 10 in the world; so part of this is mean reversion; part liquidation in EM).

 

THE HEDGEYE DAILY OUTLOOK - bpam1

 

MIDDLE EAST

 

THE HEDGEYE DAILY OUTLOOK - me

 

Howard Penney

Managing Director


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