THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP - October 3, 2011


Deflating The Inflation via a Strong Dollar remains our Global Macro call.  Get the US Dollar right, you get a lot of other things right.  As we look at today’s set up for the S&P 500, the range is 44 points or -1.63% downside to 1113 and 2.26% upside to 1157.

 

SECTOR AND GLOBAL PERFORMANCE

 

THE HEDGEYE DAILY OUTLOOK - levels

 

THE HEDGEYE DAILY OUTLOOK - daily sector view

 

THE HEDGEYE DAILY OUTLOOK - global performance

 

 

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: -1836 (-3131) 
  • VOLUME: NYSE 1323.20 (+18.04%)
  • VIX:  42.96 +10.61% YTD PERFORMANCE: +142.03%
  • SPX PUT/CALL RATIO: 1.49 from 2.20 (-31.98%)

 

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 36.42
  • 3-MONTH T-BILL YIELD: 0.02%
  • 10-Year: 1.92 from 1.99     
  • YIELD CURVE: 1.67 from 1.72

 

MACRO DATA POINTS (Bloomberg Estimates):

  • 7 a.m.: Fed’s Fisher speaks on CNBC
  • 10 a.m.: Construction spending, est. (-0.2%), prior (-1.3%)
  • 10 a.m.: ISM Manufacturing, est. 50.3, prior 50.6
  • 11 a.m.: Fed to purchase $2.75b-$3.5b in notes/bonds
  • 11 a.m.: Export inspections: corn, soybeans, wheat
  • 11:30 a.m.: U.S. to sell $29b 3-mo. bills, $27b 6-mo. bills
  • 1 p.m.: Fed’s Fisher speaks on Bloomberg Radio
  • 6 p.m.: Fed’s Lacker speaks in Madison, Wis.

 WHAT TO WATCH:

  • European finance ministers meet in Luxembourg to consider how to shield banks from the debt crisis, boost region’s rescue fund
  • Yahoo will hold 9 a.m. press conference; Alibaba Chairman Jack Ma said on Sept. 30 very interested in Yahoo, talks snagged over political issues
  • Apple iPhone announcement tomorrow; watch for increasing speculation about iPhone 5 capability
  • N.J. Gov. Chris Christie on brink of decision whether to seek Republican nomination for president
  • Supreme Court’s term opens
  • Congress returns from recess
  • Anadarko (APC) won’t have to face personal-injury claims related to 2010 Gulf of Mexico spill, federal judge ruled
  • Arch Coal (ACI) cut forecast for 2011 adjusted EPS

 

COMMODITY/GROWTH EXPECTATION                                                                    

 

COMMODITIES – everyone and their brother knows Dr Copper is crashing now, and this is perpetuating weakness (down another -3.1% to start the wk making fresh lows at $3.05/lb). Every commodity in the Hedgeye model is now bearish TRADE and TREND, including Gold (TREND resistance $1680)

 

THE HEDGEYE DAILY OUTLOOK - daily commodity view

 

 

MOST POPULAR COMMODITY HEADLINES FROM BLOOMBERG:

  • China Manufacturing Stability May Ease ‘Hard Landing’ Risks
  • Raw-Material Bets Cut 26% in Biggest Rout Since ’08: Commodities
  • Hedge Funds Cut Oil Bets Most in Seven Weeks: Energy Markets
  • Shell Declares Force Majeure After Fire, Cancels Oil Supply
  • Gold Rises for Third Day as Greek Debt May Spur Increased Demand
  • Obama Said Poised to Submit Three Trade Accords to U.S. Congress
  • Platinum-Gold Ratio Tumbles to Lowest Level Since at Least 1987
  • Commodities Drop to 10-Month Low as European Industry Shrinking
  • Copper Falls to 14-Month Low on Prospects for Demand to Weaken
  • Crude Extends Declines in New York After Closing at One-Year Low
  • European Goldfields Rises in London on $600 Million Qatari Loan
  • Corn Extends Declines After Biggest Monthly Drop in Five Decades
  • Oil Falls After Closing at One-Year Low as Europe Ministers Meet
  • Petrobras Bonds Trailing Pemex on Higher Costs: Brazil Credit
  • Palm Oil Tumbles to One-Year Low as Soybeans Drop on Stockpiles
  • Copper Falls to 14-Month Low Before Manufacturing: LME Preview
  • U.S. Mint American Eagle Silver Coin Sales Most Since January
  • Freeport, Striking Peru Copper Miners to Resume Wage Talks Today
  • U.A.E. Says World Oil Use Stable, No Risk of Plunging Demand

CURRENCIES                                                                             

 

THE HEDGEYE DAILY OUTLOOK - daily currency view

 

 

EUROPEAN MARKETS

 

GREECE – so they fibbed again… what does that matter in a globally interconnected game of risk where the entire construct of the EUR/USD pair continues to trade off of politics? Greece leads the headlines and Germany’s DAX broke my critical TRADE line of 5439 support again. Not good.

 

THE HEDGEYE DAILY OUTLOOK - euro performance

 

 

ASIAN MARKETS

 

ASIA – complete meltdown where markets were opened last night w/ Hong Kong leading the crashers on the downside (down -4.4% overnight; down 31% since April 8th); Thailand and Indonesia collapsed for -4.7% and -5.9% moves, respectively. Asian Growth Slowing.

 

THE HEDGEYE DAILY OUTLOOK - asia performance

 

 

MIDDLE EAST

 

THE HEDGEYE DAILY OUTLOOK - MIDEAST PERFORMANCE

 

 

 

Howard Penney

Managing Director