THE HEDGEYE DAILY OUTLOOK
TODAY’S S&P 500 SET-UP - October 17, 2011
It should be as hard to sell/short this morning as it was to buy/cover on October 4th– every market (countries, currencies, commodities, etc) in Global Macro is now bullish TRADE; bearish TREND, making this a very tough spot not to cover. Coming out of the G20 meetings this weekend, they loosely set everyone up for a bazooka event being timed for the October 23rdEU Summit meeting (Asia ripped last night on this and it’s been the #1 headline on Bloomberg since), but…
As we look at today’s set up for the S&P 500, the range is 63 points or -3.72% downside to 1179 and 1.42% upside to 1242.
SECTOR AND GLOBAL PERFORMANCE
EQUITY SENTIMENT:
- ADVANCE/DECLINE LINE: 2306 (+2703)
- VOLUME: NYSE 847.19 (-5.71%)
- VIX: 28.24 -8.01% YTD PERFORMANCE: +59.10%
- SPX PUT/CALL RATIO: 1.71 from 1.40 (+22.22%)
CREDIT/ECONOMIC MARKET LOOK:
- TED SPREAD: 38.95
- 3-MONTH T-BILL YIELD: 0.02%
- 10-Year: 2.26 from 2.19
- YIELD CURVE: 1.98 from 1.90
MACRO DATA POINTS (Bloomberg Estimates):
- 8:30 a.m.: Empire Manufacturing, est. (-4.00)
- 9:15 a.m.: Industrial production, est. 0.2%
- 9:15 a.m.: Capacity utilization, est. 77.5%
- 11:30 a.m.: U.S. to sell $29b 3-mo., $27b 6-mo. bills
- 7:30 p.m.: Fed’s Lacker speak on economy in Maryland
- 8 p.m.: Fed’s Evans speaks in Detroit
WHAT TO WATCH:
- Kinder Morgan agreed to purchase El Paso in a $21b cash-and- stock deal; watch other natural gas cos.
- BP reached settlement with Anadarko Petroleum on all claims related to Deepwater Horizon accident in Gulf of Mexico
- EU Economic and Monetary Affairs Commissioner Olli Rehn said clarity on plan to contain region’s debt crisis will emerge in “coming days”
- Sales data for Apple’s iPhone 4S possible; note Apple will release quarterly earnings tomorrow
COMMODITY/GROWTH EXPECTATION
MOST POPULAR COMMODITY HEADLINES FROM BLOOMBERG:
- BP Says Anadarko to Pay $4 Billion to Settle Gulf Spill Claims
- Hedge Funds Add to Wagers in Biggest Rally of 2011: Commodities
- China Growth May Top 9% as Global Slump Poses ‘Biggest Risk’
- Rio Tinto to Sell 13 Aluminum Assets in Australia, U.S., Europe
- Oil Gains After Europe Pledges Debt Strategy; Bullish Bets Rise
- Hedge Funds Raise Bullish Bets as Oil Rises $10: Energy Markets
- Gold May Climb for Second Day With Equities on Europe Optimism
- Copper Rises for Second Day as European Crisis May Be Contained
- Fortescue Boosts Ore Shipments 21% to Meet Chinese Demand
- Freeport Shuts Grasberg Mine After Blockade, Fatal Shooting
- China Steel Prices, at 10-Month Low, May Trigger Output Cuts
- Oil Trades Near Highest in a Month on Europe Debt Rescue Efforts
- Gold Gains to 3-Week High on Europe Concern, Commodities Rally
- Corn, Wheat Rise for Second Day on Stronger U.S. Export Sales
- Copper Drops in London, Reversing Earlier Gains
- Palm Oil Advances to Three-Week High as Europe May Avert Crisis
- Rubber Climbs to Three-Week High After G-20, Thai Flood Concerns
- Floods May Damage 3.5 Million Tons of Thai Rice, Group Says
CURRENCIES
EUROPEAN MARKETS
GERMANY – Schaeuble (Finance Minister of Germany who carries the big stick) just hit the wires saying he doesn’t expect to have a bazooka solution by the 23rd – that’s a big timing problem – and one that I think will be ongoing (can send you replay/podcast if the call we did on this Friday if you need details). Timing matters, big time; especially with TREND lines broken
ASIAN MARKETS
SINGAPORE – stealth number that the manic media hasn’t even mentioned this morning, but Singapore put up a bomb of an export (non-oil) number for SEP at down -4.5% y/y (vs +3.9% in AUG, which was too low to begin with). Singapore is the trusted Chinese advisor and all market signals are saying China’s SEP numbers (tonight) could be bad
MIDDLE EAST
Howard Penney
Managing Director