THE HEDGEYE DAILY OUTLOOK
TODAY’S S&P 500 SET-UP - October 19, 2011
Another day and another rumor that France and Germany has it all figured out. We see bigger problems ahead. As we posted yesterday, “FRANCE IS GOING TO GET DOWNGRADED and we continue to be Short EUR-USD (FXE). France’s credit rating is going to get downgraded – now the question is when, and what becomes of the EFSF?
As we look at today’s set up for the S&P 500, the range is 43 points or -2.40% downside to 1196 and 1.11% upside to 1239.
SECTOR AND GLOBAL PERFORMANCE
EQUITY SENTIMENT:
- ADVANCE/DECLINE LINE: +2074 (+3961)
- VOLUME: NYSE 1085.27 (+19.85%)
- VIX: 31.56 -5.48% YTD PERFORMANCE: +77.80%
- SPX PUT/CALL RATIO: 1.64 from 2.05 (-20.21%)
CREDIT/ECONOMIC MARKET LOOK:
- TED SPREAD: 39.39
- 3-MONTH T-BILL YIELD: 0.04%
- 10-Year: 2.19 from 2.18
- YIELD CURVE: 1.91 from 1.90
MACRO DATA POINTS (Bloomberg Estimates):
- 7 a.m.: MBA Mortgage, prior 1.3%
- 8:30 a.m.: Consumer Price Index, M/m, est. 0.3%, prior 0.4%
- 8:30 a.m.: Fed’s Rosengren speaks at Boston Fed conference
- 8:30 a.m.: Housing starts, est. 590k, prior 571k
- 8:30 a.m.: Building permits, est. 610k, down 2.4%
- 9 a.m.: Fed’s Lockhart speaks on Latin America in Atlanta
- 10:30 a.m.: DoE inventories
- 2 p.m.: Fed Beige Book
- 4:30 p.m.: Fed’s Lockhart speaks on leadership in Atlanta
WHAT TO WATCH:
- Apple shares drop after missing 4Q sales, EPS est.; Apple says 1Q will be best yet for iPhone sales
- Consumer prices probably climbed 0.3% in September, smallest gain in three months, economists est. ahead of today’s report
- UAW ratified proposed contract with Ford, largest UAW-Ford Local 600 in Dearborn said last night
- President Obama wraps up bus tour of North Carolina, Virginia
- Day two of Western Republican Leadership Conference in Las Vegas, with Republican presidential candidates among speakers
COMMODITY/GROWTH EXPECTATION
OIL: gets squeezed right back up to our intermediate-term TREND line of resistance of $89.12 WTIC.
We shorted shorted OIL yesterday
MOST POPULAR COMMODITY HEADLINES FROM BLOOMBERG:
- Nespresso Customers Cheat on Clooney in Coffee Wars: Retail
- Most Accurate China Analyst Sees No Sudden Policy Easing
- Sugar Shortages Pummel Europe as World Glut Grows: Commodities
- Maersk Shareholders Suffering With Too Many Containers: Freight
- Bakken Turns Oasis Into Target as Fracking Costs Slide: Real M&A
- BNP Paribas Sued by U.S. Over Banker’s Alleged Role in Fraud
- Oil Trades Near Highest in a Month as Goldman Sees ’Upside Risk’
- Gold Falls for Third Day as Rescue-Fund Report Limits Demand
- CFTC Votes 3-2 to Approve Limits on Commodity Speculation
- Copper Drops for Third Day as Europe’s Crisis May Curb Demand
- De Beers CEO Says Diamond Prices May ‘Stick’ After 35% Gain
- Years of Wal-Mart Violations Forced China Action, Official Says
- Soybean Imports by China May Jump 22%, Noble Group Says
- Rice May Rally on Thai Floods, State Buying, Sumeth Says
- Vale May Discuss Iron-Ore Price as Clients Seeks Better Deal
- Singapore Exchange Iron-Ore Swaps Post Record Daily Volume
- Oil Trades Near Highest in a Month as Goldman Sees ‘Upside Risk’
- COMMODITIES DAYBOOK: Copper, Oil Fall on Global Growth Concern
- Wheat Gains a Fourth Day as Cold Weather May Hurt Russian Crop
- Copper Drops as China, Europe Dim Demand Outlook: LME Preview
CURRENCIES
EUROPEAN MARKETS
EUROPE: continues to see support at the TRADE lines in the DAX, CAC, MIB, etc; people are scared to be short the bazooka, rightfully
ASIAN MARKETS
ASIA: mixed moves with HK recapturing its TRADE line of 18245 support as China continues to fall (down another -0.25%)
MIDDLE EAST
The Hedgeye Macro Team
Howard Penney
Managing Director