THE HEDGEYE DAILY OUTLOOK
TODAY’S S&P 500 SET-UP - November 4, 2011
Get the US Dollar right, you’ll get a lot of other things (beta) right! As we look at today’s set up for the S&P 500, the range is 16 points or -0.80% downside to 1251 and 0.46% upside to 1267.
SECTOR AND GLOBAL PERFORMANCE
EQUITY SENTIMENT:
- ADVANCE/DECLINE LINE: +1303 (-695)
- VOLUME: NYSE 1002.25 (+4.69%)
- VIX: 30.50 -6.84% YTD PERFORMANCE: +71.83%
- SPX PUT/CALL RATIO: 1.55 from 2.29 (-32.07%)
CREDIT/ECONOMIC MARKET LOOK:
TREASURIES: long end of the US treasury yield curve has been yelling that this unemployment report is going to be bad again; stay tuned
- TED SPREAD: 43.50
- 3-MONTH T-BILL YIELD: 0.01%
- 10-Year: 2.09 from 2.03
- YIELD CURVE: 1.85 from 1.80
MACRO DATA POINTS (Bloomberg Estimates):
- 8:30 a.m.: Change in non-farm payrolls, est. 95k, prior 103k
- 8:30 a.m.: Unemployment rate, est. 9.1%, prior 9.1%
- 1 p.m.: Fed’s Tarullo speaks in Washington on regulation
- 1 p.m.: Baker Hughes rig count
- 4:05 p.m.: Fed’s Williams speaks in Santa Clara, Calif.
WHAT TO WATCH:
- Greek PM George Papandreou’s government faces confidence vote in parliament; referendum canceled
- G-20 chiefs meeting in Cannes, France, are pushing European authorities to flesh out, enact a week-old rescue plan that has already shown signs of unraveling
- Basel Committee on Banking Supervision scheduled to release list of so-called global systemically important institutions following G-20 meeting
- MF Global’s Asian units may be sold as soon as this weekend after liquidators received between 30 and 40 “credible” purchase offers: WSJ
COMMODITY/GROWTH EXPECTATION
MOST POPULAR COMMODITY HEADLINES FROM BLOOMBERG:
- Ex-Credit Suisse Oil Head McKenna Starts Mastic Hedge Fund
- Gartman Sees Euro Slump Pushing Gold to Record: Chart of the Day
- RBA Cuts Growth, CPI Forecasts as Europe’s Turmoil Deepens
- Yingluck Banks on $26 Billion Plan After Flood ‘Stumble’
- Wheat Plunging as Stockpiles Climb to 10-Year High: Commodities
- India Economy Faces ‘Critical’ Coal Shortage: Chart of the Day
- Oil Trades Near Three-Month High as Greece Cancels Referendum
- Gold Traders More Bullish as Hedge Funds Increase Bets on Gains
- Stocks, Oil Rise, Treasuries Drop as Greece Moves Toward Bailout
- Heating Fuel at Record as European Diesel Surges: Energy Markets
- Chinese Iron Ore Miners Losing Money at Current Prices, UBS Says
- Copper Gains for Third Day as Greece Near Bailout, ECB Cuts Rate
- Malaysia’s Export Growth Quickens on Higher Sales of Commodities
- Thai Rice Exports Seen Plunging on State Buying, Flooding
- Gold Pares Second Weekly Increase as Investors Lock in Gains
- Credit Suisse Brazil Unit Said to Shut Agriculture Trading Desk
- Starbucks Fourth-Quarter Profit Rises 29% as U.S. Sales Gain
- Abramovich Says He Feared Russia’s Murderous Aluminum Trade
- Vale Marketing Head Gutemberg Leaves Amid China Price Talks
CURRENCIES
EURO – we covered at TRADE line support (and sold the USD) on Tuesday at Euro 1.36. Now we can re-short it on the mini-squeeze back up to 1.39-1.40 (and buy the USD back). Just managing risk around a proactively predictable FX range.
Eurozone Producer Prices +5.8% y/y in SEP and set to rip higher again in OCT/NOV as policies to inflate continue
EUROPEAN MARKETS
FRANCE – there’s nothing stealth about what either the French stock or bond market continues to tell us – its explicit - France is entering a period of intermediate-term stagflation; this morning’s failure to capture TREND line resistance (3403) combined with a nasty Services PMI print of 44.6 for OCT (vs 46 in SEP) tells us all we need to know to be shorting French stocks on green.
ASIAN MARKETS
CHINA – stealth move higher in Chinese stocks continued overnight as the Shanghai Comp closed up for the 9th day out of the last 10. Heard from large constituencies in the hedge fund community that China (as in the country) was going off a cliff in early October. Hearing crickets now. Our predictive tracking algorithms have Chinese GDP growth bottoming (sequential slowdown) in Q1 of 2012.
MIDDLE EAST
The Hedgeye Macro Team
Howard Penney
Managing Director
