THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP - November 17, 2011

 

As we look at today’s set up for the S&P 500, the range is 28 points or -1.04% downside to 1224 and 1.22% upside to 1252. 

 

SECTOR AND GLOBAL PERFORMANCE

 

THE HEDGEYE DAILY OUTLOOK - levels 1117

 

THE HEDGEYE DAILY OUTLOOK - daily sector view

 

THE HEDGEYE DAILY OUTLOOK - global performance

 

 

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: -1594 (+795) 
  • VOLUME: NYSE 918.72 (+17.7%)
  • VIX:  +33.51 +7.3% YTD PERFORMANCE: +88.79%
  • SPX PUT/CALL RATIO: 2.54 from 1.51 (+68%)

 

 

CREDIT/ECONOMIC MARKET LOOK:

 

TREASURIES – KM is long both the Long-bond (TLT) and Growth Slowing (Treasury Flattener, FLAT) and have been using an immediate-term TRADE target on 10yr yields of 1.98% - we’re there this morning, so the gross exposure call now is to sell some Treasuries and start allocating assets to US Equities. Take your time.

  • TED SPREAD: 46.60
  • 3-MONTH T-BILL YIELD: 0.00%
  • 10-Year: 2.00 from 2.00    
  • YIELD CURVE: 1.75 from 1.76

 

MACRO DATA POINTS (Bloomberg Estimates):

  • 8:30am: Jobless claims, est. 395k (prior 390k)
  • 9:45am: Bloomberg Consumer Comfort, est. -50.4 (prior -51.6)
  • 10am: Philadelphia Fed, est. 9.0 (prior 8.7)
  • 10am: Freddie Mac mortgage rates
  • 10:30am: EIA natural gas storage change
  • 12:30pm: Fed’s Pianalto speaks on economy in Kentucky
  • 12:50pm: Fed’s Dudley speaks on economy at West Point
  • 1pm: U.S. to sell $11b 10-yr TIP reopening
  • TBA: Mortgage Delinquencies (prior 8.44%)

 

 

WHAT TO WATCH: 

  • Spain sold 3.56b euros of 10-yr bonds with avg yield of almost 7%, the most since the euro’s creation
  • Builders probably began work on fewer homes in Oct; median est. starts fell 7.3% to 610k annual rate
  • Energy Secretary Steven Chu said final decisions on Solyndra were mine”; Chu to testify before House panel this morning
  • American Airlines pilot talks may recess for 2 wks with sides “far apart”
  • Northern Rock agreed to be sold to Virgin Money Holdings for $1.2b
  • AT&T’s Glenn Lurie says co. in talks to start selling Nokia’s WP smartphones next year
  • Guggenheim Partners said to seek buyers for Claymore Investments
  • MF Global subpoenas said to be issued by Chicago U.S. Attorney
  • Gartner sees inventory correction in semiconductor industry to damp sales at least thru 2011
  • House Democratic group urging Congress to overhaul the tax code by lowering corporate rates, removing breaks and easing the burden on U.S. companies’ overseas operations
  • Obama said cutting the U.S. budget won’t reduce the nation’s military and economic commitments to the Asia-Pacific region
  • Olympus pledges $3.3b debt cut, will report earnings by Dec. 14

 

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • Candy-to-Fuel Demand Cuts Oil Inventory to ‘75 Low: Commodities
  • Gold Demand Rose 6% in Third Quarter on European Debt Crisis
  • Oil Falls From Five-Month High on Signs Europe Crisis Spreading
  • Gold Imports by India Drop 20% as Record Prices Deter Buyers
  • Buffett’s Burlington Exploits Boxed Asia Grain Up 29%: Freight
  • Copper Declines Most in a Week as European Crisis May Spread
  • Gold Falls in New York, London as Equities Drop May Spur Sales
  • Wheat Falls for Second Day as Syria Rejects Tender on Prices
  • Sugar Falls to Seven-Week Low on Indian Exports; Cocoa Slides
  • Gold Top Pick at Morgan Stanley as Europe Debt Spurs Demand
  • Soybean Imports by Japan May Drop 11%, Ministry Says
  • Severstal CEO Mordashov Says Company Deserved U.S. Vehicle Loan
  • Orange Juice May Climb on ‘Cup and Handle’: Technical Analysis
  • U.S. Crude Discount Versus Brent May End Soon: Chart of the Day
  • COMMODITIES DAYBOOK: Candy-to-Fuel Demand Cuts Oil Inventories
  • China’s Gold Jewelry Demand Gains 13% to Make It World’s Largest
  • Japan Restricts Some Rice Shipments After Radiation Found

THE HEDGEYE DAILY OUTLOOK - daily commodity view

 

 

CURRENCIES

 

THE HEDGEYE DAILY OUTLOOK - daily currency view

 

 

EUROPEAN MARKETS

 

SPAIN – their bond auction was a mess (3.6B of 10yr fiat at 6.97%) and now both Spanish and French Equities are moving to immediate-term TRADE oversold alongside the Euro. That Goldman call to buy the Euro last week is now officially the worst FX call on Old Wall St of the year; 1.34 last.


THE HEDGEYE DAILY OUTLOOK - euro performance

 

 

ASIAN MARKETS

 

ASIA – we’ve been the 2011 Bear on Growth Slowing and now the high-frequency data is slowing even faster than we thought; I haven’t seen the legacy media lead w/ this yet and I don’t expect them to, but Singapore just printed a DOWN -16.2% y/y export # for OCT vs what was already startling at -4.6% in SEP. Indian stocks joined HK in crash mode overnight.

 

THE HEDGEYE DAILY OUTLOOK - asia performance

 

 

MIDDLE EAST

 

THE HEDGEYE DAILY OUTLOOK - MIDEAST PERFORMANCE

 

 

 

The Hedgeye Macro Team

Howard Penney

Managing Director

 

 

 


People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

read more

UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more

Got Process? Zero Hedge Sells Fear, Not Truth

Fear sells. Always has. Look no further than Zero Hedge.

read more

REPLAY: Review of $EXAS Earnings Call (A Hedgeye Best Idea Long)

Our Healthcare Team made a monster call to be long EXAS - hear their updated thoughts.

read more

Capital Brief: 5 Things to Watch Right Now In Washington

Here's a quick look at some key issues investors should keep an eye on from Hedgeye's JT Taylor and our team of Washington Policy analysts in D.C.

read more

Premium insight

[UNLOCKED] Today's Daily Trading Ranges

“If I could only have one thing of the many things we have it would be my daily ranges." Hedgeye CEO Keith McCullough said recently.

read more

We'll Say It Again: Leave Your Politics Out of Your Portfolio

If your politics dictates your portfolio positioning, the Democrats and #NeverTrump crowd out there have had a hell of a week.

read more

Cartoon of the Day: 'Biggest Tax Cut Ever'

President Donald Trump's economic team unveiled what he called last week, "the biggest tax cut we’ve ever had.” Before you get too excited about that hang on a sec. "Trump Tax Reform ain’t gettin’ done anytime soon," Hedgeye CEO Keith McCullough wrote in today's Early Look.

read more

Neurofinance: The Psychology Behind When To Sell A Bull Market

"Most momentum investors stay invested too long, under-reacting and holding tight after truly bad news finally arrives to break the trend," writes MarketPsych's Richard Peterson.

read more