TODAY’S S&P 500 SET-UP - November 25, 2011
As we look at today’s set up for the S&P 500, the range is 42 points or -0.67% downside to 1154 and 2.94% upside to 1196.
SECTOR AND GLOBAL PERFORMANCE
EQUITY SENTIMENT:
- ADVANCE/DECLINE LINE: -2332 (-708)
- VOLUME: NYSE 876 (-.025%)
- VIX: +33.98 -2.85% YTD PERFORMANCE: +91.44%
- SPX PUT/CALL RATIO: 1.67 from 1.76 (-5.1%)
CREDIT/ECONOMIC MARKET LOOK:
- TED SPREAD: 49.64
- 3-MONTH T-BILL YIELD: 0.02%
- 10-Year: 1.92 from 1.88
- YIELD CURVE: 1.65 from 1.86
MACRO DATA POINTS (Bloomberg Estimates):
- No U.S. economic data releases scheduled
- Italian borrowing costs surge at bill, coupon auctions
WHAT TO WATCH:
- Many retailers opened on Thanksgiving Day, others at midnight, as Black Friday marks traditional beginning of holiday-shopping season; discounting more widespread than last year as retailers try woo shoppers spooked by global economic uncertainty, stagnant job growth
- AT&T said yesterday will take $4b charge, pulled application from FCC to buy T-Mobile USA to focus on DOJ clearance
- Microsoft yesterday said to sign non-disclosure agreement with Yahoo
- Chevron yesterday was blocked from drilling in Brazil while government probes recent spill
- Olympus’s former president Michael C. Woodford pledges to work with board to try and avoid delisting after 3 executives implicated in scheme to hide losses resigned
- India approves allowing overseas companies to own as much as 51% of retailers selling more than one brand, paving the way for global cos. such as Wal-Mart Stores and Tesco to own stores
- Hungarian bond yields rise most since February 2009 after Moody’s cuts rating to junk
- ECB’s Coene says rate cut probable if current trends continue
- Egypt’s ruling military council asks former Prime Minister Kamal el-Ganzouri to form new government
- German Chancellor Angela Merkel yesterday ruled out joint euro-area borrowing, expanded role for ECB in fighting debt crisis
- Italy meets max target of EU2b zero coupon auction, borrowing costs surge.
- No IPOs expected to price
COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)
- Bank Commodity Staff Turnover Seen Gaining as Rules Tighten
- Record Gold Hoard Spurs Bullish Bets From Traders: Commodities
- Copper Falls, Heads for Weekly Drop on Europe Borrowing Costs
- Oil Heads for Second Weekly Loss on Europe; Mirae Sees Iran Risk
- Gold Declines as Investors Turn to Dollar for Haven From Europe
- Wheat, Soybeans Slide Amid Concern Crisis Will Weigh on Demand
- Sugar Slides to Five-Month Low on Indian Exports; Cocoa Falls
- Aluminum Traders Probably Added to Wagers on Declining Prices
- Fonterra Aims to Double China Sales by 2020, CEO Spierings Says
- First Beef Bonds in Two Years Set For Market: Argentina Credit
- Copper Shortfall Likely to Remain in 2012, OZ Minerals Says
- No Coal Rebound Seen in Asia on Power Price Curb: Energy Markets
- Global Rubber Demand to Grow 4% Through 2020 on Emerging Markets
- Vale’s Puts at Record as China’s Iron Ore Demand Slows: Options
- India May Permit More Sugar Exports After Assessing Crushing
CURRENCIES
KING DOLLAR – big long-term TAIL breakout in the US Dollar continues to hold its gains this morning as the Euro moves to immediate-term TRADE oversold at 1.32. If the Germans aren’t going to cooperate with the Bailout Beggars, Draghi is going to move towards more aggressive ECB rate cuts = bearish for the Euro, bullish for the USD (intermediate-term TREND)
EUROPEAN MARKETS
ITALY – complete mess as the Italians sell €10B of 6mth fiat at 6.50% vs 3.53% last; that’s just a monster jump in funding costs and both the Italian bond and stock markets continue to have this right. Markets don’t lie; politicians do. MIB Index moves to immediate-term TRADE oversold at 13,711.
HUNGARY – small country but they all matter in this game of dominos; Hungary is begging for an IMF bailout and Moodys decided to cut their credit rating to junk this morning = -4.6% drop in Hungarian stocks and the story just moved to #1 on Bloomberg most read.
ASIAN MARKETS
MIDDLE EAST
The Hedgeye Macro Team
Howard Penney
Managing Director
