THE HEDGEYE DAILY OUTLOOK
TODAY’S S&P 500 SET-UP - November 29, 2011
We are once again seeing the “fun and games with month-end markups” on no volume. Buyers beware of the US economic data Wednesday-Friday - expectations are too high. If you want to get bulled up on something into the start of the new month, go with US Dollar (UUP) or Long-Bond (TLT) on red today.
As we look at today’s set up for the S&P 500, the range is 32 points or -1.81% downside to 1171 and 0.88% upside to 1203.
SECTOR AND GLOBAL PERFORMANCE
EQUITY SENTIMENT:
- ADVANCE/DECLINE LINE: +2044 (+2429)
- VOLUME: NYSE 958.60 (+116.99%)
- VIX: +33.13 -6.79% YTD PERFORMANCE: +81.01%
- SPX PUT/CALL RATIO: 2.71 from 1.88 (+44.21%)
CREDIT/ECONOMIC MARKET LOOK:
- TED SPREAD: 50.66
- 3-MONTH T-BILL YIELD: 0.03%
- 10-Year: 1.97 from 1.97
- YIELD CURVE: 1.71 from 1.69
MACRO DATA POINTS (Bloomberg Estimates):
- 7:45am/8:55am: ICSC/Redbook comp sales
- 9am: S&P Case-Shiller, est. -.10% M/M, -3% Y/y
- 10am: Consumer Confidence, est. 44.0 (prior 39.8)
- 10am: Home price index (prior -0.6%)
- 11:30am: Fed’s Yellen speaks on global recovery in SF
- 11:30am: U.S. to sell $35b 4-wk bills
- 12:15pm: Fed’s Raskin moderates panels in SF
- 12:27pm: Fed’s Lockhart to speak on U.S. economy in Atlanta
- 12:30pm: IMF publishes paper on capital flows
- 4:30pm: Fed’s Williams speaks to reporters in SF
- 4:30pm: API inventories
- 7:30pm: ECB’s Stark speaks in Dallas
- 8pm: Fed’s Kocherlakota speaks to reporters in Calif.
WHAT TO WATCH:
- Facebook said to consider raising ~$10b in IPO that would value it at more than $100b
- Italy sold 6% 2014 bonds to yield 7.89%, up from 4.93% at Oct. 28 auction for 4.25% 2014 bonds; Italian-German 10-year yield spread shrinks 6 bps to 493 bps after auction
- S&P may revise bank credit ratings within next week
- Silver Lake said to be working with Microsoft to bid for minority stake in Yahoo!; Andreessen Horowitz also weighing possible bid
- President Obama in Washington, meets with Dutch PM Mark Rutte
- Secretary of State Clinton traveling to South Korea, Myanmar
- House, Senate in session
- Supreme Court in session, hearing arguments at 11am in case involving securities suits
COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)
- Speculators Cut Holdings to Lowest Since July 2009: Commodities
- Stocks, Commodities Advance on Europe Outlook, U.S. Retail Sales
- Oil Drops From One-Week High on Forecast U.S. Stockpiles Rose
- Stopping Turkey Tails at the Border Pits Trade Against Health
- Japan Extends Rice-Shipment Ban After Sales of Tainted Grain
- Gold May Climb for Second Day With Equities Before European Meet
- Chemicals Seen Boosting Odfjell as Demand Swamps Fleet: Freight
- Copper Drops as Moody’s Considers Downgrading European Bank Debt
- Oil Rises a Third Day as Euro, Stocks Signal European Confidence
- Copper Mining ‘Issues’ Support Shortage Outlook, Citigroup Says
- Thai Sugar Production to Reach Record as Floods Spare Crops
- Copper Falls as Moody’s May Downgrade Europe Banks: LME Preview
- Rio Wins Battle for Hathor as Cameco Says It Won’t Raise Bid
- Oil Pares Decline Before European Debt-Crisis Talks; Brent Gains
- Palm Oil Has Longest Losing Streak in Two Years on Europe Crisis
- Icahn Bids for Commercial Metals in Deal Worth $1.73 Billion
- Freeport Cerro Verde Workers Vote to End Two-Month Strike
- Copper May Gain in London on Speculation About Supply Shortfall
CURRENCIES
EURO – another day, another hope that a USD selloff and a Euro rally is real. Unfortunately, the math is getting in the way of that; EUR/USD has an important short-term line of resistance that it’s been fighting for 48 hrs at 1.34; ultimately, the bigger lines that matter are TRADE and TAIL resistance of 1.36 and 1.40, respectively.
EUROPEAN MARKETS
ITALY - On its shortest duration (the 2014 bonds) Italy Sells another €3.5B at 7.89%; a few months ago 6% was the "critical" line, then 7%, now I guess its 8%? C’mon. Let’s get as serious as Spread Risk is telling you to be here – Italian stocks are barely up this morning – and more importantly, down -37% since FEB (crashing) – no support for the MIB Index to 13,422
- Eurozone Economic sentiment 93.7 vs consensus 94.00 and prior revised to 94.8 from 94.8
- Eurozone Business Climate (0.44) vs consensus (0.30) and prior revised to (0.19) from (0.18)
- Eurozone Industrial Sentiment (7.3) vs consensus (7.6) and prior revised to (6.5) from (6.6)
- Eurozone Consumer Sentiment (20.4) vs consensus (20.4) and prior revised to (19.9) from (19.9)
ASIAN MARKETS
INDIA – stocks decided a 1-day rally to a lower-high was enough. Inflation isn’t going away on EUR/USD up days because Oil prices aren’t going down (Brent $110/barrel last), and Indian stocks don’t like sticky stagflation – down -1% overnight, taking the Sensex to 16,002 (down -22% for 2011 YTD).
MIDDLE EAST
- Broad, Gagosian, Qatar Sheikha, Ai Weiwei Make Art Power List
- Bangladesh Bank Rules Lure Standard Chartered: Islamic Finance
- U.A.E. Starts Investing in U.S. Treasuries With Better Rates
- Heroin Hidden in Raisins From Iran Seized in Sydney, Police Say
- Syria Says Sanctions Are ‘Economic War’ as UN Reports Abuses
- Iran Blast Reports in Nuclear Province Fuels Sabotage Suspicion
- First Gulf Bank of Abu Dhabi Raises Foreign Ownership to 25%
- Qatar Shares Climbs to One-Week High Before Europe Debt Meeting
- GCC Banks Aim to Focus on SMEs, Youth and Women, Accenture Says
- Hindustan Times: Iran threatens to bomb Turkey if US or Israel attack
- Narrow-Body Engines Roar at Dubai Airshow, Led by CFM
- Saudi Cable Won Orders Valued at 1.1 Billion Riyals This Month
- Qatar Said to Sell Dollar Bonds Maturing in January 2017, 2022
- Abu Dhabi Maintains Cuts in January Supply of Murban Crude
- Kuwait Government Resigns Amid Growing Opposition Protests
- Balfour Beatty Unit Wins GBP104m 5-Yr Qatar Consultancy Contract
- OPEC Likely to Cut Output in December
- First Gulf Gains Most in 2 Weeks on Foreign Ownership Limit
The Hedgeye Macro Team
Howard Penney
Managing Director
