TODAY’S S&P 500 SET-UP - December 1, 2011
There is plenty relevant MACRO data today: – UK PMI hits 47.6 (lowest since 09), South Korean inflation rises sequentially to +4.2% November vs +3.6% October, Brazil cuts rates for the 3rdtime in a row, etc… Bottom line is that all of this remains much more a policy to inflate than it does equate to bare knuckled economic growth – there’s a difference – inflation slows consumption growth at $110/barrel. As we look at today’s set up for the S&P 500, the range is 45 points or -3.53% downside to 1203 and 0.08% upside to 1248.
SECTOR AND GLOBAL PERFORMANCE
EQUITY SENTIMENT:
- ADVANCE/DECLINE LINE: 2306 (2416)
- VOLUME: NYSE 1667.75 (+81.53%)
- VIX: 27.80 -9.27% YTD PERFORMANCE: +56.62%
- SPX PUT/CALL RATIO: 2.33 from 2.07 (+12.78%)
CREDIT/ECONOMIC MARKET LOOK:
- TED SPREAD: 52.89
- 3-MONTH T-BILL YIELD: 0.01%
- 10-Year: 2.08 from 2.00
- YIELD CURVE: 1.83 from 1.73
MACRO DATA POINTS (Bloomberg Estimates):
- 8:30am: Jobless claims, est. 390k, prior 393k
- 9am: Fed’s Lockhart to give welcome at real-estate conference
- 9:05 am: Fed’s Bullard to speak at Bloomberg event in NY
- 9:45am: Bloomberg consumer comfort, est. -49.0, prior -50.1
- 10am: Construction spending, est. 0.3%, prior 0.2%
- 10am: ISM Manufacturing, est. 51.8, prior 50.8
- 10am: Freddie Mac mortgage
- 10:30am.: EIA natural gas
WHAT TO WATCH:
- Nov. retail comp. sales may gain 3.1% as heavy promotions, early store openings helped holiday results: Retail Metrics
- Thousands of workers in southern China went on strike in past week, disrupting work at companies including one that supplies equipment to IBM
- House scheduled to vote on eliminating public financing for election campaigns
- Senate may consider as early as today payroll tax provision for employers included in Democratic legislation
- Senate Agriculture Committee hears from CFTC Chairman Gary Gensler, SEC Chairwoman Mary Schapiro on oversight of Wall Street Reform Act, 10am
- House Financial Services Committee hears from Housing Secretary on health of FHA single-family insurance fund, 10am
- House Energy and Commerce Committee marks up broadband spectrum legislation, 10am
- House Financial Services subcommittee hears from CEOs of Fannie Mae, Freddie Mac, head of Federal Housing Finance Agency, at oversight hearing, 2pm
COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)
- Mugabe’s Seized Farms Boost Profits at British American Tobacco
- Goldman Says Commodities May Rally in 2012 as Brent Surges
- Dollar Proves Best Bet as Investors Shun Stocks for Safety
- China’s Manufacturing Contracts for First Time Since 2009
- Natural Gas Battered in U.K. by Milder Winter: Energy Markets
- RBA Straddles Record House Slump, Mining Boom: Chart of the Day
- Oil Rises to Near Two-Week High Amid Supply Risks, Euro Optimism
- Cotton Crop Reaching Record Makes Goldman Bearish: Commodities
- Gold May Climb on Central Bank Efforts to Tame European Crisis
- Copper Declines on Weakest Chinese Manufacturing Since 2009
- Stocks, Euro, Commodities Surge as Central Banks Boost Liquidity
- Tin May Rebound 11% as China Supports Demand: Chart of the Day
- Vale Matching Slim’s Rating Signals Debt Cost Cut: Brazil Credit
- Codelco Starts Legal Action to Annul Mitsubishi’s Anglo Deal
- Australian Court Freezes A$858 Million of Magnitogorsk’s Assets
- Indonesia Spending $200 Billion Boosts Krakatau: Freight
- Gold Average Signaling Third Monthly Rally: Technical Analysis
- Copper Falls in London After China’s Manufacturing: LME Preview
- Palm Oil Demand May Gain 3% in 2012, Indonesian Group Says
CURRENCIES
EUROPEAN MARKETS
ITALY – stocks look much different on the MIB index readings than they do on the DAX – so if you need to get paired off do it that way, but Italy failing at its first line of TRADE resistance (15,460) is a big problem. So is the Euro failing at 1.34 – both remain in Bearish Formations and the NOV PMI data across Europe supports the markets intermediate-term view as well
ASIAN MARKETS
CHINA – when China started cutting in SEP 2008, they were serious about a serious slowdown in Chinese demand – this morning’s HSBC PMI print for NOV of 47.7 was awful (worst since 09) and Chinese stocks rallied less than they fell prior to the cut.
MIDDLE EAST
- Iran Clings to Oil Lifeline as U.S. Pushes Tighter Sanctions
- Qatar’s $5 Billion Bond Sale Caps Issuance Surge: Arab Credit
- U.K. Expels Iranian Diplomats as Tehran Faces Isolation
- Yemen’s Saleh Still Acting Presidential in Risk to Gulf Plan
- Citigroup Deal Haunts Pandit as Saudis Claim $383 Million
- Indonesia Tax Breaks May Spur 40% Bank Growth: Islamic Finance
- VTB Capital Said to Hire 4 Bankers From Credit Suisse Dubai
- Iran Oil Sanctions Set to Shrink Circle of Foreign Buyers
- Qatar Shares Climb Most in Three Weeks After Central Banks Act
- Iran Would Hit U.S. Bases in Germany in Case of War, Bild Says
- Glencore, Spain’s Cepsa in Talks Over Oil Accord, Expansion Says
- Shuaa of Dubai Cuts 29 Jobs as It Restructures Amid Losses
- Saudis Seek Compensation From $100 Billion Climate Funding
- Almarai Seeks to Raise $400 Million From Sukuk Sale in 2012
- Dubai Islamic Lender Tamweel Hires Banks for Possible Bond
- Statement by UANI on French Shipping Company CMA CGM Ending Exports
- EU to Widen Sanctions on Iran, Including Possible Oil Embargo
The Hedgeye Macro Team
Howard Penney
Managing Director