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THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP - December 2, 2011

US Futures spike as short sellers are now in Pain Trade mode while the “long-onlys” chase beta. Always a powerful combo in the immediate-term – also the biggest downside risk after the immediate-term squeeze makes a lower-high.   As we look at today’s set up for the S&P 500, the range is 25 points or -0.93% downside to 1233 and 1.08% upside to 1258. 

SECTOR AND GLOBAL PERFORMANCE

THE HEDGEYE DAILY OUTLOOK - hrmsl

 

THE HEDGEYE DAILY OUTLOOK - hrmsp

 

THE HEDGEYE DAILY OUTLOOK - bpgm1

 

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE:  -610 (-2916) 
  • VOLUME: NYSE 855.83 (-48.67%)
  • VIX:  27.41 -1.40% YTD PERFORMANCE: +54.42%
  • SPX PUT/CALL RATIO: 1.54 from 2.33 (-33.69%)

 

CREDIT/ECONOMIC MARKET LOOK:

TREASURIES: the most important quote today into/out of jobs rpt = 10yr yields; big TRADE line resistance at 2.12%

  • TED SPREAD: 53.74
  • 3-MONTH T-BILL YIELD: 0.01%
  • 10-Year: 2.11 from 2.08   
  • YIELD CURVE: 1.84 from 1.83

 

MACRO DATA POINTS (Bloomberg Estimates):

  • 8:30am: Change in nonfarm payrolls: est. 125k (prior 80k)
  • 8:30am: Unemployment rate: est. 9.0% (prior 9.0%)
  • 9am: Fed’s Fisher speaks in Dallas
  • 10am: Fed’s Plosser speaks in Philadelphia
  • 12:30pm: ECB’s Stark gives speech in NY
  • 1pm: Baker Hughes rig count
  • 1:30pm: Fed’s Rosengren speaks on economy in Boston

 

WHAT TO WATCH: 

  • Germany’s Merkel rejected joint euro-area bonds, central bank action while pushing for closer economic ties and tougher budget enforcement
  • U.K. judge ordered Apple to disclose to HTC Corp. which features of its competing mobile phones may infringe Apple’s European patents by today
  • Dallas Fed President Richard Fisher, St. Louis Fed President James Bullard say central bank doesn’t need to lower discount rate: WSJ
  • Market no longer thinks major US banks are too big to fail - WSJ

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

COPPER – The Doctor looks exactly like European Stoxx because they have the same correlation to the USD. Copper climbs back above its immediate-term TRADE line of resistance this week of 3.47/lb and remains under TREND line resistance of 3.72/lb. Pick your European stock market and the TRADE/TREND setup is the same. Trade the new ranges.

  • Oil Margins Falling as U.S. Fuel Import Era Ends: Energy Markets
  • Copper Traders Bullish for First Time in Six Weeks: Commodities
  • Commodities to Rally on ‘Cheap Money,’ Renaissance Predicts
  • Crude Oil Rises Amid Middle East Tension, Heads for Weekly Gain
  • U.S. Stocks Retreat After Rally as Spanish, French Bonds Advance
  • Palladium Set for 12% Weekly Gain, Most in Year; Beats Gold
  • Monsanto Corn May Be Failing to Kill Bugs in 4 States, EPA Says
  • Bank of Korea Boosts Gold Reserves for Second Time This Year
  • Gold Gains in London, Heads for Weekly Jump After Bank Purchase
  • Citigroup’s Base-Metal Research Head Thurtell Said to Leave
  • Copper Extends Weekly Gain After U.S. Manufacturing Data
  • Copper Stockpiles Drop to Lowest in 28 Months in Shanghai
  • Palm Oil to Surge as Production Growth Decelerates, Mistry Says
  • GFMS More Bullish on Palladium in 2012 on ‘Structural Deficit’
  • Rio Tinto to Invest $2.7 Billion in Aluminum Smelter Upgrade
  • Wheat Trims Biggest Weekly Gain Since August on Rising Supply
  • Oil Falls First Time in Five Days as U.S. Jobless Claims Rise
  • ICAP Names MF’s Pettit Global Head of Financial Futures, Options
  • Cocoa Futures Fall as Goldman Cuts Forecast; Sugar, Coffee Drop

THE HEDGEYE DAILY OUTLOOK - dcommv

CURRENCIES

 THE HEDGEYE DAILY OUTLOOK - dcurrv

EUROPEAN MARKETS

EUROPE: Every market has taken out our immediate-term TRADE line of resist - TAILS remain bearish, but this insulates some downside, for now


THE HEDGEYE DAILY OUTLOOK - bpem1

 

ASIAN MARKETS

CHINA – Unfortunately, the Chinese economy doesn’t like the commodity inflation – this only compounds the already accelerating deceleration in sequential (Q4 vs Q3) Asian and European growth. China closed down another -1.1% overnight, right back to where it was pre the rate cut.

THE HEDGEYE DAILY OUTLOOK - bpam1

MIDDLE EAST

  • Oil Margins Falling as U.S. Fuel Import Era Ends: Energy Markets
  • ‘Dubai’ Lands in Karachi as Pakistanis Flock to 60-Store Complex
  • EU Widens Iran Sanctions, Remains Split on Halt to Oil Purchases
  • Islamists Electoral Rise Due to Failed Secularism: Pankaj Mishra
  • EU Wimps Out on Oil Sanctions to Halt Iran’s Nuclear Drive: View
  • Sukuk Borrowing Costs Rise Most Since May 2010: Islamic Finance
  • U.S. Senate Approves Sanctions Aimed at Crippling Iran Oil Sales
  • Saudi Arabia Poised for Record Heavy-Crude Premiums on Fuel Oil
  • Lukoil May Buy Remaining 40% of Italy’s ISAB Refinery From ERG
  • U.S. Senate Backs Sanctions Intended to Cripple Iran Oil Exports
  • Emaar Said to Raise $800 Million Loan at a Discount to Its Sukuk
  • MSCI to Say Whether U.A.E., Qatar Upgraded on Dec. 14
  • OPEC to Boost Crude Exports on Asian Demand, Oil Movements Says
  • Citigroup Deal Haunts Pandit as Saudis Claim $383 Million
  • South Europe Wants Saudi Oil to Cover Iran Ban, Petromatrix Says
  • Biden Seeks Turkey’s Help to Keep Up Pressure on Syria and Iran

THE HEDGEYE DAILY OUTLOOK - me

The Hedgeye Macro Team

Howard Penney

Managing Director