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TODAY’S S&P 500 SET-UP - December 7, 2011

As we look at today’s set up for the S&P 500, the range is 33 points or -2.02% downside to 1233 and 0.60% upside to 1266. 

SECTOR AND GLOBAL PERFORMANCE

THE HEDGEYE DAILY OUTLOOK - levels 127

 

THE HEDGEYE DAILY OUTLOOK - daily sector view

 

THE HEDGEYE DAILY OUTLOOK - global performance

 

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE:  +17 (+1681) 
  • VOLUME: NYSE 801.88 (-10%)
  • VIX:  28.13 +1.04% YTD PERFORMANCE: +58.48%
  • SPX PUT/CALL RATIO: 1.60 from 1.46 (+9.59%)

 

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 53.78
  • 3-MONTH T-BILL YIELD: 0.00%
  • 10-Year: 2.10 from 2.09   
  • YIELD CURVE: 1.84 from 1.84

 

MACRO DATA POINTS (Bloomberg Estimates):

  • 7am: MBA Mortgage Applications (prior 11.7%)
  • 8:30am: Fed’s Raskin speaks on data use in Baltimore
  • 10:30am: DoE inventories
  • 3pm: Consumer Credit, est. $7.0b (prior $7.4b)

 

WHAT TO WATCH:

  • Treasury Secretary Geithner to hold talks with French President Nicolas Sarkozy in Paris today
  • Citigroup to cut ~4,500 jobs in coming qtr, to take 4Q pretax charge of ~$400m tied to reductions
  • JC Penney said to pay $38.5m for 16.6% stake in Martha Stewart Living Omnimedia in deal to be announced today: NYT
  • Talbots said it would “evaluate” Sycamore Partners’s offer to buy co. for $212m
  • U.S. Consumer Financial Protection Bureau planning to release simplified credit-card agreement for possible use by issuers
  • Lehman Brothers said to be trying to raise ~$2.6b to buy controlling stake in Archstone as part of plan to sell or liquidate asset for $6b or more
  • Expedia plans to spin off TripAdvisor unit as publicly held business around Dec. 20
  • BP, Shell aim to resume drilling exploration, boost production in Libya
  • Missouri Public Service Commission said they need more time to make recommendation on Energy Transfer’s $5.2b purchase of Southern Union
  • ING Groep to take charge of as much as $1.5b as lower interest rates and stock markets hurt U.S. annuities
  • Moelis said to be named as financial adviser for creditors committee in AMR Corp.’s bankruptcy
  • AMR creditor panel risks split as unions claim three seats
  • Cablevision sued Verizon on advertising campaign it claims misrepresents Cablevision’s Internet speeds
  • GM said to be near completing package of proposed fixes for Chevrolet Volt battery pack: Reuters
  • U.S. gets highest rating from int’l investors in more than 2 yrs on optimism economy will weather Europe’s financial crisis, avoid recession in 2012: Bloomberg poll
  • Most int’l investors predict at least one nation will eventually dump the euro: Bloomberg poll

 

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

OIL – Santa’s sleigh better run on Dunkin’ because $110/barrel is tight! Consensus is anchored on the sequential US GDP gains we saw that came in Q3 (as oil fell to its lows in SEP); Rising Oil slows US Consumption Growth and we see US GDP falling, sequentially, from 2% to 1.4% in Q4. Not a disaster, but slower – and it’s the slope of the line that matters more than the absolute.

  • Tyson to Gain as Hen Flock Falls to 15-Year Low: Commodities
  • Oil Rises a Fourth Day on Concern Iran Tension May Curb Supply
  • Copper Climbs as Officials May Step Up Crisis-Solving Efforts
  • Palladium Climbs to Two-Month High on Car Demand; Gold Is Steady
  • Corn Gains for Second Day as Europe Seen Moving to Stem Crisis
  • Robusta Coffee Climbs on Warehouse Deliveries; Cocoa Advances
  • Nickel Surplus to Soar as Supply Outpaces Demand, Eramet Says
  • Supervalu Joins Farmers Behind U.S. Food Stamps at $71.8 Billion
  • China’s Zhengzhou Exchange Halts Trading on Technical Issue
  • BP, Shell Plan to Resume Exploration, Boost Production in Libya
  • Lithium, Cobalt Among Minerals Facing Chronic Shortage, PwC Says
  • Shanghai Futures Exchange to Widen Successive Daily Limits
  • Oil-Tanker Survivor Sees Biggest Returns in Coal Ships: Freight
  • Oil Near Three-Week High on Supply Concern
  • Carbon Credits Turning ‘Junk’ as Ban Shuts Door: Energy Markets
  • Bets Against Commodity Stocks Rise Fastest in 23 Months: Options

THE HEDGEYE DAILY OUTLOOK - daily commodity view

CURRENCIES

EURO – Le Geithner et La Sarkozy have le central plan completely figured out, right? Someone better tell whatever that means to the currency market because it’s not getting the message. Euro isn’t yet even testing its 1st line of resistance (1.35-1.36) never mind holding it. The Correlation Risk to stocks, commodities, etc. cometh on a move back down to 1.32.

 

THE HEDGEYE DAILY OUTLOOK - daily currency view

EUROPEAN MARKETS

THE HEDGEYE DAILY OUTLOOK - euro performance

 

 

ASIAN MARKETS

CHINA – the Chinese don’t seem to be cooperating with the short-term suspension of economic gravity thing. Last night the PBOC called the global export slowdown “under severe pressure.” We know they make things up – but that’s probably not one of those things. Shanghai Comp bounced 30bps after selling off hard in the last week. Stay tuned for bad Chinese data Thursday.

 

THE HEDGEYE DAILY OUTLOOK - asia performance

 

 

MIDDLE EAST

THE HEDGEYE DAILY OUTLOOK - MIDEAST PERFORMANCE

The Hedgeye Macro Team

Howard Penney

Managing Director