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TODAY’S S&P 500 SET-UP – December 19, 2011

In a consensus world that was begging for the next Big Government Intervention (and didn’t get it), dead cats can still bounce.  The only problem between now and whenever the Correlation Crash ends is real-time prices.  As we look at today’s set up for the S&P 500, the range is 19 points or -1.04% downside to 1207 and 0.52% upside to 1226. 




THE HEDGEYE DAILY OUTLOOK - daily sector view

THE HEDGEYE DAILY OUTLOOK - global performance



  • ADVANCE/DECLINE LINE:  721 (-26volu) 
  • VOLUME: NYSE 1788.63 (+105.63%)
  • VIX:  24.29 -3.27% YTD PERFORMANCE: +36.85%
  • SPX PUT/CALL RATIO: 1.36 from 1.80 (-24.72%)



  • TED SPREAD: 56.82
  • 3-MONTH T-BILL YIELD: 0.00%
  • 10-Year: 1.86 from 1.92   
  • YIELD CURVE: 1.62 from 1.66


GLOBAL MACRO DATA POINTS (Bloomberg Estimates): 

  • 10am: NAHB Housing Market, Dec., est. 20 (prior 20)
  • 11am: Export inspections: Dec. 15, corn, soybeans, what
  • 11:30am: U.S. to sell $29b 3-mo., $27b 6-mo. bills
  • 12:30pm: Fed’s Lacker to speak in Charlotte
  • 1pm: U.S. to sell $35b 2-yr notes


  • Bank of Ireland sells Burdale to Wells Fargo Bank (WFC) for c €690M in cash
  • Chipotle Mexican Grill co-CEO would like politicians to fix US's immigration system – WSJ
  • Rep John Boehner says no to two-month payroll-tax-cut extension – WSJ
  • JC Penney employees uncomfortable as they await details of CEO Ron Johnson's plan for company - NY Post
  • South Korean shares fall sharply after news of Kim Jong-Il's death
  • Prince Alwaleed bin Talal, his investment co. agreed to buy $300m stake in Twitter
  • France’s credit outlook lowered by Fitch late Friday; S&P has also threatened to cut rating
  • Euro-area finance ministers to hold call to discuss $261b in additional funding through IMF, mechanics of so-called fiscal compact negotiated at Dec. 9 EU summit
  • U.S. online holiday sales up 15%: ComScore



COMMODITIES – amidst all of the final countdown to year-end markup fun (or are they markdowns?), Dr Copper is down another -0.7% this morning – that’s pretty sad considering Copper dropped -6.2% last wk; Brent Oil is now in a Bearish Formation w/ immediate-term downside to $101.98/barrel; Gold’s refreshed range = $1

  • Investors in ‘Fetal Position’ as Goldman Sees Rally: Commodities
  • Sino-Forest Defaults on Two Bond Issues, Seeks Waivers
  • Eldorado Agrees to Acquire European Goldfields for C$2.5 Billion
  • Oil Falls a Fourth Day on Europe Debt Concern, Kim Jong Il Death
  • India Inflation Hurting as Bad Roads Compound Power Deficit
  • Gandhi Bill Strains India Finances to Give Food to Nation’s Poor
  • Philippine Floods, Landslides Kill 652 in 2011’s Worst Storm
  • Copper Drops for First Day in Three on Fitch, China Home Prices
  • Iron Ore May Remain Below $140 as Chinese Mills Limit Purchases
  • Oil Rebounds From Near Six-Week Low as European Equities Advance
  • Soybeans Rise to Three-Week High on South America Crop Concerns
  • Tin Export Ban From Indonesia ‘Broken,’ Industry Group Says
  • China to Buy Corn, Soybeans for Stockpiling, Grain Center Says
  • Palm Oil Climbs for Second Day as Dry Weather May Cut Soy Crop
  • Copper Drops for First Day in Three on Chinese Demand Concerns

THE HEDGEYE DAILY OUTLOOK - daily commodity view


THE HEDGEYE DAILY OUTLOOK - daily currency view


EUROPE – contextualizing a dead cat’s bounce matters; don’t forget last week alone the CAC, MIB, and FTSE were all

down between -5.9-6.3%, so a +30-90bps bounce is what it is – another round of lower highs. Fitch downgrading France actually still matters to insolvent French banks who are going to have the negative P&L impact of ratings uplifts going away (higher funding costs).

 THE HEDGEYE DAILY OUTLOOK - euro performance



THE HEDGEYE DAILY OUTLOOK - asia performance




  • Prince Alwaleed, Kingdom Buy $300 Million Stake in Twitter
  • Gulf Keystone Jumps on Report Exxon Considering Making Offer
  • Etihad Raises Air Berlin Stake to 29.2% to Boost Cooperation
  • RAK Outpaces Global Sukuk on Abu Dhabi Backing: Islamic Finance
  • HSBC Says Bigger Is Better for Persian Gulf Bonds: Arab Credit
  • Hungary’s Mol Jumps Most in Month on Exxon Iraqi Deal Report
  • Exxon Weighs Deal With GKP for Kurdish Oil, Independent Says
  • Emaar Raises 3.6 Billion-Dirham Financing Backed By Dubai Mall
  • Gulf Has $25 Billion of Bonds Falling Due in 2012, Al Bayan Says
  • Libyan, Iraqi Output Lead OPEC to Raise Target: Persian Gulf Oil
  • Iran and Russia’s Tatneft Sign $1 Billion Oilfield Accord
  • Saudis Domestic Crude Oil Use Nears 10-Year High in October
  • Alwaleed Tops Arabian Business Rich List With $21.3 Billion
  • CIA Spy 'Confesses' on Iranian TV
  • OPEC Ceiling Adds ‘Strong Upside Risks’ to Oil, Goldman Says
  • Saudi Arabia’s Oil Output Fell in October as Demand Fluctuated
  • Taqa Says Statoil, Vattenfall Energy Are Bergermeer Customers
  • Abu Dhabi Shares Drop to Lowest Since 2009 on Europe Debt, Asia


The Hedgeye Macro Team

Howard Penney

Managing Director