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THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – December 23, 2011

On very lower volume Santa found his way back to getting the SP500 up to +0.6% for December;  US Stocks flat for November/December.  As we look at today’s set up for the S&P 500, the range is 31 points or -2.07% downside to 1228 and 0.40% upside to 1259. 

 

SECTOR AND GLOBAL PERFORMANCE

THE HEDGEYE DAILY OUTLOOK - hrmsl

THE HEDGEYE DAILY OUTLOOK - hrmsp

THE HEDGEYE DAILY OUTLOOK - bpgm1

 

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE:  1540 (+845) 
  • VOLUME: NYSE 774.60 (-6.03%)
  • VIX:  21.16 -1.26% YTD PERFORMANCE: +19.21%
  • SPX PUT/CALL RATIO: 3.06 from2.53 (+21.06%)

 

CREDIT/ECONOMIC MARKET LOOK:

 

  • TED SPREAD: 56.87
  • 3-MONTH T-BILL YIELD: 0.01%
  • 10-Year: 1.97 from 1.98   
  • YIELD CURVE: 1.69 from 1.70

 

GLOBAL MACRO DATA POINTS (Bloomberg Estimates):

  • 8:30am, Durable Goods, Nov., est. 2.2% (prior -0.5% (revised))
  • 8:30am, Personal Income, Nov., est. 0.2% (prior 0.4%)
  • 8:30am, Personal Spending, Nov., est. 0.3% (prior 0.1%)
  • 10:00am, New Home Sales, Nov., est. 315k, up 2.4%, from 307k
  • France Q3 GDP +0.3% q/q vs prior +0.4%
  • France Nov producer prices +0.4% m/m vs consensus +0.1%, prior +0.5%
  • UK Nov mortgage approvals for home purchase 34,738 up +16% y/y and vs 35,196 in Oct

WHAT TO WATCH:

  • House Speaker John Boehner agreed to 2-month extension of payroll tax cut
  • NY Post names assets rumored to be in deal for Yahoo!'s Asian holdings
  • Regulators to extend deadline for comments on Volcker rule - Bloomberg
  • Unified financial market regulation in Canada may be years away - Globe and Mail
  • Motor Thailand expects normal operations to resume in mid-January - The Nation

 

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

COMMODITIES – both the CRB Index and all of its key components w/ highly inverse correlations to the USD have rallied right back up to where they should be shorted. Short Gold, Oil, Coal – take your pick. I think the Correlation Crash in commodities comes back in a hurry next week.

  • Yanzhou Coal Agrees to Buy Gloucester in A$2.1 Billion Deal
  • Fair Trade Proving Anything But to Farmers in $6 Billion Market
  • Copper Traders Most Bullish Since October on Demand: Commodities
  • Sundance Seen Doubling Money on Takeover Betting Today: Real M&A
  • China, India Rate Cuts Seen Faster Than Korea: Chart of the Day
  • India Group Seeks $7.8 Billion State Funding for Afghan Mine
  • Putin’s Oil Wins Record Premium at Europe’s Cost: Energy Markets
  • Oil Heads for Biggest Weekly Gain in Two Months on U.S. Economy
  • Mongolia Spending Glut Risks Bust on Commodity Outlook, IMF Says
  • Stocks in U.S., Europe Gain as 10-Year Treasuries, Oil Advance
  • Gold Advances as Signs of U.S. Recovery Reduce Dollar Demand
  • Barclays Metal Losses May Be Accounted For, Mediobanca Says
  • China May Buy Corn If Price Falls to $5 a Bushel, Yigu Says
  • Oil May Rise on Middle East Geopolitical Tension, Survey Shows
  • Copper Rallies for Fourth Day on Stockpiles, U.S. Jobless Data
  • Soybeans, Corn Drop as Rains May Ease South America’s Dry Spell
  • Palm Oil Set for Biggest Weekly Advance in One Year on Weather
  • Gold Drops as Jobless Claims Slow, Investors Reduce ETF Holdings
  • Yanzhou to Buy Gloucester Coal for A$700 Million, Stake in Unit
  • Gold Rebounds in London as Dollar’s Decline May Support Demand

THE HEDGEYE DAILY OUTLOOK - dcommv

CURRENCIES

EURO – flat on the week at 1.30 is just not good considering half a TRILLION of leverage lathered onto insolvent banks. King Dollar’s reign is fortified as the US Dollar Index holds all 3 consequential levels of support (TRADE, TREND, TAIL lines in our model), w/ the most immediate-term line of support = $79.54.

THE HEDGEYE DAILY OUTLOOK - dcurrv

EUROPEAN MARKETS

THE HEDGEYE DAILY OUTLOOK - bpem1

 

ASIAN MARKETS

INDIA – coal in the stocking for most Asian Equity investors this week but a better than bad session overnight (it was the 1st day of the wk that China didn’t go down) with India’s Sensex flashing the negative regional divergence, closing down another -0.52% to -23.2% YTD. Fitch cuts their Asian GDP forecast – thanks for coming out, only about 6 months late. That said, Asian Growth Slowing remains reality.

THE HEDGEYE DAILY OUTLOOK - bpam1

 

 

MIDDLE EAST (HEADLINES FROM BLOOMBERG)

  • Israel Didn’t Know High-Tech Gear Was Sent to Iran Via Denmark
  • Putin’s Oil Wins Record Premium at Europe’s Cost: Energy Markets
  • Malaysia Sukuk Rally on Jump in Banking Assets: Islamic Finance
  • Baghdad Bombings Kill at Least 57 Amid Shiite-Sunni Tensions
  • Ex-Marine’s Afghan Tour Included Rescuing Dogs Forced to Fight
  • Quiet Iraq Exit Won’t Have a Replay in Afghanistan: Noah Feldman
  • Iraq Oil Output Has Reached a 20-Year High, Shahristani Says
  • Oil to Set Record in 2012 as U.S. Dodges Slump: Energy Markets
  • Iran-Ban Threat Pushes Tanker Hiring to Record: Chart of the Day
  • Coromandel International Gains in Mumbai After Qatar Deal
  • Haaretz: Report: Israeli company sold surveillance equipment to Iran
  • EU Banks’ Retreat Creates Gap for Gulf Borrowers: Arab Credit
  • Dana Gas Slumps to Lowest on Record on Egypt Delay Report
  • Exxon Spars With Iraq Over Lack of Payment

THE HEDGEYE DAILY OUTLOOK - me

The Hedgeye Macro Team

Howard Penney

Managing Director