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
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
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.
EUROPEAN MARKETS
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.
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 Macro Team
Howard Penney
Managing Director
