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TODAY’S S&P 500 SET-UP – January 3, 2012

SQUEEZE – in both Asian and European Equity squeezage (yesterday + today) there actually was some economic data supporting it; China (which I bought on last day of 2011) printed a 50.3 on its PMI for DEC and Germany’s unemployment rate dropped in DEC to 6.8% vs 6.9% last month, with both economies proving you don’t need Keynesian fear-mongering to generate a solid employment base - KM

As we look at today’s set up for the S&P 500, the range is 21 points or -0.68% downside to 1249 and 0.99% upside to 1270.  

 

SECTOR AND GLOBAL PERFORMANCE

THE HEDGEYE DAILY OUTLOOK - levels

THE HEDGEYE DAILY OUTLOOK - daily sector veiw

THE HEDGEYE DAILY OUTLOOK - global performance

 

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE:  -154 (-1893) 
  • VOLUME: NYSE 588.05 (10%)
  • VIX:  22.40 +3.31% YTD PERFORMANCE: N/M
  • SPX PUT/CALL RATIO: 1.49 from 2.80 (-46.77%)

 

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 57.80
  • 3-MONTH T-BILL YIELD: 0.02%
  • 10-Year: 2.03 from 1.97   
  • YIELD CURVE: 1.89 from 1.91

 

GLOBAL MACRO DATA POINTS (Bloomberg Estimates):

  • 10:00am, Construction Spending, Nov., est. 0.5% (prior 0.8%)
  • 10:00am, ISM Manufacturing, Dec., est. 53.2 (prior 52.7)
  • 11:30am: U.S. selling $29b 3-month bills, $27b 6-month bills
  • 2:00pm, FOMC Minutes
  • UK Dec Manufacturing PMI 49.6 vs consensus 47.4 and prior revised to 47.7 from 47.6
  • Germany Dec Unemployment Rate sa +6.8% vs consensus +6.9% prior +6.9%
  • Germany Dec Unemployment Change sa (22K) vs consensus (10k) prior (20k)
  • China December PMI 50.3 vs 49.0 seq. 

WHAT TO WATCH:

  • Mitt Romney vying with Rick Santorum, Ron Paul for top spot in Iowa caucuses; other rivals may see campaigns end
  • French President Nicolas Sarkozy to meet with German Chancellor Angela Merkel in Berlin Jan. 9
  • EU says no decision has been made yet on financial assistance to Hungary -- wires

 

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

COMMODITIES – as important to watch as European equities as they test their TAIL lines of resistance in early 2012 will be Copper and Oil testing their TAIL lines of resistance of $111.61 (brent) and $3.99/lb, respectively. 


  • Global Growth Slows to 3.9% as O’Neill Sees Aging Labor in BRICs
  • BP Seeks Recovery of All Gulf Spill Costs From Halliburton
  • Hedge Funds Raise Bullish Bets by Most in 16 Months: Commodities
  • Biggest Hedge Fund in Ships Sees Frozen Gas Beating Oil: Freight
  • Crude Advances Amid Manufacturing Expansion, Tension Over Iran
  • Gas Bears Trim Short Bets as Prices Dip Below $3: Energy Markets
  • Gold Advances as Iranian Nuclear Concern Increases Haven Demand
  • Chile’s Codelco Exercises Buy Option on Anglo Copper Unit
  • Copper Paces Advance in Metals as China’s Output Boosts Outlook
  • Iron Ore Prices May Average 11% Lower in 2012, IG Markets Says
  • Australian Manufacturing Shows First Expansion in Six Months
  • Caterpillar, Rio Lock Out Canada Workers as Contract Talks Fail
  • Mewah Invests in Indonesia Refinery to Diversify, CFO Says
  • Polyus Leads Gain as Oil Rises for Third Year: Russia Overnight
  • Sugar Mills in India Seek Time to Export as Surplus Cools Demand
  • Copper Rises as Manufacturing Gauges May Signal Stronger Demand
  • Lee Says ‘New Era’ Possible After N. Korea Calls Him Traitor
  • S. Korean Agency to Boost Metals Buying 47% to $461 Million
  • CDS Dealers to Judge If Sino-Forest in ‘Credit Event,’ ISDA Says

THE HEDGEYE DAILY OUTLOOK - daily commodity view

CURRENCIES

EUR/USD – get the US Dollar’s daily direction right and you’ll get most things beta right; that’s not a perpetual correlation, but it certainly still matters this morning. Euro’s new TRADE range = 1.28-1.31, so we’re dead cat bouncing this thing right back up to the top end of the range and Gold (which has a stunning -0.91% inverse cor to USD right now) pops for a +1.5% gain (covered our GLD short at $1538/oz)

THE HEDGEYE DAILY OUTLOOK - daily currency view

EUROPEAN MARKETS

 

THE HEDGEYE DAILY OUTLOOK - euro performance

 

ASIAN MARKETS

THE HEDGEYE DAILY OUTLOOK - asia performance

 

 

MIDDLE EAST (HEADLINES FROM BLOOMBERG)

  • Global Growth Slows to 3.9% as O’Neill Sees Aging Labor in BRICs
  • Biggest Hedge Fund in Ships Sees Frozen Gas Beating Oil: Freight
  • Crude Advances Amid Manufacturing Expansion, Tension Over Iran
  • Aldar Soars on $4.6 Billion Abu Dhabi Bailout: Islamic Finance
  • Iran Warns U.S. Against Sending Aircraft Carrier Back to Gulf
  • Gold Advances as Iranian Nuclear Concern Increases Haven Demand
  • Egypt Holds Final Round of Vote as Mubarak Faces Prosecutors
  • Dana Gas Bond Yield Jumps Most in Two Weeks Ahead of Meeting
  • Blackwater Is Back as U.S. Spending to Hit $8 Billion in Iraq
  • Gold Climbs to One-Week High as Iran Makes Nuclear Rod
  • Crude Advances Amid Manufacturing Expansion, Tension Over Iran
  • Banque Saudi Fransi Seeks to Raise Capital 25% Via Bonus Shares
  • U.A.E. Interbank Rate Reaches 5-Month High as Loans Top Deposits
  • Dubai Plan to Halve 2012 Deficit Urges Bond Upturn: Arab Credit
  • Dana Board to Discuss Egypt, U.A.E. Project Financing on Jan. 4
  • Iran Military Warns US Aircraft Carrier to Stay Away From Persian Gulf
  • Iran military warns US aircraft carrier away from Gulf
  • Greece Looking For Alternatives to Iranian Oil, Kathimerini Says

THE HEDGEYE DAILY OUTLOOK - MIDEAST PERFORMANCE

The Hedgeye Macro Team

Howard Penney

Managing Director