THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – January 9, 2012


As we look at today’s set up for the S&P 500, the range is 21 points or -0.85% downside to 1267 and .80% upside to 1288. 

 

SECTOR AND GLOBAL PERFORMANCE

 

THE HEDGEYE DAILY OUTLOOK - chart1f

 

THE HEDGEYE DAILY OUTLOOK - chart 2

 

THE HEDGEYE DAILY OUTLOOK - chart 3f

 

 

EQUITY SENTIMENT:

 

  • ADVANCE/DECLINE LINE: -200 (656) 
  • VOLUME: NYSE 710.51 (-14.3%)
  • VIX:  20.63 -3.96% YTD PERFORMANCE: -11.81%
  • SPX PUT/CALL RATIO: 1.40 from 1.62 (-13.58%)

 

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 57.64
  • 3-MONTH T-BILL YIELD: 0.0%
  • 10-Year: 1.97 from 1.96
  • YIELD CURVE: 1.727 from 1.702

 

MACRO DATA POINTS (Bloomberg Estimates): 

  • 11:30am: U.S. to sell $29b 3-mo., $27b 6-mo. bills
  • 12:40pm: Fed’s Lockhart to speak on economy in Atlanta
  • 3:00pm: Consumer Credit, Nov., est. $7b (prior $7.6b)

 

WHAT TO WATCH

  • German Chancellor Angela Merkel, French President Nicolas Sarkozy meet today in Berlin to discuss euro rescue plan
  • Alcoa marks the traditional kick-off of earnings season with report after the market close
  • Bristol-Myers Squibb agreed to buy Inhibitex for $2.5b to boost its position in hepatitis C medicines; watch Achillion
  • Johnson & Johnson goes to trial today facing demand by Texas for damages of more than $1b on Risperdal marketing
  • Nokia’s Lumia 900 Windows phone may be introduced today; watch for other announcements tied to Consumer Electronics Show
  • Other conferences this week include J.P. Morgan Health Care, North American International Auto Show in Detroit
  • Hungary PM Viktor Orban drops objection to IMF bailout, says his govt is open to “any kind” of credit line
  • Netflix starts service in U.K., Ireland, taking on Amazon.com’s Lovefilm
  • No IPOs scheduled to price

 

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)


OIL – I thought oil would come down on a Tebow like move like this in the US Dollar Index. I thought wrong. Iran is the #1 story on Bloomberg’s most read this morning as Brent Oil remains > my long-term

TAIL line of $111.89 support (next resist = $115.21).

 

  • Speculators Increase Bullish Wagers Most Since ‘10: Commodities
  • Copper Declines on Concern Euro Crisis Is Affecting Economies
  • Goldman Sachs Remains “Overweight” Commodities; Favors Gold Commodities Market
  • Crude Oil Declines to Five-Day Low Before Merkel, Sarkozy Meet
  • Morgan Stanley Says Gold, Grains to Outperform Oil in 2012
  • Wheat Rises as Feed Demand May Build on Dry Argentine Weather
  • Sugar Rises on Index Weight Changes, MENA Demand; Cocoa Climbs
  • Gold May Extend Gains on European Crisis, Reliance Capital Says
  • Rice Exports From India May Surge as Ban Ends on Record Crop
  • Gold May Gain in London as Europe, Iran Concerns Spur Demand
  • Hedge Funds Resume Bullish Bets as Oil Tops $103: Energy Markets
  • Iran Able to Block Strait of Hormuz, General Dempsey Says on CBS
  • Ethanol Eats More Corn Than Cows as Herds Drop: Chart of the Day
  • COMMODITIES DAYBOOK: Hedge Funds Boost Bet on Commodity Gains
  • Gold Moving Average Signaling a Bear Market: Technical Analysis

 

THE HEDGEYE DAILY OUTLOOK - chart 4

 

 

CURRENCIES

 

THE HEDGEYE DAILY OUTLOOK - chart 5

 

 

EUROPEAN MARKETS

 

ITALY – starting to diverge from Germany in more ways than just bond yields; this makes sense if Italian banks are at the back of a long line w/ Deutsche Bank and Commerzbank in front of them. Unicredit’s risk is now clear in the rear view mirror, but what does that mean for the broader Italian MIB Index? Looks safe to be short MIB with a 15,160 stop vs DAX long.

 


THE HEDGEYE DAILY OUTLOOK - chart 6

 


ASIAN MARKETS

 

CHINA – winning move for Chinese stocks overnight (we’re long), putting on their best 1-day gain in 3 months, closing up +2.9% to 2225 on the Shanghai Comp after a better sequential gain in Money Supply

Growth (M2 moves to +13.6% y/y); M2’s slope of acceleration/deceleration actually tracks Chinese Equities quite well.

 

THE HEDGEYE DAILY OUTLOOK - chart 7

 

 

MIDDLE EAST

 

THE HEDGEYE DAILY OUTLOOK - chart 8

 

 

The Hedgeye Macro Team