• It's Coming...

    MARKET EDGES

    Identify global risks and opportunities with essential macro intel using Hedgeye’s Market Edges.

TODAY’S S&P 500 SET-UP – January 10, 2012


As we look at today’s set up for the S&P 500, the range is 22 points or -0.91% downside to 1269 and 0.80% upside to 1291. 

 

SECTOR AND GLOBAL PERFORMANCE

THE HEDGEYE DAILY OUTLOOK - chart1f

THE HEDGEYE DAILY OUTLOOK - CHART2

THE HEDGEYE DAILY OUTLOOK - CHART3

 

EQUITY SENTIMENT:

US EQUITIES – the Pain Trade is still up and that’s why we have our highest asset allocation to US Equities in a year (18%); that probably doesn’t make us bullish enough, but it’s better than the alternative – which is staying locked in w/ our 2011 Growth Slowing view. We’ll go through our US scenario for GDP growth accelerating to 2.2-2.8% (consensus = 2.1%) on tomorrow’s Macro Theme Call.

  • ADVANCE/DECLINE LINE: 812 (+1012) 
  • VOLUME: NYSE 721.88 (1.56%)
  • VIX:  21.07 2.13% YTD PERFORMANCE: -9.96%
  • SPX PUT/CALL RATIO: 2.03 FROM 1.40 (45%)

 

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 57.54
  • 3-MONTH T-BILL YIELD: 0.01%
  • 10-Year: 1.98 from 1.97
  • YIELD CURVE: 1.73 from 1.709

 

MACRO DATA POINTS (Bloomberg Estimates):

  • 7:30am: NFIB Small Business, Dec., est. 93.8 (prior 92.0)
  • 7:45am/8:55am: ICSC/Redbook weekly retail comp sales
  • 10:00am: IBD/TIPP Economic Optimism, Jan., est. 45.3 (prior 42.8)
  • 10:00am: JOLTs Job Openings, Nov.
  • 10:00am: Wholesale Inventories, Nov., est. 0.5% (prior 1.6%)
  • 10:30am: Fed’s Williams to speak on economy in Vancouver, Washington
  • 11:10am: Fed’s Pianalto speaks on labor markets in Ohio
  • 11:30am: U.S. to sell $30b 4-wk, $25b 52-wk bills
  • 1:00pm: U.S. to sell $32b 3-yr notes
  • 1:00pm: Fed’s George speaks on economic outlook in Kansas City

WHAT TO WATCH: 

  • U.S. Treasury Secretary Geithner will urge China, Japan to cut Iranian oil imports, seek to narrow differences with China on trade, currency during visits 
  • Bank of New York Mellon close to settling some claims in U.S. lawsuit accusing the bank of overcharging customers for FX trading 
  • Fiat, Chrysler may seek to combine with another automaker to increase efficiencies, CEO Sergio Marchionne said yday
  • Merck says it will make whatever deals are necessary in race for future hepatitis C combination therapies 
  • Intel CEO Paul Otellini holds keynote speech at CES, 7:30pm
  • Bob Evans may lure bids from leveraged buyout firms as cheapest restaurant, Miller Tabak & Co. says
  • New Hampshire holds primaries 
  • JP Morgan Health Care, CES conferences continue
  • No IPOs expected to price: Bloomberg data

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  •  Biggest Rubber Glut Since 2004 Cuts Michelin Costs: Commodities
  • Oil Rises First Day in Four on Iran Dispute, Euro Debt Meeting
  • Gold Advances in London on Physical Demand, Low Rates Appeal
  • Copper Rises Most in a Week on Record Metal Imports Into China
  • wheat Falls as Stockpiles May Increase; Corn, Soybeans Slide
  • Cocoa Reaches Six-Week High on Demand Outlook; White Sugar Gains
  • la Nina Seen Near Peak as Dryness Parches Argentine Corn
  • Gasoline Supply Reaches 10-Month High in Survey: Energy Markets
  • Youngstown Opens Mills Again as States Jockey for Fracking Jobs
  • Uranium Ban at U.S. Grand Canyon Pits Tourism Against Mining
  • Indonesian Bourse Delays Start of Tin Contract Until Next Month
  • MF Global Customer Sapere Seeks Commodity Customer Priority
  • Shipping Crash Survivor Turning Profit as Fleet Expands: Freight
  • COMMODITIES DAYBOOK: Oil Rises Before Meeting on Europe Crisis
  • Nigeria Strike Halts Cocoa Grading, Transportation From Farms
  • China’s 2011 Soybean Imports Fall First Time in Seven Years
  • Alcoa Has First Quarterly Loss Since 2009 After Prices Drop

THE HEDGEYE DAILY OUTLOOK - CHART4

CURRENCIES

 

THE HEDGEYE DAILY OUTLOOK - CHART5

EUROPEAN MARKETS


GERMANY – both German Equities and Bunds act very well in the face of Deutsche Bank melting down. Call the Germans whatever you want to call them, but don’t call them the bailout bankers that some Americans became during our banking crisis – these guys are letting prices clear, to a degree, which is impressive. DAX up +2.1% this morn, well above 6045 TRADE line support.


THE HEDGEYE DAILY OUTLOOK - CHART6

 

ASIAN MARKETS


CHINA – the Shanghai Composite followed up yesterday’s +2.9% gain w/ another boomer of a +2.7% move to the upside overnight, taking Chinese stocks to +3.9% for 2012 YTD. We’re long both China and Hong Kong (CAF and EWH) as we think Growth’s Bottom (a deceleration of the slowdown) may very well be happening in Q112. Bottom’s are processes, not points.

 

THE HEDGEYE DAILY OUTLOOK - CHART7

 

MIDDLE EAST


THE HEDGEYE DAILY OUTLOOK - chart8f

The Hedgeye Macro Team