THE HEDGEYE DAILY OUTLOOK

 

TODAY’S S&P 500 SET-UP – January 11, 2012


As we look at today’s set up for the S&P 500, the range is 25 points or -1.48% downside to 1273 and 0.46% upside to 1298. 

 

SECTOR AND GLOBAL PERFORMANCE

 

THE HEDGEYE DAILY OUTLOOK - onefinal

 

THE HEDGEYE DAILY OUTLOOK - two

 

THE HEDGEYE DAILY OUTLOOK - three

 

EQUITY SENTIMENT:


TREASURIES – literally the only major leading indicator in our macro model that has not yet confirmed bullish immediate-to-intermediate-term slopes of growth and inflation readings. TRADE line support for 10yr yields = 1.96% (so we’re above that), but the TREND up at 2.03% is the biggest line in the sand that has not yet been traversed. Stay tuned.

  • ADVANCE/DECLINE LINE: 1633 (+821) 
  • VOLUME: NYSE 840.83 (16.48%)
  • VIX:  20.69 -1.80% YTD PERFORMANCE: -11.58%
  • SPX PUT/CALL RATIO: 1.40 from 2.03 (-31.03%)

 

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 57.44
  • 3-MONTH T-BILL YIELD: 0.01%
  • 10-Year: 1.95 from 1.98
  • YIELD CURVE: 1.71 from 1.74

 

MACRO DATA POINTS (Bloomberg Estimates):

  • 7:00am: MBA Mortgage Applications, Jan. 6 (prior -4.1%)
  •  8:40am: Fed’s Evans speaks on U.S. economy in Illinois
  • 9:00am: Fed’s Lockhart to speak on economy in Atlanta
  • 10:30am: DoE inventories
  • 12:30pm: Fed’s Plosser speaks on economy in Rochester, NY
  • 1:00pm: U.S. to sell $21b 10-yr notes (reopen)
  • 2:00pm: Fed’s Beige Book

 

WHAT TO WATCH: 

  • Mitt Romney wins New Hampshire primary, Ron Paul finishes second; South Carolina primary next
  • Microsoft said 4Q industry PC sales will probably be lower than analyst est. on Thailand flooding
  • Geithner meets with Chinese officials, encouraged by comments on growth; due to meet Japanese PM Yoshihiko Noda
  • MetLife to shut its home mortgage-origination operation, costing at least $90m; most of 4,300 units employees to lose jobs
  • CFTC may vote on Dodd-Frank Act proposal that would limit proprietary trading by banks, limit hedge fund investments
  • CEOs of Deutsche Boerse AG, NYSE Euronext meet in NY today as they seek to overcome opposition to exchange combination
  • MF Managing Director Christine Lagarde to meet with French President Sarkozy after meeting with German Chancellor Merkel yday. Merkel, Italian Prime Minister Monti give news conference ~7am ET
  • Supervalu releases earnings at 8am; watch gross margin, forecast
  • Lennar releases earnings at 6am; watch orders, traffic, mortgage availability
  • No IPOs planned

 

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)


COPPER – the Doctor is in the Global Macro house this morning! Ringing the alarm clocks on the bears early (and loudly), up +1.1% isn’t the point as much as an intermediate-term TREND breakout > $3.45/lb – we’ll see if that holds (still below TAIL resist of $3.98), but Copper likes what it sees out of China all of a sudden.

  • U.S. Wheat Expanding From Century Low as Glut Looms: Commodities
  • Coal Set to Rebound After Worst Year Since 2005: Energy Markets
  • Oil Falls From Near One-Week High After German Economy Shrinks
  • China’s Gold Imports From Hong Kong Reach Record on Demand
  • Soybeans Fall as Cooler Weather in South America May Help Crops
  • Cocoa Retreats by 3.1% on NYSE Liffe, Erasing Earlier Gains
  • Copper Trades Unchanged at $7,740 a Ton in London, Erasing Gain
  • Thailand to Buy Rubber at Above-Market Rates After Protests
  • Red Kite Evangelicals Reap 47% Sowing Bet on China Copper Market
  • Rio, Fortescue Halt Ore Loading, Ports Shut as Cyclone Nears
  • Exxon, Vitol Said to Sell Nigeria Oil Supply to Bharat Petroleum
  • Russia Resumes Crude Oil Deliveries to China Via Kazakh Pipeline
  • Iranian Nuclear Scientist Killed in New Attack Against Program
  • COMMODITIES DAYBOOK: U.S. Wheat Acreage Expands Most in 3 Years
  • Gold Climbs to 4-Week High on China Demand, Europe Debt Concerns
  • Rapeseed May Advance 5.9% in Retracement: Technical Analysis
  • Australian Ports Shut for Cyclone Export 41% of Global Ore Trade

 

THE HEDGEYE DAILY OUTLOOK - four

 

 

CURRENCIES

 

THE HEDGEYE DAILY OUTLOOK - five

 

 

EUROPEAN MARKETS


THE HEDGEYE DAILY OUTLOOK - six

 


ASIAN MARKETS


 HANG SENG – in our core multi-factor model, this index carries a heavy-weight as a leading indicator – so seeing last night’s follow through buying (on volume, ahead of more Chinese data this week) is just bullish. Hang Seng +0.8% to 19,151 matters because it’s an explicit confirmation of an intermediate-term TREDN breakout > 18,616 support. China Growth Slowing at a slower pace.

 

THE HEDGEYE DAILY OUTLOOK - seven

 

 

MIDDLE EAST


THE HEDGEYE DAILY OUTLOOK - eight

 

 

 

The Hedgeye Macro Team

 

 

 


Cartoon of the Day: 'Biggest Tax Cut Ever'

President Donald Trump's economic team unveiled what he called last week, "the biggest tax cut we’ve ever had.” Before you get too excited about that hang on a sec. "Trump Tax Reform ain’t gettin’ done anytime soon," Hedgeye CEO Keith McCullough wrote in today's Early Look.

read more

Neurofinance: The Psychology Behind When To Sell A Bull Market

"Most momentum investors stay invested too long, under-reacting and holding tight after truly bad news finally arrives to break the trend," writes MarketPsych's Richard Peterson.

read more

Energy Stocks: Time to Buy the Dip? | $XLE

What the heck is happening in the Energy sector (XLE)? Energy stocks have trailed the S&P 500 by a whopping 15% in 2017. Before you buy the dip, here's what you need to know.

read more

Cartoon of the Day: Hard-Headed Bears

How's this for "hard data"? So far, 107 of 497 S&P 500 companies have reported aggregate sales and earnings growth of 4.4% and 13.2% respectively.

read more

Premium insight

McCullough [Uncensored]: When People Say ‘Everyone is Bullish, That’s Bulls@#t’

“You wonder why the performance of the hedge fund indices is so horrendous,” says Hedgeye CEO Keith McCullough, “they’re all doing the same thing, after the market moves. You shouldn’t be paid for that.”

read more

SECTOR SPOTLIGHT Replay | Healthcare Analyst Tom Tobin Today at 2:30PM ET

Tune in to this edition of Sector Spotlight with Healthcare analyst Tom Tobin and Healthcare Policy analyst Emily Evans.

read more

Ouchy!! Wall Street Consensus Hit By Epic Short Squeeze

In the latest example of what not to do with your portfolio, we have Wall Street consensus positioning...

read more

Cartoon of the Day: Bulls Leading the People

Investors rejoiced as centrist Emmanuel Macron edged out far-right Marine Le Pen in France's election day voting. European equities were up as much as 4.7% on the news.

read more

McCullough: ‘This Crazy Stat Drives Stock Market Bears Nuts’

If you’re short the stock market today, and your boss asks why is the Nasdaq at an all-time high, here’s the only honest answer: So far, Nasdaq company earnings are up 46% year-over-year.

read more

Who's Right? The Stock Market or the Bond Market?

"As I see it, bonds look like they have further to fall, while stocks look tenuous at these levels," writes Peter Atwater, founder of Financial Insyghts.

read more

Poll of the Day: If You Could Have Lunch with One Fed Chair...

What do you think? Cast your vote. Let us know.

read more

Are Millennials Actually Lazy, Narcissists? An Interview with Neil Howe (Part 2)

An interview with Neil Howe on why Boomers and Xers get it all wrong.

read more