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Hedgeye Happy Hour Tonight

 

Join us in welcoming another winning New Year this evening from 6:00 to 9:00 PM. The celebration will take place at the Sake & Shochu Lounge at Zengo Restaurant, located on 622 Third Avenue at 40th Street, New York NY.

 

Click Here!

 

For furthers questions and RSVPs please contact us at .

 

Best Wishes,

The Hedgeye Macro Team


THE HBM: SBUX, CMG

THE HEDGEYE BREAKFAST MONITOR

 

MACRO NOTES

 

Initial Claims

 

Initial jobless claims came in at 399k versus 375k consensus and 375k (revised up 3k) the week prior.

 

THE HBM: SBUX, CMG - initial claims

 

 

Comments from CEO Keith McCullough

 

The manic attempting to do macro have not realized that the European bond auctions are not where the game is at right now. Squeeze:

  1. CHINA – the biggest Global Macro risk management shift of the last 3 wks has been both China’s high-frequency economic data and the reactions in both the China local and H-shares markets; China reported a CPI level of +4.1% DEC (inline w/ our estimate) – that’s down 10bps vs last mth and, more importantly = 15mth low. Chinese stocks +3.5% for 2012 YTD and we’re long them (CAF) + EWH.
  2. INFLATION – there’s a big difference b/t Q2 of 2011 levels of global food/energy inflation and what you are seeing around the world now – a sequential DEFLATION OF THE INFLATION = big Q1 Macro Theme for us that I went through in the slide deck yesterday. This should continue to auger bullish for both Global Consumption and for the stocks that react to it. Germany’s CPI benign for DEC at 2.1%.
  3. COPPER – the Doctor’s signal that I gave you yesterday was a pure one = breakout > intermediate-term TREND line support of 3.45/lb and obviously getting squeezed to immediate-term TRADE overbought here (3.59 last), but this is one of the epicenters of what’s been a royal short squeeze of everything that didn’t work in NOV/DEC (Financials, Basic Materials, Pandora – the list is long).

 

All of this, of course, builds into a crescendo of short covering at another immediate-term top for the SP500. I have that at 1299, so sell there, and re-load your gross exposure on what’s going to be another inevitable correction towards 1277.

 

 

SUBSECTOR PERFORMANCE

 

THE HBM: SBUX, CMG - subsector fbr

 

 

QUICK SERVICE

 

SBUX: Starbucks is maintaining a coffee sourcing MOU it has with India’s Tata Coffee Ltd. after India’s government formally removed the limit on foreign investment in single-brand retail.

 

SBUX: Starbucks target increased to $52 from $47 at UBS.

 

CMG: Chipotle is starting construction on a second ShopHouse restaurant in a contiguous trade area to the current location.

 

THE HBM: SBUX, CMG - stocks

 

 

Howard Penney

Managing Director

 

Rory Green

Analyst

 



Early Look

daily macro intelligence

Relied upon by big institutional and individual investors across the world, this granular morning newsletter distills the latest and most vital market developments and insures that you are always in the know.



THE HEDGEYE DAILY OUTLOOK

 

TODAY’S S&P 500 SET-UP – January 12, 2012


As we look at today’s set up for the S&P 500, the range is 22 points or -1.20% downside to 1277 and 0.50% upside to 1299. 

 

SECTOR AND GLOBAL PERFORMANCE

 

THE HEDGEYE DAILY OUTLOOK - chart1

 

THE HEDGEYE DAILY OUTLOOK - chart2

 

THE HEDGEYE DAILY OUTLOOK - chart3

 

 

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: 259 (-1374) 
  • VOLUME: NYSE 759.12 (-9.72%)
  • VIX:  21.05 +1.74% YTD PERFORMANCE: -10.04%
  • SPX PUT/CALL RATIO: 2.18 from 1.40 (+55.71%)

 

CREDIT/ECONOMIC MARKET LOOK:


INFLATION – there’s a big difference b/t Q2 of 2011 levels of global food/energy inflation and what you are seeing around the world now – a sequential DEFLATION OF THE INFLATION = big Q1 Macro Theme for us that Keith went through in the slide deck yesterday. This should continue to auger bullish for both Global Consumption and for the stocks that react to it. Germany’s CPI benign for DEC at 2.1%.

 

  • TED SPREAD: 56.63
  • 3-MONTH T-BILL YIELD: 0.02%
  • 10-Year: 1.92 from 1.90
  • YIELD CURVE: 1.70 from 1.68

 

MACRO DATA POINTS (Bloomberg Estimates):

  • 7:00am: BOE announces rates, est. 0.5% (prior 0.5%)
  • 7:45am: ECB announces interest rates, est. 1% (prior 1%)
  • 8:30am: Advance Retail Sales, Dec., est. 0.3% (prior 0.2%)
  • 8:30am: Jobless Claims, week Jan. 7, est. 375k (prior 372k)
  • 8:30am: USDA Quarterly grain stocks, WASDE monthly
  • 9:45am: Bloomberg Consumer Comfort, week Jan. 8 (prior -44.8)
  • 10am: Freddie Mac 30-yr mortgage
  • 10am: Business Inventories, Nov., est. 0.4% (prior 0.8%)
  • 1pm: U.S. to sell $13b 30-yr bonds (reopen)
  • 2pm: Monthly Budget Statement, Dec., est. -83.7b (prior -78.1b)

 

WHAT TO WATCH: 

  • ECB likely to maintain interest rates at 1%; watch for comments by Mario Draghi at 8:30am ET
  • Bank of England rates decision, 7am ET
  • Sales at U.S. retailers may have risen 0.3% in Dec. on holiday discounts, economists est.
  • Vestas Wind Systems to cut 2,335 jobs worldwide; says 1,600 U.S. posts at risk as tax credit expires
  • Kinder Morgan said to prepare to start talks on selling off parts of El Paso’s oil and gas E&P unit in case it can’t find a buyer for the whole division.
  • President Obama said to reprise previously rejected deficit- reduction plans and tax increases on the wealthy as part of his FY2013 budget
  • Infosys cuts dollar sales forecast, citing global economy
  • Banks may seize more than 1m U.S. homes this year, up 25% Y/y, RealtyTrac said
  • U.S. may block Omnicare’s $716m bid for PharMerica: NYPost
  • Deutsche Bank executives said to decide to pursue sale of asset-management units after they were satisfied with early interest in the business
  • RBS to cut 3,500 jobs as it jettisons equities, mergers units U.S. Chamber of Commerce President Thomas Donohue delivers
  • “State of American Business” address, 9am
  • American Bankers Association holds news conference on consensus economic forecast, monetary policy predictions, 10am
  • No IPOs expected to price

 

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

 

COPPER – the Doctor’s signal that we gave you yesterday was a pure one = breakout > intermediate-term TREND line support of 3.45/lb and obviously getting squeezed to immediate-term TRADE overbought here (3.59 last), but this is one of the epicenters of what’s been a royal short squeeze of everything that didn’t work in NOV/DEC (Financials, Basic Materials, Pandora – the list is long).

  • China May Idle Most Aluminum Capacity Since 2009: Commodities
  • Oil Options Signal Doubt Iran Crisis Will Worsen: Energy Markets
  • LME’s Board in ‘Robust Debate’ After Decision to Raise Fees
  • World Food Prices Declined by 2.4% in December, UN’s FAO Says
  • China’s Central Bank May Be Behind Gold Import Rise, Pixley Says
  • Oil Climbs From Two-Week Low on Nigeria Disruption, Iran Tension
  • Coffee Reaches 4-Week High on Vietnam Bean Hoarding; Cocoa Drops
  • Copper Advances for Third Day as Spain’s Bond Sale Exceeds Goal
  • Silver Coin Sales May Signal Bear-Market End: Chart of the Day
  • EU Sugar Export Applications Exceeded the Limit by 2.5 Times
  • Soybeans Gain as USDA May Cut Estimate for World Oilseed Stocks
  • Freepoint Commodities Plans Asian Expansion After European Push
  • China Trade Spurs $115 Billion Australia Building Boom: Freight
  • COMMODITIES DAYBOOK: China May Idle Third of Aluminum Capacity
  • Gold Gains for Third Day as Dollar’s Drop May Spur More Demand
  • Plunging Bearish Gold Options Signal Rally: Chart of the Day
  • European States Said to Vote on Suspending Sugar-Import Tenders

 

THE HEDGEYE DAILY OUTLOOK - chart4

 

 

CURRENCIES

 

THE HEDGEYE DAILY OUTLOOK - chart5

 

 

EUROPEAN MARKETS


THE HEDGEYE DAILY OUTLOOK - chart6

 


ASIAN MARKETS

 

CHINA – the biggest Global Macro risk management shift of the last 3 wks has been both China’s high-frequency economic data and the reactions in both the China local and H-shares markets; China reported a CPI level of +4.1% DEC (inline w/ our estimate) – that’s down 10bps vs last month and, more importantly = 15 month low. Chinese stocks +3.5% for 2012 YTD and we’re long them (CAF) + EWH.

 

THE HEDGEYE DAILY OUTLOOK - chart7

 

 

MIDDLE EAST


THE HEDGEYE DAILY OUTLOOK - chart8

 

 

 

The Hedgeye Macro Team

 


Hedgeye Statistics

The total percentage of successful long and short trading signals since the inception of Real-Time Alerts in August of 2008.

  • LONG SIGNALS 80.64%
  • SHORT SIGNALS 78.57%
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