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TODAY’S S&P 500 SET-UP – January 17, 2012

As we look at today’s set up for the S&P 500, the range is 18 points or -0.39% downside to 1284 and 1.00% upside to 1302. 

SECTOR AND GLOBAL PERFORMANCE

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EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: -922 (-1591) 
  • VOLUME: NYSE 827.88 (+7.51%)
  • VIX:  20.91 +2.15% YTD PERFORMANCE: +10.64%
  • SPX PUT/CALL RATIO: 1.82 from 1.55 (+17.54%)

 

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 54.46
  • 3-MONTH T-BILL YIELD: 0.02%
  • 10-Year: 1.89 from 1.86   
  • YIELD CURVE: 1.67 from 1.64

 

MACRO DATA POINTS (Bloomberg Estimates):

  • 8:30am: Empire Manufacturing, Jan., est. 11 (prior 9.53)
  • 8:30am: NOPA oil stocks, soybean capacity
  • 11am: Export inspections, corn, soybean, wheat
  • 11:30am: U.S. to sell $29b 3-mo., $27b 6-mo. bills
  • 9pm: World Bank releases new growth forecasts

 

WHAT TO WATCH: 

  • BB&T, Toronto-Dominion Bank said to be among cos. in talks to buy BankUnited
  • Ista Pharmaceuticals received revised non-binding takeover offer from Valeant, will consider updated proposal
  • Electricite de France withdrew opposition to merger between Exelon, Constellation Energy
  • Georgia Gulf yesterday rejected $1.03b buyout offer from Westlake Chemical as too low
  • Morgan Stanley said to plan to tell employees this week it’s capping, delaying some bonuses: WSJ
  • IRS pursuing documents from CME Group as part of probe into whether some members underreported income earned from leasing their seats
  • Greek PM due to meet tomorrow with group representing private Greek bondholders after 5-day break to discuss forgiving at least half of nation’s debt
  • Seventh victim recovered from Costa Concordia cruise ship; Carnival fell 16% in London yday; also watch RCL
  • Capital One, Citigroup among those reporting monthly credit- card delinquencies, charge-offs
  • Solyndra deadline today for final bids to buy bankrupt co. that got $535m in govt. loan guarantees
  • New York Governor Andrew Cuomo to announce budget at 1pm on spending cuts to erase $2b deficit in yr starting April
  • “Contraband” from Universal opened as weekend’s top film in N.A. theaters 
  • No IPOs scheduled
  • EARNINGS: Citigroup, Wells Fargo, McMoran among those reporting financial results today. Selected companies, with approximate time and Bloomberg est.:
    • TD Ameritrade Holding (AMTD) 7:30 a.m., $0.26
    • M&T Bank (MTB) 7:46 a.m., $1.52
    • Forest Laboratories (FRX) 8 a.m., $1.01
    • First Republic Bank/SF (FRC) 8 a.m., $0.43
    • Citigroup (C) 8 a.m., $0.52
    • Wells Fargo & Co (WFC) 8 a.m., $0.72
    • McMoRan Exploration Co (MMR) 8 a.m., $(0.13)
    • Cree (CREE) 4 p.m., $0.26
    • Fulton Financial (FULT) 4:30 p.m., $0.20
    • American Water Works Co (AWK) 4:30 p.m., $0.33
    • Linear Technology (LLTC) 5 p.m., $0.38
    • Bank of the Ozarks (OZRK) 6 p.m., $0.49
    • Adtran (ADTN) 8 p.m., $0.46

 

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

COPPER – the breakout above our intermediate-term TREND line of $3.45/lb last week helps bust a huge +3.1% meltup this morning to $3.75/lb; TAIL resistance remains overhead at $3.99, but this move should force capitulation on the short covering side.

  • Consumer Electronics Frenzy Tops $1 Trillion as Tin Rebounds: Commodities
  • Commodities Rise Most in Two Weeks Amid Speculation China May Ease Policy
  • Copper Nears Four-Month High on Chinese Growth, Falling Production At Rio
  • Oil Rises to Three-Day High as Saudi Arabia Is Seen Targeting $100 Crude
  • Gold Climbs to One-Month High on China Easing Outlook, Weakening Dollar
  • Coffee Gains for a Second Day as Colombian Harvest Declines; Sugar Rises
  • Soybeans, Corn Advance as China May Ease Policy After Slowdown in Growth
  • India Increases Tax on Bullion Imports as Government Seeks to Lift Revenu
  • Posco 2011 Profit Declines as Demand for Steel Wanes, Missing Estimates
  • Persian Gulf Debt Risk at Two-Year High on Iran Hormuz Fears: Arab Credit
  • Best Refiner Returns on Naphtha Since May Show China Boom: Energy Markets
  • Sino-Forest Rallies on Outlook for China Asset Recoveries: Canada Credit
  • Morgan Stanley Favors Gold, Copper on Investment Demand, Global Shortage
  • Commodities Rally on Optimism China May Ease Policy

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CURRENCIES

 

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EUROPEAN MARKETS

GERMANY – can you say ZEW? Biggest m/m pop in the German confidence reading ever – and ever is a long-time; DAX +1.7% to +7.2% for 2012 YTD! And finally immediate-term TRADE overbought here. Germany has done a great job, all things considered, keeping unemployment low and fiscal conservatism intact.


THE HEDGEYE DAILY OUTLOOK - 6

 

ASIAN MARKETS

CHINA – Chinese stocks up +4.2% overnight and we’ll take that on the long side with a smile as Chinese GDP beats bombed out expectations w/ a +8.9% y/y Q4 print and, more importantly, a re-acceleration in Industrial Production in DEC to +12.8% y/y vs +12.4% NOV + a big re-accel in Singapore’s Exports to +9% y/y in DEC vs +1.4% NOV

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MIDDLE EAST

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The Hedgeye Macro Team