THE HEDGEYE DAILY OUTLOOK

 

TODAY’S S&P 500 SET-UP – January 19, 2012


As we look at today’s set up for the S&P 500, the range is 20 points or -1.38% downside to 1290 and 0.15% upside to 1310. 

 

SECTOR AND GLOBAL PERFORMANCE

 

THE HEDGEYE DAILY OUTLOOK - 1

 

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EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: 1773 (1092) 
  • VOLUME: NYSE 797.74 (-1.58%)
  • VIX:  20.89 -5.90% YTD PERFORMANCE: -10.73%
  • SPX PUT/CALL RATIO: 1.67 from 1.42 (+17.61%)

 

CREDIT/ECONOMIC MARKET LOOK:


RATE CYCLE – this is something we talked about a lot in clients meetings in NYC for the last 2-days. This is very bullish for the US Dollar in terms of monetary policy differentials – all of Asia and Latin America are in easing mode after being hawkish while Bernanke should have been (throughout 2010). Brazil just cut by another 50bps; Philippines cut for 1st time since 09 (joining Indonesia, Thailand, Australia, etc). Bullish for Global Equities vs 2011.

  • TED SPREAD: 54.09
  • 3-MONTH T-BILL YIELD: 0.03%
  • 10-Year: 1.89 from 1.90
  • YIELD CURVE: 1.67 from 1.67

 

MACRO DATA POINTS (Bloomberg Estimates):

  • 7am: ECB president Draghi press conference with Sultan Bin Nasser al-Suwaidi of United Arab Emirates central bank
  • 8:30am: CPI (M/m), Dec., est. 0.1% (prior 0.0%)
  • 8:30am: Housing Starts, Dec., est. 680k (prior 685k)
  • 8:30am: Building Permits, Dec., est. 680k (prior 685k (revised)
  • 8:30am: Jobless Claims, week Jan. 14, est. 384k (prior 399k)
  • 9:45am: Bloomberg Consumer Comfort, week of Jan. 15
  • 10am: Freddie Mac 30-yr mortgage
  • 10:00am: Philadelphia Fed., Jan., est. 10.3 (prior 6.8 (revised)
  • 10:30am: EIA Natural gas storage
  • 11am: DoE inventories
  • 1:00pm: U.S. to sell $15b 10-Yr TIPS

 

WHAT TO WATCH: 

  • Eastman Kodak filed for bankruptcy protection from creditors, listing assets of $5.1b, debt of $6.8b
  • Bristol-Myers, AstraZeneca failed to win FDA clearance to sell first in new class of experimental diabetes pills as regulators sought more data on medicine’s safety
  • BankUnited said to decide to remain independent as takeover offers fall short of its expectations
  • Greece’s govt. in second day of talks with private creditors on accord that would slash nation’s debt
  • HUD Secretary Shaun Donovan, DoJ official set to meet with state AGs next week to rally support for proposed settlement with banks over foreclosure practices
  • TransCanada’s Keystone pipeline seen moving ahead on alternative route
  • Kinder Morgan said to be considering piece-by-piece sale of El Paso’s oil-exploration business as offers for entire operation due this week: WSJ
  • President Obama said to consider nominating Larry Summers to lead World Bank
  • Hedge funds may sue Greece in European Court of Human Rights to make good on its bond payments: NYT
  • No U.S. IPOs expected to price today

EARNINGS:

    • Huntington Bancshares (HBAN) 5:55 a.m., $0.14
    • BB&T (BBT) 6 a.m., $0.53
    • Knight Capital Group (KCG) 6 a.m., $0.25
    • UnitedHealth Group (UNH) 6 a.m., $1.04
    • BlackRock (BLK) 6:30 a.m., $2.98
    • Southwest Airlines Co (LUV) 6:50 a.m., $0.08
    • Bank of America (BAC) 7 a.m., $0.13
    • Johnson Controls (JCI) 7 a.m., $0.62
    • Morgan Stanley (MS) 7:15 a.m., $(0.57)
    • Rockwell Collins (COL) 7:30 a.m., $0.84
    • Fairchild Semiconductor (FCS) 7:30 a.m., $0.16
    • Freeport-McMoRan Copper & Gold (FCX) 8 a.m., $0.61
    • Union Pacific (UNP) 8 a.m., $1.82
    • PPG Industries (PPG) 8:11 a.m., $1.27
    • Progressive /The (PGR) 8:27 a.m., $0.35
    • Cubist Pharmaceuticals (CBST) 4 p.m., $0.33
    • Flextronics (FLEX) 4:01 p.m., $0.20
    • Google (GOOG) 4:02 p.m., $10.49
    • Capital One Financial (COF) 4:05 p.m., $1.55
    • Intel (INTC) 4:05 p.m., $0.61
    • Intuitive Surgical (ISRG) 4:05 p.m., $3.34
    • People’s United Financial (PBCT) 4:05 p.m., $0.19
    • American Express Co (AXP) 4:06 p.m., $0.99
    • International Business Machines (IBM) 4:06 p.m., $4.62
    • Microsoft (MSFT) 4:06 p.m., $0.76
    • Associated Banc-corp (ASBC) 4:10 p.m., $0.23
    • Skyworks Solutions (SWKS) 4:30 p.m., $0.50

 

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

 

COPPER – when the Doctor gives us the signal, we listen. That breakout my model signaled last week > $3.45/lb was as pure as a cold Canadian beer on the 1st of July. Copper up another +1.4% this morning in what should be considered nothing short of a massive squeeze = +11% YTD.

  • Sugar Traders Bet Biggest Glut in Five Years Ending: Commodities
  • Oil Gains in New York on Shrinking Stockpiles, Iranian Risks
  • Copper Climbs on Speculation China May Relax Curbs on Credit
  • Thai Rice Production Seen Climbing to Record After Floods
  • Gold Advances to a 1-Month High as Euro Rallies, Demand Gains
  • Corn Advances on ‘Irreversible’ Damage to Crops in Argentina
  • Cocoa Gains as West Africa Supply May Start to Slow; Sugar Rises
  • U.S. May Expand Corn Output to Offset Argentina Loss, FAO Says
  • Palm Oil Imports by Pakistan May Plunge on Truckers’ Strike
  • Super Bowl Chicken Wings Flying to Record High: Chart of the Day
  • Shell Venture Spurs Cosan’s Investment-Grade Bid: Brazil Credit
  • Oil Grab in Falkland Islands Seen Tripling U.K. Reserves: Energy
  • Cholera Risk Means Mounting Costs for Hapag-Lloyd, Torm: Freight
  • COMMODITIES DAYBOOK: Crude Rises on Shrinking Supply, Iran Risk
  • Food Demand to Stay ‘Strong’ Amid Global Slowdown, Viterra Says
  • Palm Oil Prices to Be ‘Firm’ in 2012 on Crude Oil, Soybeans
  • Aluminum May Extend Rally to $2,295 Per Ton: Technical Analysis

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CURRENCIES


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EUROPEAN MARKETS


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ASIAN MARKETS


CHINA – get the slope of the money supply and lending cycle in China right (finally easing instead of tightening), you’ll get a lot of things Chinese Growth right. Shanghai Comp and Hang Seng both up another +1.3% respectively overnight on “news” that China’s top 5 banks are going to ease lending reqs. End of the world thesis = bad YTD.

 

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MIDDLE EAST


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The Hedgeye Macro Team


Did the US Economy Just “Collapse”? "Worst Personal Spending Since 2009"?

This is a brief note written by Hedgeye U.S. Macro analyst Christian Drake on 4/28 dispelling media reporting that “US GDP collapses to 0.7%, the lowest number in three years with the worst personal spending since 2009.”

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7 Tweets Summing Up What You Need to Know About Today's GDP Report

"There's a tremendous opportunity to educate people in our profession on how GDP is stated and projected," Hedgeye CEO Keith McCullough wrote today. Here's everything you need to know about today's GDP report.

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Cartoon of the Day: Crash Test Bear

In the past six months, U.S. stock indices are up between +12% and +18%.

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GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist

“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.

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Exact Sciences Up +24% This Week... What's Next? | $EXAS

We remain long Exact Sciences in the Hedgeye Healthcare Position Monitor.

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Inside the Atlanta Fed's Flawed GDP Tracker

"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.

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Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

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People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

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UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

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Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

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Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

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An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

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