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The Call @ Hedgeye | March 28, 2024

TODAY’S S&P 500 SET-UP – January 20, 2012

As we look at today’s set up for the S&P 500, the range is 22 points or -1.64% downside to 1293 and 0.04% upside to 1315. 

 

SECTOR AND GLOBAL PERFORMANCE

THE HEDGEYE DAILY OUTLOOK - CHART1

THE HEDGEYE DAILY OUTLOOK - CHART2

THE HEDGEYE DAILY OUTLOOK - CHART3

 

EQUITY SENTIMENT:


OVERBOUGHT – from the Hang Seng (+9.1% YTD) to the DAX (+8.2% YTD) and back again to the SP500 (+4.5% YTD), this season is not even 3 weeks old and we’ve already realized what we think is an outstanding YTD return on equity given the Bernank calls risk free 0%. Immediate-term overbought lines for HK, DAX, and SPX are 20,113, 6424, and 1315, respectively.

DEFLATING THE INFLATION – this is Global Macro Theme #2 for us here in Q1 and it really matters – across the board we’re seeing the impact of a Strong Dollar on DEC CPI and PPI prints across the world (US CPI dropped to 3.0% DEC vs 3.4% NOV, German PPI drops this morn to 4.0% DEC vs 5.2% NOV, New Zealand CPI falls hard to 1.8% in Q4 vs 4.6% Q3).

  • ADVANCE/DECLINE LINE: 922 (-851) 
  • VOLUME: NYSE 806.03 (+1.04%)
  • VIX:  19.87 -4.88% YTD PERFORMANCE: -15.09%
  • SPX PUT/CALL RATIO: 1.11 from 1.67 (-33.53%)

CREDIT/ECONOMIC MARKET LOOK:


TREASURIES – it took all week for the bond market to give The Fed something to think about (as Growth expectations rise, interest rates should), but this breakout above my immediate-term TRADE line of 1.95% support for 10s matters. Seeing the 10yr consistently close > 2.03% would be very bearish for the long-bond, bullish for stocks (especially Financials).

  • TED SPREAD: 52.05
  • 3-MONTH T-BILL YIELD: 0.03%
  • 10-Year: 1.99 from 1.98
  • YIELD CURVE: 1.76 from 1.74

 

MACRO DATA POINTS (Bloomberg Estimates):

  • 10am: Existing home sales, Dec., est. 4.65m, up 5.2% (prior 4.42m)
  • 10am: API monthly report
  • 1pm: Baker Hughes rig count

WHAT TO WATCH: 

  • Sales of previously owned U.S. homes probably rose 5.2% in Dec. to 4.65m annual rate, highest level in more than a year, economists est.
  • General Electric reports pre-mkt; has outperformed since Dec. investor meeting
  • JPMorgan, State Street and Ameriprise Financial among final bidders for asset management division of Deutsche Bank: Reuters
  • U.K. Dec. retail sales rose 0.6%, matching median forecast
  • IMF cuts global growth forecast for 2012, Telegraph says, citing leaked memo
  • Eastman Kodak got approval to borrow as much as $650m to support ops as it pursues patent sales
  • European banks have until end of today to tell national regulators how they plan to meet capital targets, to then be discussed by European Banking Authority
  • NYSE Euronext head says exchange may appeal if Europe blocks merger with Deutsche Boerse: WSJ
  • Samsung Electronics lost patent infringement suit against Apple at court in Mannheim, Germany; first decision in group of patent cases cos. filed against each other in the country
  • Carnival Corp. suspended broadcast, digital and direct-mail marketing for its namesake line
  • Senate Minority Leader Mitch McConnell urged Democratic leaders to shelve anti-piracy bill; faces procedural vote Jan. 24

  EARNINGS:

      • Schlumberger (SLB) 6 a.m., $1.09
      • SunTrust Banks (STI) 6 a.m., $0.27
      • Prosperity Bancshares (PB) 6:03 a.m., $0.76
      • Fifth Third (FITB) 6:30 a.m., $0.35
      • General Electric (GE) 6:30 a.m., $0.38
      • Comerica (CMA) 6:40 a.m., $0.51
      • First Horizon National (FHN) 7 a.m., $0.14
      • Parker Hannifin (PH) 7:30 a.m., $1.63

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • Oil Trims Weekly Gain as Greek Risk Offsets U.S. Rebound Hopes
  • Gold Falls as Dollar’s Advance, Asian Holidays May Curb Demand
  • Copper Falls as Chinese Manufacturing May Shrink for Third Month
  • Copper Bears Retreat as Prices Rally Most Since ‘87: Commodities
  • Sugar Rises on Limited Supply Before Brazil’s Crop; Coffee Gains
  • Corn Declines as Council Forecasts Record Global Production
  • Coffee Output in India May Miss Estimate on Rains, Group Says
  • Pemex’s Offering Spurs Busiest Week Since August: Mexico Credit
  • Korean Shipyards to Buy 12% Less Steel as Slump Hits Posco
  • Gold May Gain 8.7% to Near Fibonacci Level: Technical Analysis
  • Wildcatter Finds $10 Billion Drilling in North Dakota: Energy
  • Batista’s MMX Not Interested in Deal With Falcone-Backed Ferrous
  • North Korea Sees Chinese Storming in as Mineral Wealth Attracts
  • COMMODITIES DAYBOOK: Gold Set for Best Weekly Run in Two Months
  • Kinross in Play After Paying Too Much in African Gold: Real M&A
  • U.S. Steel Bonds Rebound to Par on Auto Sales: Corporate Finance
  • Copper Traders Probably Closed Out Bets on Declining Prices

THE HEDGEYE DAILY OUTLOOK - CHART4

CURRENCIES


THE HEDGEYE DAILY OUTLOOK - CHART5

EUROPEAN MARKETS


THE HEDGEYE DAILY OUTLOOK - CHART6

 

ASIAN MARKETS

THE HEDGEYE DAILY OUTLOOK - CHART7

 

 

MIDDLE EAST


THE HEDGEYE DAILY OUTLOOK - CHART8

The Hedgeye Macro Team