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TODAY’S S&P 500 SET-UP – January 27, 2012

As we look at today’s set up for the S&P 500, the range is 23 points or -0.64% downside to 1310 and 1.11% upside to 1333. 

 

SECTOR AND GLOBAL PERFORMANCE

THE HEDGEYE DAILY OUTLOOK - 1

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EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: -61 (-1622) 
  • VOLUME: NYSE 866.56 (4.35%)
  • VIX:  18.57 1.42% YTD PERFORMANCE: -20.64%
  • SPX PUT/CALL RATIO: 2.03 from 1.87 (8.56%)

CREDIT/ECONOMIC MARKET LOOK:


The Bernank Tax – Good morning America; you’re still seeing zero on the rate of return on your savings accounts and everything you put in your mouth or car is going up in price – try not to chomp on too many shiny rocks. Copper is up +14% for the YTD! Brent Oil prices are pushing for $112 and US Consumption stocks did not act well either yesterday or on good news (MCD and SBUX eps).

  • TED SPREAD: 50.73
  • 3-MONTH T-BILL YIELD: 0.04%
  • 10-Year: 1.95 from 1.93
  • YIELD CURVE: 1.74 from 1.72

MACRO DATA POINTS (Bloomberg Estimates):

  • 8:30am: GDP (Q/q) (Annualized), est. 3.0% (prior 1.8%)
  • 8:30am: GDP Price Index, 4Q A, est. 1.9% (prior 2.6%)
  • 8:30am: Core PCE (Q/q), 4Q A, est. 0.9 (prior 2.1%)
  • 8:30am: Personal Consump, 4Q A, est. 2.4% (prior 1.7%)
  • 9:55am: U.Mich, Jan. F, est. 74.0 (prior 74)
  • 10am: Fed’s Dudley to speak on regional economy in NY
  • 1pm: Baker Hughes Rig Count

GOVERNMENT:

    • President Obama, VP Biden to address House Democratic Caucus annual retreat in Cambridge, Md.
    • 8am: Quinnipiac University releases results of poll of likely voters in Florida’s Republican primary on Jan. 31
    • 10am: Labor Dept. releases annual data on U.S. union membership
    • House meets in pro forma session, Senate in session

WHAT TO WATCH: 

  • U.S. economy probably expanded in 4Q by 3%, fastest pace of 2011, as consumer spending picked up and companies rebuilt stockpiles, economists est.
  • Former U.S. Treasury Secretary Larry Summers said in interview in Davos the recovery in the U.S. economy is underway, though it is not yet at “escape velocity.”
  • Omnicare PharMerica bid unlikely to get U.S. approval, NY Post says
  • FDA decision possible today on Amylin/Alkermes’s diabetes drug Bydureon
  • More than 70% of investors said attack on Iran’s nuclear facilities would create only a short-term disruption in oil markets: Bloomberg Global Poll
  • World Economic Forum

EARNINGS:

    • Newell Rubbermaid (NWL) 6:30 a.m., $0.38
    • Altria Group (MO) 6:58 a.m., $0.49
    • Alliance Holdings GP (AHGP) 7 a.m., $0.83
    • AO Smith (AOS) 7 a.m., $0.64
    • Alliance Resource Partners (ARLP) 7 a.m., $1.78
    • DR Horton (DHI) 7 a.m., $0.05
    • Ford Motor (F) 7 a.m., $0.25
    • Honeywell International (HON) 7 a.m., $1.04
    • IDEXX Laboratories (IDXX) 7 a.m., $0.63
    • Legg Mason (LM) 7 a.m., $0.25
    • Procter & Gamble (PG) 7 a.m., $1.08
    • Dominion Resources (D) 7:30 a.m., $0.64
    • NextEra Energy (NEE) 7:31 a.m., $0.91
    • T Rowe Price Group (TROW) 7:32 a.m., $0.69
    • Moog (MOG/A) 8 a.m., $0.74
    • Chevron (CVX) 8:30 a.m., $2.85
    • NuStar GP Holdings LLC (NSH) 8:43 a.m., $0.31
    • NuStar Energy (NS) 8:45 a.m., $0.31

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • Gold Bulls Ascendant Amid Biggest Rally Since 1980: Commodities
  • Copper Advances as Stockpile Orders Jump to Eight-Year High
  • Crude Heads for Weekly Gain; Total Sees $100 Support for Brent
  • Cocoa Extends Gains in London After Stockpiles Drop; Sugar Rises
  • Rubber Drops, Paring Weekly Gain, as Data Raise Growth Concern
  • Gold May Rise in London as Low Interest Rates Support Demand
  • Commodities Open Interest Dropped Most in Three Years in 2011
  • Rusal May Cut Aluminum Output 6% in Next 18 Months, CEO Says
  • Rubber Seen Driven by China Demand Recovery, StanChart Says
  • Indonesia’s Kharisma Sells 4,500 Tons of Palm Oil (Table)
  • Cattle Herd Drop to 1958 Low Boosting Cost for McDonald’s, Tyson
  • Palm Oil Seen Declining 5.2% by February: Technical Analysis
  • Copper to Stall as Record Prices Spur Mining: Chart of the Day
  • Commodities Daybook:  Oil Heads for First Weekly Gain in Three
  • Corn Heads for Biggest Weekly Gain in Five; Soybeans Advance
  • Palm Oil Posts Weekly Decline on Concern Over Malaysia Exports

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CURRENCIES


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EUROPEAN MARKETS


GERMANY – these guys have to be smiling from ear-to-ear; they effectively gave the world’s Keynesian central planners the bird for 6 months and now the German DAX is up +11.1% YTD, busting a move above my long-term TAIL line of 6503 (DAX). Import Prices in Germany dropped in DEC to 3.9% y/y vs +6.0% NOV, so look for that price pressure to come back in Jan/Feb (BernankTax).


THE HEDGEYE DAILY OUTLOOK - 6

 

ASIAN MARKETS


JAPAN – how’s that 20yr Keynesian experiment treating you? We’ll have an in depth research note out on Japan again today; JGBs and Yens are not acting like we should be ignoring this risk like the Old Wall has – may be a bigger risk than Europe’s sovereign debt within 6 months. Shorting both Japanese Yen and the Nikkei on green days (FXY and EWJ).

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MIDDLE EAST


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The Hedgeye Macro Team