THE HEDGEYE DAILY OUTLOOK


TODAY’S S&P 500 SET-UP – January 31, 2012

 

As we look at today’s set up for the S&P 500, the range is 18 points or -0.53% downside to 1306 and 0.84% upside to 1324. 

 

SECTOR AND GLOBAL PERFORMANCE

 

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EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: -797 (-1654) 
  • VOLUME: NYSE 743.68 (-12.53%)
  • VIX:  19.40 4.70% YTD PERFORMANCE: -17.09%
  • SPX PUT/CALL RATIO: 1.97 from 1.94 (1.55%)

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 50.10
  • 3-MONTH T-BILL YIELD: 0.05%
  • 10-Year: 1.87 from 1.84
  • YIELD CURVE: 1.65 from 1.63

MACRO DATA POINTS (Bloomberg Estimates):

 

MONTH-END – you know it, we know it – it is what it is. Today is the day where anyone can suspend disbelief that the best JAN for stocks since 1997 is going to straight line as what happens for the rest of the year. From an immediate-term TRADE overbought perspective, this looks a lot like FEB 2011 – lower long-term highs right as Growth Expectations start slowing.

  • 7:45/8:55am: Weekly retail sales
  • 8:30am: Employment Cost Index, 4Q, est. 0.4% (prior 0.3%)
  • 9:45am: Chicago Purchasing, Jan., est. 63.0 (prior 62.2)
  • 10am: Revisions: ISM’s 2012 Seasonal Adjustments
  • 10am: Consumer Confidence, Jan., est. 68.0 (prior 64.5)
  • 10am: NAPM-Milwaukee, Jan., est. 57.5 (prior 57.8)
  • 11:30am: U.S. to sell $33b 4-week bills

GOVERNMENT:

    • Republican presidential primary in Florida
    • BGOV survey showing how much it may cost U.S. companies to strengthen their computer network defenses against cyber attacks, 8am
    • U.S. presidential candidates release financial reports showing donors, funding levels, how much candidates are contributing to their campaign
    • Congressional Budget Office to release report on “The Budget and Economic Outlook,” 11am
    • Senate in session:
      • Senate Energy Committee holds hearing on the global energy outlook for 2012, 10am
      • Senate Finance Committee holds hearing on tax extenders, 10am
      • Senate Banking Committee hears from Consumer Financial Protection Bureau Director Richard Cordray, 10am
    • FAA conference committee meets, 4pm

WHAT TO WATCH: 

  • European governments moved toward a confrontation over a second rescue package for Greece even as leaders signed off on key planks of strategy to end financial crisis
  • Mitt Romney leading in polls in Florida; Newt Gingrich says he will continue race after today’s primary
  • BlackRock forecast the Fed will refrain from third round of debt purchases as economy grows
  • S&P/Case-Shiller index of property values in 20 cities may have gained 3.3% Y/y, economists est.
  • CFTC is weighing new rules and oversight of companies that use automated and high-frequency trading systems
  • Apple named Dixons CEO John Browett to lead retail business
  • Facebook IPO watch

EARNINGS:

    • CIT Group (CIT) 6am, $0.01
    • Danaher (DHR) 6am, $0.78
    • Mattel (MAT) 6am, $1.00
    • Tyco International (TYC) 6am, $0.79
    • Helmerich & Payne (HP) 6:30am, $1.16
    • L-3 (LLL) 6:30am, $2.41
    • Eli Lilly (LLY) 6:30am, $0.81
    • Archer-Daniels-Midland Co (ADM) 7am, $0.76
    • Celanese (CE) 7am, $0.56
    • Entergy (ETR) 7am, $0.89
    • Lexmark International (LXK) 7am, $1.16
    • Metro (MRU/A CN) 7am, $0.96
    • Pfizer (PFE) 7am, $0.47
    • Pentair (PNR) 7am, $0.54
    • Tellabs (TLAB) 7am, $(0.01)
    • Oshkosh (OSK) 7am, $0.34
    • United States Steel (X) 7:05am, $(0.86)
    • McGraw-Hill Cos /The (MHP) 7:10am, $0.57
    • Biogen Idec (BIIB) 7:15am, $1.49
    • Inergy (NRGY) 7:45am, $0.23
    • United Parcel Service (UPS) 7:45am, $1.26
    • Valero Energy (VLO) 7:45am, $(0.19)
    • Illinois Tool Works (ITW) 8am, $0.88
    • Paccar (PCAR) 8am, $0.79
    • Exxon Mobil (XOM) 8:03am, $1.98
    • Avery Dennison (AVY) 8:30am, $0.46
    • Potlatch (PCH) 8:30am, $0.13
    • Imperial Oil Ltd (IMO CN) 9am, $0.92
    • JDA Software Group (JDAS) 4pm, $0.63
    • Plantronics (PLT) 4pm, $0.68
    • WR Berkley (WRB) 4pm, $0.47
    • Illumina (ILMN) 4:01pm, $0.34
    • Seagate Technology (STX) 4:01pm, $1.09
    • Amazon.com (AMZN) 4:05pm, $0.17
    • Broadcom (BRCM) 4:05pm, $0.65
    • Ace Ltd. (ACE) 4:05pm, $1.77
    • Aflac (AFL) 4:06pm, $1.51
    • Arthur J Gallagher & Co (AJG) 4:11pm, $0.33
    • CH Robinson Worldwide (CHRW) 4:15pm, $0.68
    • Boston Properties (BXP) 5:15pm, $1.19
    • Suncor Energy (SU CN) 10pm, C$0.89

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

 

COMMODITIES – anyone long inflation has to be right fired up again this morning (We are – bought Energy yesterday); the Bernank Tax is obviously very bad for the country/economy, but great for commodity longs – Gold and Copper have gone vertical since the FOMC statement, up +11.4% and +12.5% for JAN respectively!

  • Silver Powering 20 Million Homes as Glut Subsides: Commodities
  • Gold Climbs to Seven-Week High in Best Start to Year Since 1980
  • Wheat Rises as Cold Weather in Europe May Harm Winter Crops
  • Oil Heads for Monthly Gain on Europe Optimism, Iran Tension
  • Copper Rises, Heads for Best Start to a Year Since at Least 1987
  • Cocoa Rebounds as Dry Weather May Hurt Crops, Sugar Advances
  • Iron Ore Set for Worst Month Since October on Slowdown Concerns
  • Outokumpu Agrees to Buy ThyssenKrupp’s Stainless Steel Unit
  • Myanmar Rice Shipments May Double This Year, Group Predicts
  • Korea Gas to Buy U.S. LNG as Gas Slump Attracts Asian Importers
  • Cocoa May Climb to 1,668 Pounds on Fibonacci: Technical Analysis
  • Oil Supplies Rise in Survey as Fuel Output Falls: Energy Markets
  • ADM Second-Quarter Profit Misses Estimates After Corn Costs Rise
  • COMMODITIES DAYBOOK: Oil Gains as Japan Industrial Output Rises
  • Coal-Carrier Rates Seen at Decade-Low as Glut Expands: Freight

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CURRENCIES


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EUROPEAN MARKETS


GERMANY - Contrast of The Day: Italy's unemployment rate hits an 8 year high of 8.9% as Germany's hits 20 year low of 6.7% - the Germans are absolutely killing it right now – gaining big political power, seeing a +10.2% YTD stock market move, and unemployment fall #winning.


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ASIAN MARKETS


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MIDDLE EAST


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The Hedgeye Macro Team