THE HEDGEYE DAILY OUTLOOK


TODAY’S S&P 500 SET-UP – February 1, 2012


As we look at today’s set up for the S&P 500, the range is 15 points or -0.34% downside to 1308 and 0.81% upside to 1323. 

 

SECTOR AND GLOBAL PERFORMANCE

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EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: 517 (-1314) 
  • VOLUME: NYSE 1034.20 (39.07%)
  • VIX:  19.44 0.21% YTD PERFORMANCE: -16.92%
  • SPX PUT/CALL RATIO: 1.56 from 1.97 (-20.81%)

CREDIT/ECONOMIC MARKET LOOK:


TREASURIES – kaboom! U.S. Growth expectations are getting hammered into the hole now with 10yr yields hitting YTD lows this morning at 1.81%. A lot of people will convince themselves that U.S.  stock futures up is whatever they want it to be, but we see that simply as inflation expectations rising which, in turn, slow growth even further. The Yield Spread hitting its lowest YTD at 161bps wide – should put a lid on the Financials at $XLF 14.24.

  • TED SPREAD: 49.15
  • 3-MONTH T-BILL YIELD: 0.05%
  • 10-Year: 1.82 from 1.80
  • YIELD CURVE: 1.61 from 1.58

MACRO DATA POINTS (Bloomberg Estimates):

  • 7am: MBA Mortgage Apps, week of Jan. 27 (prior -5.0%)
  • 8am: NAPM Milwaukee, est. 57.5 (prior 57.8)
  • 8:15am: ADP Employment, Jan., est. 182k (prior 325k)
  • 8:30am: Fed’s Plosser speaks on economy in Gladwyne, Pa.
  • 10am: Construction Spending (M/m), Dec., est. 0.5% (prior 1.2%)
  • 10am: ISM Man., Jan., est. 54.5 (prior, revised 53.1)
  • 10:30am: DoE inventories

GOVERNMENT:

  • Obama speaks on economy in Falls Church, Va., talk about ways to revive housing market, 11am
  • Mitt Romney, Newt Gingrich attend campaign events in Nevada, site of Republican presidential caucuses on Feb. 4
  • Democrats retain House seat in special House election
  • Treasury issues Quarterly Refunding statement, 10am
  • FCC holds forum on distributed antenna systems, 9:30am
  • House, Senate in session:
    • House Oversight and Government Reform Committee holds hearing on President Barack Obama’s recess appointments, 9:30am
    • House-Senate Conference Committee meets on H.R.3630, the Temporary Payroll Tax Cut Continuation Act, 10am
    • House Budget Committee holds hearing on CBO outlook, 10am
    • Senate Budget committee holds hearing on Eurozone outlook, 10am
    • Senate Small Business and Entrepreneurship Committee holds hearing on entrepreneurship, with start-up executives, 10am
    • House Small Business Committee holds hearing on small business job creation, with Gallup Chief Economist Dennis Jacobe, 1pm
    • House Rules Committee meets to formulate rule on H.R.3578, the Baseline Reform Act of 2011; and H.R.3582, the Pro- Growth Budgeting Act of 2011, 3pm
    • SEC holds meeting on regulations affecting small, emerging companies under federal securities laws, 10am

WHAT TO WATCH: 

  • Facebook said to pick Morgan Stanley to lead planned IPO, file plans with regulators today to raise ~$5b or more
  • EU regulators vetoed Deutsche Boerse, NYSE Euronext plan to create the world’s biggest exchange after concluding deal would hurt competition
  • Greek bondholders said set to get GDP sweetener in debt swap
  • Jan. manufacturing may rise to 54.5, highest since June, economists est.
  • Mitt Romney won Florida’s Republican primary, Newt Gingrich second by 14 points
  • Sony named Kazuo Hirai as CEO, replacing Howard Stringer, who will become chairman
  • United Steelworkers union, Royal Dutch Shell reach tentative 3-yr contract, averting potential strike that would have idled as many as 69 refineries
  • U.S. automakers report Jan. sales
  • AMR poised to start labor talks with 10k job cuts possible
  • MF Global lowered European risk in Aug., risk officer says
  • Ex-Credit Suisse workers said to face charges over CDO pricing
  • U.S. regulators weigh Volcker exemption for sovereign debt
  • Chinese purchasing managers index increased to 50.5 in Jan. from 50.3 in Dec., beating est.

EARNINGS:

    • Aetna (AET) 6am, $0.97
    • Enterprise Products Partners (EPD) 6am, $0.55
    • Thermo Fisher Scientific (TMO) 6am, $1.15
    • Whirlpool (WHR) 6am, $2.09
    • Navistar International (NAV) 6am, $0.27
    • NiSource (NI) 6:30am, $0.37
    • CGI Group (GIB/A CN) 6:30am, C$0.40
    • AOL (AOL) 7am, $0.32
    • Energizer Holdings (ENR) 7am, $1.93
    • Hershey (HSY) 7am, $0.70
    • NASDAQ OMX Group (NDAQ) 7am, $0.61
    • Tupperware Brands (TUP) 7am, $1.53
    • Northrop Grumman (NOC) 7:01am, $1.67
    • Marathon Petroleum (MPC) 7:05am, $(0.05)
    • IAC/InterActive (IACI) 7:30am, $0.54
    • Corinthian Colleges (COCO) 7:45am, $0.01
    • Arrow Electronics (ARW) 8am, $1.30
    • Franklin Resources (BEN) 8:29am, $2.09
    • Marathon Oil (MRO) 8:31am, $0.83
    • Chipotle Mexican Grill (CMG) 4pm, $1.83
    • Green Mountain Coffee Roasters (GMCR) 4pm, $0.36
    • Hain Celestial Group (HAIN) 4pm, $0.49
    • Las Vegas Sands (LVS) 4pm, $0.57
    • Qualcomm (QCOM) 4pm, $0.90
    • Canadian Oil Sands Ltd (COS CN) 4pm, $0.45
    • Ameriprise Financial (AMP) 4:01pm, $1.40
    • AvalonBay Communities (AVB) 4:01pm, $1.22
    • Electronic Arts (EA) 4:01pm, $0.93
    • Tractor Supply Co (TSCO) 4:01pm, $0.93
    • Fortune Brands Home & Security (FBHS) 4:04pm, $0.15
    • JDS Uniphase (JDSU) 4:04pm, $0.10
    • Allstate (ALL) 4:05pm, $0.96
    • BMC Software (BMC) 4:05pm, $0.82
    • CACI International (CACI) 4:05pm, $1.30
    • Assurant (AIZ) 4:15pm, $1.37
    • Equity Residential (EQR) 4:15pm, $0.65
    • Crown Holdings (CCK) 5:01pm, $0.47
    • Tesoro (TSO) 5:30pm, $(0.66)

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • Steel Slows With Europe Setting Back ArcelorMittal: Commodities
  • Wheat Rises in Chicago, Paris as Russia May Start to Tax Exports
  • Oil Rises First Time in Four Days on Signs of Growth in China
  • Copper Rises as Stronger Manufacturing Bolsters Demand Prospects
  • Gold Climbs to Eight-Week High as Debt Concern Spurs Investment
  • Cocoa Rises as Bean Sales May Leave Prices Unhurt; Coffee Drops
  • Indian Exchange to Start Platinum Trading as Demand to Gain
  • Rice May Extend Decline as Supply Increases, FAO Forecasts
  • Rubber Gains for Second Day as Thai Purchase Plan Cuts Supplies
  • Smithfield Goes Whole Hog to Trim Borrowing: Corporate Finance
  • Louis-Dreyfus Widow Chairman Ousts Men Running Commodities Giant
  • Record Bunker Fuel Charges Sink Shipping Profits: Energy Markets
  • Noble Said to Approach Banks for About $2 Billion Loan Facility
  • Crude Advances on China Manufacturing Data
  • Indonesian Commodity Exchange Starts Physical Tin Contract
  • Rubber Output From Major Growers May Rise at Slower Pace
  • Aluminum Surplus May Plunge to Lowest in 5 Years, Sumitomo Says

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CURRENCIES


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EUROPEAN MARKETS


GERMANY – just absolutely ripping this morning on a big breakout above my long-term TAIL line for the DAX of 6503. Germany’s stock market is now up +11.7% YTD! (vs SPX +4.3%) as the old Bundesbankers prove out that there is an economic model that resides right of left-center (Keynes).


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ASIAN MARKETS


CHINA – immediate-term growth expectations are coming down in a hurry now that commodity inflation expectations are rising – last night’s PMI print of 50.5 was not only a miss vs uninformed whispers (sad), but was a sequential deceleration in the slope of improvement (hard to beat the DEC v-bottom vs NOV). Chinese stocks closed down -1.1% on the news, and they should have.

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MIDDLE EAST


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The Hedgeye Macro Team