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TODAY’S S&P 500 SET-UP – February 6, 2012

As we look at today’s set up for the S&P 500, the range is 26 points or -1.78% downside to 1321 and 0.16% upside to 1347. 

 

SECTOR AND GLOBAL PERFORMANCE

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EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: 1713 (1303) 
  • VOLUME: NYSE 905.31 (11.71%)
  • VIX:  17.10 -4.89% YTD PERFORMANCE: -26.92%
  • SPX PUT/CALL RATIO: 1.29 from 1.99 (35.18%)

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 45.58
  • 3-MONTH T-BILL YIELD: 0.07%
  • 10-Year: 1.92 from 1.92
  • YIELD CURVE: 1.69 from 1.69

MACRO DATA POINTS (Bloomberg Estimates):

  • 8:55am: St. Louis Fed President James Bullard speaks on inflation targeting in Chicago; media Q&A
  • 11am: Export inspections: corn, soybeans, wheat
  • 11:30am: U.S. to sell $33b 3-month, $31b 6-month bills
  • 12:15pm: Dallas Fed President Richard Fisher speaks at Institute of International Finance on economy, monetary outlook
  • 12:15pm: IMF’s Olivier Blanchard speaks on global outlook at Carnegie Endowment for International Peace

GOVERNMENT:

  • VP Joe Biden speaks at Florida State University on tuition
  • 11am: House Majority Leader Eric Cantor, R-Va.; House Majority Whip Kevin McCarthy, R-Calif.; speak on economic growth, job creation at YG Network event
  • Congress:
    • House Rules Committee meets on line-item veto, budget transparency, 5pm

WHAT TO WATCH: 

  • Greek PM Lucas Papademos, party leaders agreed to spending cuts this year equal to 1.5% of GDP
  • Micron Technology CEO Steve Appleton’s death may delay DRAM industry consolidation
  • States must decide by today on proposed $25b nationwide settlement over foreclosure practices; some balking on bank liability releases
  • Lawmakers in the European Parliament’s economic and monetary affairs committee will discuss proposals to toughen rules against insider trading
  • PepsiCo said to seek to recruit former Wal-Mart executive Brian Cornell for key job
  • Great Atlantic and Pacific Tea Co. reorganization plan set for approval at confirmation hearing
  • AMR’s American Airlines may try to buy rival after leaving Chapter 11, CEO Tom Horton said
  • HTC forecast lower 1Q rev. that trails est.
  • U.S. will work with allies to put “immense pressure” on Syrian President Bashar al-Assad to step down after Russia vetoed resolution seeking to end fighting
  • Mitt Romney wins Nevada caucuses; Gingrich vows to press on

     EARNINGS:

    • CNA Financial (CNA) 6am, $0.70
    • Humana (HUM) 6am, $1.21
    • Loews (L) 6am, $0.90
    • Towers Watson & Co (TW) 6am, $1.20
    • Hasbro (HAS) 6:30am, $1.05
    • Nielsen Holdings (NLSN) 6:30am, $0.49
    • Lazard Ltd (LAZ) 7am, $0.38
    • HCA Holdings (HCA) 8am, $0.76
    • Sysco (SYY) 8am, $0.44
    • UDR (UDR) 8am, $0.34
    • National Retail Properties (NNN) 8:30am, $0.40
    • USG (USG) 8:30am, $(0.72)
    • NCR (NCR) 4pm, $0.56
    • Torchmark (TMK) 4pm, $1.24
    • Unum Group (UNM) 4pm, $0.75
    • Veeco Instruments (VECO) 4pm, $0.65
    • American Capital (AGNC) 4:01pm, $1.16
    • Anadarko Petroleum (APC) 4:01pm, $0.63
    • Coinstar (CSTR) 4:01pm, $0.65
    • Yum! Brands (YUM) 4:02pm, $0.74
    • Amylin Pharmaceuticals (AMLN) 4:05pm, $(4.23)
    • Leggett & Platt (LEG) 4:05pm, $0.21
    • PMC-Sierra (PMCS) 4:05pm, $0.13
    • PartnerRe (PRE) 4:05pm, $(2.09)
    • Dun & Bradstree (DNB) 4:15pm, $2.11
    • BRE Properties (BRE) 4:30pm, $0.56
    • Pioneer Natural Resources Co (PXD) 4:30pm, $1.04

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)


GOLD – down another -1.2% this morning after getting beat up a bit on Friday. We should remind people that what goes straight up will eventually come down, but Gold is a buy on red provided that UST Yields remain in a Bearish Formation (10s = 1.91% this morning, continuing to signal that US Growth Slowing in FEB vs JAN is the call to make). Gold’s immediate-term TRADE support = $1685. We’ll buy that and UST bonds on weakness.

  • Speculators Raised Bullish Wagers to 12-Week High: Commodities
  • Gold Declines in London as Stronger Dollar Cuts Investor Demand
  • Crude Declines on Greece Concern; Brent Crude Premium Widens
  • Copper Falls as Euro-Region Debt Crisis May Sap Chinese Growth
  • Wheat Gains on Concern Low Temperatures Damaged European Crops
  • Coffee Falls as Brazil’s Output Seen Increasing 17%; Sugar Rises
  • U.K. Gas Rises to 5-Year High as Cold, Exports Sap Storage
  • Aramco Cuts Most Asia Premiums; Iran Inspected: Persian Gulf Oil
  • Naphtha Crack Rebounds; Gunvor Buys Fuel Cargoes: Oil Products
  • Iran Crude Ban Difficult Without India, China: Chart of the Day
  • Hedge Funds Bullish on Gas Before Rally Fizzles: Energy Markets
  • Noble Names Former Goldman Asia Chief Alireza as Next CEO
  • Nine U.K. Power Plants Shut: Feb. 6 Generator Report (Table)
  • Speculators’ Bullish Bets at 12-Week High
  • Iran Sanctions Bid Targets Oil, Tanker Companies to Cut Exports
  • BHP Billiton Coal Workers in Australia Vote to Resume Strikes
  • O’Malley Plans U.S. IPO After Wrong Way Bet on Petroplus: Energy

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CURRENCIES


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EUROPEAN MARKETS


FRANCE – keep an eye on the CAC because it just failed at its long-term TAIL line 3503 resistance this morning. Unlike Germany’s DAX (up +14% YTD and comfortably above long-term TAIL support of 6501), the CAC, MIB, and IBEX indices remain bearish TAILS. If they all continue to fail here and the Greek thing isn’t “news” anymore, what happens next?


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ASIAN MARKETS


CHINA – interesting, but not surprising, to see Chinese stocks fail at intermediate-term TREND resistance of 2342 on the Shanghai Comp last night; this week we’ll get inflation data out of China (Wed) and there’s a good chance its inflationary (sequentially) vs what we’d been calling Deflating The Inflation (DEC).

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MIDDLE EAST


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The Hedgeye Macro Team