THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – February 8, 2012


As we look at today’s set up for the S&P 500, the range is 27 points or -1.49% downside to 1327 and 0.52% upside to 1354. 

 

SECTOR AND GLOBAL PERFORMANCE

 

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EQUITY SENTIMENT:


SENTIMENT – to a degree, the Fink comment (he was bullish in Feb of last year too) summarizes a lot about where sentiment is going right now – it’s a chase. With the VIX testing 16 (the level selling Equities has paid off for 4yrs) and this morning’s II Bullish/Bearish Spread (survey) hitting its widest Bullish Spread since April of 2011, we can argue about anything in the rear-view here, but +2300 basis points wide (Bulls vs Bears) is very very wide.

  • ADVANCE/DECLINE LINE: 389 (929) 
  • VOLUME: NYSE 728.98 (6.08%)
  • VIX:  17.65 -0.62% YTD PERFORMANCE: -24.57%
  • SPX PUT/CALL RATIO: 3.12 from 1.78 (75.28%)

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 44.37
  • 3-MONTH T-BILL YIELD: 0.08%
  • 10-Year: 1.98 from 1.97
  • YIELD CURVE: 1.73 from 1.73

MACRO DATA POINTS (Bloomberg Estimates):

  • 7am: MBA Mortgage Apps, week of Feb. 3 (prior -2.9%)
  • 10:30am: DoE inventories
  • 10:40am: Fed’s Williams speaks in San Ramon, California
  • 1:00pm: U.S. to sell $24b 10-yr notes

GOVERNMENT:

  • House in session, Senate not
    • House Ways and Means Committee holds hearing on how accounting rules affect how businesses evaluate tax policy, 9am
    • House Energy and Commerce subcommittee holds hearing on cybersecurity, 9:30am
    • House Financial Services subcommittee holds hearing on proposal to remove the head of the Consumer Financial Protection Bureau from the board of the FDIC, 10am
    • House Science, Space and Technology Committee holds hearing on the recommendations of a panel assessing the nation’s nuclear future, 10am
    • House Oversight Committee holds hearing on union political contributions, 10am
    • House Financial Services subcommittee holds hearing on proposals to limit the extraterritorial effect of the Dodd-Frank law, 2pm

WHAT TO WATCH: 

  • Greek PM negotiations with party leaders continue; Athens missed another deadline to secure second aid package
  • McDonald’s releases January sales information at 7:58am; watch for commentary on food inflation. Buffalo Wild Wings the latest to say it may raise menu prices this year.
  • Caesars completed IPO that gives casino chain market value $1.13b
  • Roche says it’s disappointed by Illumina $5.7b bid rejection, open to negotiations
  • Yahoo board shakeup adds to pressure on co. to reach Asian assets sale: Susquehanna
  • Amazon.com, Viacom may announce web-video deal this week, Reuters says; watch Netflix
  • Rick Santorum beat Mitt Romney in presidential nominee contests in Missouri, Colorado, Minnesota

EARNINGS:

    • Cognizant Technology Solutions (CTSH) 6 a.m., $0.77
    • TMX Group (X CN) 6 a.m., $0.84
    • Agrium (AGU CN) 6:30 a.m., $2.02
    • Coventry Health Care (CVH) 6:30 a.m., $0.64
    • Wyndham Worldwide (WYN) 6:30 a.m., $0.44
    • Level 3 Communications (LVLT) 6:45 a.m., $(1.12)
    • Intact Financial (IFC CN) 6:55 a.m., $1.11
    • Apartment Investment & Management Co (AIV) 7 a.m., $0.41
    • CVS Caremark (CVS) 7 a.m., $0.89
    • Ingersoll-Rand (IR) 7 a.m., $0.66
    • Moody’s (MCO) 7 a.m., $0.49
    • Sprint Nextel (S) 7 a.m., $(0.38)
    • Time Warner (TWX) 7 a.m., $0.87
    • IntercontinentalExchange (ICE) 7:30 a.m., $1.69
    • Reynolds American (RAI) 7:36 a.m., $0.69
    • ProLogis (PLD) 7:51 a.m., $0.40
    • Ralph Lauren (RL) 8 a.m., $1.68
    • Computer Sciences (CSC) 8:30 a.m., $0.58
    • Groupon (GRPN) 4 p.m., $0.03
    • Akamai Technologies (AKAM) 4:01 p.m., $0.40
    • Kimco Realty (KIM) 4:01 p.m., $0.30
    • tw telecom (TWTC) 4:01 p.m., $0.10
    • Fidelity National Financial (FNF) 4:03 p.m., $0.19
    • News Corp. (NWSA) 4:03 p.m., $0.34
    • Whole Foods Market (WFM) 4:03 p.m., $0.60
    • Cisco Systems (CSCO) 4:04 p.m., $0.43
    • Ingram Micro (IM) 4:05 p.m., $0.55
    • Everest Re Group Ltd (RE) 4:05 p.m., $(0.92)
    • Visa (V) 4:05 p.m., $1.45
    • Plains All American Pipeline (PAA) 4:06 p.m., $1.50
    • Prudential Financial (PRU) 4:06 p.m., $1.76
    • Cincinnati Financial (CINF) 4:15 p.m., $0.58
    • Equifax (EFX) 4:19 p.m., $0.67
    • FMC (FMC) 4:30 p.m., $1.37
    • General Growth Properties (GGP) Post-Mkt, $0.27

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

 

OIL – ze almighty Petro Dollar makes ze world go round, eh. My oh my, Brent Oil busted a move above our long-term TAIL line of resistance this week and didn’t look back, trading $116.35/barrel this morning = +6.5% since Bernanke’s Policy to Inflate through 2014 was introduced on Jan 25. Wow. Thanking the heavens that we just sucked it up and bought Energy (XLE) and Gold (GLD). This won’t end well for the other 90% of Global Consumers.

  • Aluminum Over Copper for Cables Helps Rusal, Alcoa: Commodities       
  • Oil Rises to One-Week High After Decline in U.S. Crude Supplies               
  • Corn Rises Before USDA May Lower Estimate for World Inventories       
  • Copper Rises, Heads for 20-Week High as China Supports Housing           
  • Natural Gas Declines to Lowest in a Week Before Storage Report             
  • Ivory Coast Cocoa Shippers, Officials Agree on Industry Reforms              
  • Gold May Advance a Second Day as Weakening Dollar Spurs Demand    
  • Corn Imports by S. Korea to Rebound in 2012 as Hog Herd Recovers        
  • BHP Has M&A Capacity as Xstrata, Glencore Combine, CEO Says               
  • Encana Worst Energy Performer on Natural Gas Bet: Canada Credit        
  • EOG Channels Enron Roots While Outperforming Chesapeake: Energy  
  • Fuel Oil’s Best Quarter Seen on Refinery Work: Energy Markets               
  • China Books Supertanker to Ship Iran Crude Amid Looming Oil Ban          
  • Gold May Extend Biggest Gain in Two Weeks     
  • Sugar Gains as Surplus May Narrow on Record Demand; Cocoa Falls       
  • Wheat Price in Japan May Dip Most Since 2009, Cutting Food Costs         
  • Glencore’s Glasenberg Gets Back to His Marc Rich Trading Roots              

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CURRENCIES


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EUROPEAN MARKETS


RUSSIA – Putin loves this Dollar Down = Oil up thing (so does Fink – he wants Geithner’s job and says we need Qe3 if the “dollar gets too strong”); the Russians are running neck and neck with the Greeks with their stock markets inflating +19.5% and +20.2% respectively for 2012 YTD. We’ve seen this movie before – inflation expectations slow growth, and we expect most of those who missed that LY to disagree with us again.


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ASIAN MARKETS


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MIDDLE EAST


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The Hedgeye Macro Team