THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – February 10, 2012


As we look at today’s set up for the S&P 500, the range is 26 points or -1.33% downside to 1334 and 0.60% upside to 1360. 

 

SECTOR AND GLOBAL PERFORMANCE

 

THE HEDGEYE DAILY OUTLOOK - 1

 

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EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: 36 (-444) 
  • VOLUME: NYSE 759.18 (-0.81%)
  • VIX:  18.63 2.59% YTD PERFORMANCE: -20.38%
  • SPX PUT/CALL RATIO: 1.54 from 1.40 (10.00%)

CREDIT/ECONOMIC MARKET LOOK:


10-year UST – markets tend to push the Pain Trade to its highest pressure points and then put the pain on those who chased. The 10-year yield ripped yesterday all the way up to our 2.03% (intermediate-term TREND line), and then reversed (2.00% this morning and falling). If we’re right and Global Growth slows sequentially as inflation rises here in FEB, we want to be long the long-bond.

  • TED SPREAD: 42.36
  • 3-MONTH T-BILL YIELD: 0.09%
  • 10-Year: 1.98 from 2.04
  • YIELD CURVE: 1.73 from 1.78

MACRO DATA POINTS (Bloomberg Estimates):

  • 8:30am, Trade Balance, Dec., est. -$48.5b (prior -$47.8b)
  • 9:55am, UMich consumer confidence, Feb., P, est. 74.8 (prior 75)
  • 12:30pm, Fed’s Bernanke speaks on housing in Orlando
  • 12:50pm, Fed’s Pianalto speaks on housing in Cleveland
  • 1pm: Baker Hughes rig count
  • 2pm, Monthly Budget, Jan., est. -$34b (prior -$49.8b)

GOVERNMENT/POLITICS:

    • President Obama to sign Ultralight Aircraft Smuggling Prevention Act, joined by former Rep. Gabrielle Giffords
    • Mitt Romney, Rick Santorum, Newt Gingrich speak at American Conservative Union’s CPAC ’12 conference, 10am. AFL-CIO holds counter-demonstration, noon
    • Romney holds town hall meeting in Portland, Maine, on eve of state’s Republican caucuses, 5:15pm
    • House, Senate not in session

WHAT TO WATCH: 

  • German Finance Minister Wolfgang Schaeuble said to have told lawmakers in Berlin that Greece will miss its debt-cutting targets
  • U.S. trade deficit may have widened in Dec. to $48.5b from $47.8b previous month: economists
  • P&G said to have decided it will seek to end sale of its Pringles snack business to Diamond Foods
  • IEA cut its 2012 global oil demand forecast for sixth month as a “darkening” economic outlook reduced prospects for global growth
  • Alcatel-Lucent rose after 4Q results; will offer access to patents through licensing syndicate
  • Barclays said it may miss profitability target set by CEO a year ago
  • Micron Techology holds analyst meeting days after CEO Steve Appleton died
  • Google said to be developing home-entertainment system, WSJ says

 EARNINGS:

    • Calpine (CPN) 6 a.m., $0.04
    • Alliant Energy (LNT) 6 a.m., $0.56
    • Laboratory of America Holdings (LH) 6:45 a.m., $1.53
    • PPL (PPL) 6:58 a.m., $0.61
    • Apollo Global Management LLC (APO) 7 a.m., $1.39
    • Buckeye Partners (BPL) 7 a.m., $0.84
    • Brookfield Office Properties (BPO CN) 7 a.m., $0.25
    • AllianceBernstein Holding (AB) 7:15 a.m., $0.19
    • Flir Systems (FLIR) 7:30 a.m., $0.45
    • Arch Coal (ACI) 7:45 a.m., $0.32
    • Telus (T CN) 8 a.m., C$0.79
    • Emera (EMA CN) 9:48 a.m., C$0.35
    • IGM Financial (IGM CN) 10:35 a.m., C$0.76

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • Copper Traders Turn Bullish as Economy Spurs Demand: Commodities
  • Oil Falls From Three-Week High as Greece Counters U.S. Economy
  • Gold Falls a Third Day in London as Commodities Drop on Greece
  • Copper Cuts Fifth Weekly Gain on Record Shanghai Stockpiles
  • De Beers Sales Increase 27% on Higher Diamond Demand, Prices
  • Palm Oil Declines as Malaysian Reserves Fall Less Than Forecast
  • China January Copper Imports Fall From Record; Scrap Slumps
  • Palm Oil Inventories in Malaysia Decline to Five-Month Low
  • Contango in Gas Is Sell Signal for SocGen, Citi: Energy Markets
  • Australia’s Floods May Boost 2012-2013 Cotton Output to Record
  • South Africa to Lure Miners With $40 Billion Boost For Railways
  • Bumi’s Largest Shareholders ‘Confident’ of Ousting Rothschild
  • Chocolate Makers In Love With Valentine Sales: Chart of the Day
  • Copper Traders Bullish on Global Growth
  • IEA Cuts 2012 Oil Demand Forecast on ‘Darkening’ Growth
  • Wheat Set for First Weekly Drop in Four on Record Global Stocks
  • Coffee Rises as Roasters May Tap European Stocks; Cocoa Falls

THE HEDGEYE DAILY OUTLOOK - 4

 

 

CURRENCIES


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EUROPEAN MARKETS


FRANCE – we’re short French Equities for the 1st time since late December for 3 reasons: 1. Growth data slowing as inflation data rising 2. CAC failed at its long-term TAIL of 3565 resistance and 3. EUR/USD is bumping up against a wall of resistance at 1.33 (highly correlated to the CAC). European stocks should stop trading on Greek “news” as the economic gravity of the French slowdown becomes more glaring.


THE HEDGEYE DAILY OUTLOOK - 6

 

 

ASIAN MARKETS


CHINA – China just moved into the Top 3 Most Read on Bloomberg this morning for the first time in a while (Greece has dominated news-flow), and given China actually matters to Global Growth, this makes sense. In the last 48 hrs Chinese data did exactly what we said it was going to do: 1. Inflation accelerating sequentially to 4.5% from 4.1% y/y and 2. Growth Slowed, big time, w/ Exports down -0.5% y/y (1st y/y drop in over 2yrs).

 

THE HEDGEYE DAILY OUTLOOK - 7

 

 

MIDDLE EAST


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The Hedgeye Macro Team

 


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