Hedgeye - THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – February 16, 2012

As we look at today’s set up for the S&P 500, the range is 15 points or -0.31% downside to 1339 and 0.80% upside to 1354.

SECTOR AND GLOBAL PERFORMANCE

EQUITY SENTIMENT:

ADVANCE/DECLINE LINE: -468 (347)
VOLUME: NYSE 806.39 (8.45%)
VIX: 21.14 8.19% YTD PERFORMANCE: -9.66%
SPX PUT/CALL RATIO: 2.40 from 1.53 (56.86%)

CREDIT/ECONOMIC MARKET LOOK:

TED SPREAD: 38.83
3-MONTH T-BILL YIELD: 0.11%
10-Year: 1.91 from 1.93
YIELD CURVE: 1.65 from 1.67

MACRO DATA POINTS (Bloomberg Estimates):

8:30am: PPI, M/m, Jan., est. 0.4% (from -0.1%)
8:30am: Jobless Claims, wk of Feb. 11, est. 365k (prior 358k)
8:30am: Housing Starts, Jan., est. 675k (prior 657k)
8:30am, Building Permits, Jan., est. 680k, (prior 671k revised)
9:00am: Bernanke speaks on community banking in Arlington, Va.
9:45am: Bloomberg Consumer Comfort, week Feb. 12, est. -42.0 (prior -41.7)
10am: Philadelphia Fed., Feb., est. 9.0 (prior 7.3)
10am: 30-yr mortgage rates, Freddie Mac
10:30am: EIA natural gas storage
1pm: U.S. to sell $9b 30-yr TIPS
U.S. Treasury to announce 2-, 5-, 7-yr auction sizes

GOVERNMENT:

President Obama attends campaign events in California
Chinese Vice President Xi Jinping visits Iowa
House, Senate in session:

House Energy and Commerce Committee hears from FCC Chairman Julius Genachowski on its budget. 9am
Senate Energy Committee hears from Energy Secretary Steven Chu on the Energy Department’s 2013 budget request. 9:30am
Senate Budget Committee hears from Treasury Secretary Timothy Geithner on the president’s 2013 budget request. 10am
House Homeland Security Committee holds hearing on monitoring of social networking and media. 10am
House Appropriations subcommittee hears from Defense Secretary Leon Panetta and Joint Chiefs Chairman Martin Dempsey on the 2013 defense budget request. 10am
House Appropriations Committee hears from Interior Secretary Ken Salazar on his department’s budget request. 1:30pm
House Budget Committee hears from Treasury Secretary Timothy Geithner on the president’s budget request. 2pm
Senate Homeland Security Committee hears from Homeland Security Secretary Janet Napolitano on Cybersecurity Act. 2:30pm

WHAT TO WATCH:

Europe is set to make “all the necessary decisions” on Greece rescue on Feb. 20: Luxembourg prime minister
Morgan Stanley, UBS may be cut up to three levels by Moody’s
U.S. officials said to have intensified their focus on banks, Taiwan in insider-trading probe
Summers, Clinton said to be lead contenders for World Bank president
IAG says taking AMR stake in bankruptcy is “not on table”
Florida foreclosures climb 14% as lenders resume home seizures: RealtyTrac
House-Senate negotiators announce payroll deal completed
ABB falls as 4Q results show margin pressure
Cap Gemini reaches 6-month high on higher margin forecast

EARNINGS:

Huntsman (HUN) 6am, $0.28
Nexen (NXY CN) 6am, C$0.44
SPX (SPW) 6am, $1.75
DENTSPLY International (XRAY) 6am, $0.52
Penn West Petroleum Ltd (PWT CN) 6:30am, C$0.15
Barrick Gold (ABX CN) 7am, $1.26
Discovery Communications (DISCA) 7am, $0.69
DTE Energy (DTE) 7am, $0.80
Duke Energy (DUK) 7am, $0.22
Frontier Communications (FTR) 7am, $0.05
OGE Energy (OGE) 7am, $0.35
JM Smucker (SJM) 7am, $1.41
TRW Automotive Holdings (TRW) 7am, $1.55
VF (VFC) 7am, $2.31
DirecTV (DTV) 7:30am, $0.92
General Motors (GM) 7:30am, $0.41
Hyatt Hotels (H) 7:30am, $0.13
Health Care REIT (HCN) 7:30am, $0.90
Progress Energy (PGN) 7:30am, $0.53
Molson Coors Brewing (TAP) 7:30am, $0.70
Waste Management (WM) 7:30am, $0.60
Apache (APA) 8am, $2.87
Reliance Steel & Aluminum (RS) 8:50am, C$0.78
Finning International (FTT CN) 8:56am, $0.34
PG&E (PCG) 9:04am, $0.85
CI Financial (CIX CN) 11:17am, C$0.31
Advance Auto Parts (AAP) Pre-Mkt, $0.75
Nordstrom (JWN) 4pm, $1.10
Allscripts Healthcare (MDRX) 4pm, $0.25
DaVita (DVA) 4:01pm, $1.49
Aruba Networks (ARUN) 4:03pm, $0.15
Applied Materials (AMAT) 4:04pm, $0.12
SunPower (SPWR) 4:05pm, $(0.06)
Baidu (BIDU) 4:30pm, $5.69
EOG Resources (EOG) 4:35pm, $0.87
Fairfax Financial Holdings Ltd (FFH CN) 5:01pm, $(2.60)

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

COPPER – breaking our mo mo line of 3.88/lb support was one of the many Growth Slowing signals that had us short SPY at 1355 yesterday. This morning, copper = down -1.1% and 10yr UST yields are straight down to 1.91% as well.

Biggest Mining Deals No Promise of Xstrata Bonanza: Commodities
Oil Declines From Five-Week High After Greek Bailout Delayed
China May Become World’s Biggest Gold User, Beating India
Commodities Drop From Six-Month High on Greek Default Concern
Gold Drops as Greece Bailout Concerns Boost Demand for Dollar
Soybeans Drop as Debt-Crisis Concerns Eclipse China’s Purchases
Robusta Coffee Swings Between Gains, Losses; Cocoa Retreats
U.K. Natural Gas Contracts Decline on Lower Demand; Power Falls
U.S. Says Iran’s Nuclear Breakthrough Is ‘Hype;’ Oil Pares Gain
Spain’s Cepsa Secures Crude From U.A.E. in Case of Iran Loss
Barrick Gold Earnings Trail Estimates as Mining Costs Increase
Rising Pump Prices in China to Cut Refining Loss: Energy Markets
Impala Calls for Help to Restart World-Biggest Platinum Mine
China Seen Topping India This Year on Gold
Gold Demand Fell 2.1% in Fourth Quarter on Jewelry, WGC Says
NYSE Liffe Wants to Start Delivery Limits on London Commodities
Malaysian Palm-Oil Exports Seen Rising 10%, Paring Reserves

CURRENCIES

EUROPEAN MARKETS

SPAIN – the Spaniards are selling as much pig paper as they can (34% of their YTD needs) before someone figures out that Growth Slowing is what is going to crush their citizenry next. This morning’s debt auction finally came in at a higher yield (2015 bonds at 3.33% vs 2.86% last) and the IBEX is the 1st major European market to snap my immediate-term TRADE line of 8653 (down -2.1% leading decliners in Europe).

ASIAN MARKETS

CHINA – after seeing its 1st y/y decline in Export growth in 2yrs (JAN -0.5%), this morning the Chinese reported a y/y decline in Foreign Direct Investment of -0.3% y/y. Chinese government guys called it “grim” (see Bloomberg article) – volumes on the NYSE aren’t the only thing in the world that have slowed to a halt.

MIDDLE EAST

The Hedgeye Macro Team