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TODAY’S S&P 500 SET-UP – February 21, 2012


As we look at today’s set up for the S&P 500, the range is 13 points or -0.82% downside to 1350 and 0.13% upside to 1363. 

 

SECTOR AND GLOBAL PERFORMANCE

THE HEDGEYE DAILY OUTLOOK - one

THE HEDGEYE DAILY OUTLOOK - two

THE HEDGEYE DAILY OUTLOOK - three

 

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: 432 (-1109) 
  • VOLUME: NYSE 897.31 (11.36%)
  • VIX:  17.78 -7.49% YTD PERFORMANCE: -24.02%
  • SPX PUT/CALL RATIO: 2.31 from 1.45 (59.31%)

CREDIT/ECONOMIC MARKET LOOK:


10yr YIELD – this is the 2nd time this year that we’ve seen an intraday test of our 2.03% intermediate-term TREND line for 10yr Treasury yields. A sustained close > than this line could tip flows from bonds to stocks. But we need to see this confirm for at least 3 weeks in a row, not 6 hours. 

  • TED SPREAD: 41.68
  • 3-MONTH T-BILL YIELD: 0.08%
  • 10-Year: 2.03 from 2.00
  • YIELD CURVE: 1.74 from 1.71 

MACRO DATA POINTS (Bloomberg Estimates):

  • 8:30am: Chicago Fed, Jan., est. 0.22 (prior 0.17)
  • 11am: Export inspections: corn, soybeans, wheat
  • 11:30am: U.S. to sell $33b 3-mo., $31b 6-mo. bills
  • 1pm: U.S. to sell $35b 2-yr notes 

GOVERNMENT:

    • IAEA Inspectors return to Iran, Feb. 21-22
    • House, Senate not in session 

WHAT TO WATCH: 

  • Greece won a second bailout after European governments wrung concessions from private investors; European finance ministers approved $173b in aid
  • Japanese billionaire Kazuo Okada, forced to sell stake in Wynn Resorts at discount, pledged to fight to protect his investment
  • URS Corp. agreed to buy Flint Energy Services for C$1.25b
  • Misys received rival bid from Vista Equity Partners, challenging previous agreement with Temenos
  • TNT Express, in talks with UPS on takeover bid, said it plans to refocus operations in Europe
  • FDA hosts media briefing on progress on drug shortages, noon
  • China Telecom becomes second carrier in China to offer iPhone
  • Barnes & Noble may give update on plans for its Nook e- reader unit when it reports 3Q results today
  • Alibaba 4Q net income trails est.
  • No U.S. IPOs scheduled: Bloomberg data 

EARNINGS:

    • Medco Health Solutions (MHS) 5:55 a.m., $1.17
    • Dollar Thrifty Automotive Group (DTG) 6 a.m., $0.75
    • Home Depot (HD) 6 a.m., $0.42
    • Mylan (MYL) 6 a.m., $0.50
    • Kraft Foods (KFT) 6:30 a.m., $0.57
    • Rockwood Holdings (ROC) 6:30 a.m., $0.79
    • Cracker Barrel Old Country Store (CBRL) 7 a.m., $1.14
    • Dana Holding (DAN) 7 a.m., $0.38
    • Wal-Mart Stores (WMT) 7 a.m., $1.45
    • RadioShack (RSH) 7 a.m., $0.12
    • Medtronic (MDT) 7:15 a.m., $0.84
    • Clear Channel Outdoor Holdings (CCO) 8 a.m., $0.10
    • Macy’s (M) 8 a.m., $1.65
    • Saks (SKS) 8 a.m., $0.14
    • Barnes & Noble (BKS) 8:30 a.m., $0.92
    • Genuine Parts Co (GPC) 8:33 a.m., $0.83
    • Expeditors International (EXPD) 9 a.m., $0.47
    • Intuit (INTU) 4 p.m., $0.45
    • Nabors Industries Ltd (NBR) 4 p.m., $0.50
    • Chesapeake Energy (CHK) 4:01 p.m., $0.59
    • Dell (DELL) 4:01 p.m., $0.52
    • Brocade Communications Systems (BRCD) 4:04 p.m., $0.13
    • Newfield Exploration Co (NFX) 4:04 p.m., $1.02
    • HCC Insurance Holdings (HCC) 5 p.m., $0.67
    • Range Resources (RRC) 5:06 p.m., $0.30

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)


OIL – never in the history of Global Consumption has $100 handle per barrel (pick your flavor) not slowed Consumption. On the margin is where discretionary consumption matters and if we push toward $5 at the pump, we think you’ll see this time is not different. After being long Consumer Discretionary (XLY) for most of December-January (on Strong Dollar = Strong Consumption), we shorted it on Friday. 

  • Record Rice Crop Boosting Stockpiles to Decade High
  • Oil Trades Near Nine-Month High as Europe Reaches Greek Aid Deal
  • Copper Gains for a Second Day as Greece Wins Another Bailout
  • Commodities Rally to Highest in More Than Six Months on Greece
  • Soybeans Gain on Dry Weather in South America, China’s Purchase
  • Gold Imports by India Seen Declining From Record on Prices
  • Australia Seen Gaining Asian Wheat Market Share From U.S.
  • Robusta Coffee Falls as Vietnam Sales May Advance; Cocoa Rises
  • Gold May Gain a 2nd Day as Commodities Climb on Greece Bailout
  • Copper Imports by China Decline for First Time in Eight Months
  • Coal to India Beating China on Supply Shortfall: Energy Markets
  • BP’s Maple Bonds Expose Drought Carney Frets: Canada Credit
  • Russia Has Enough Grain to Continue Exports, Minister Says
  • Raw Materials Rally as Greece Wins Bailout
  • Oil Profits Slide Fastest Since Lehman Collapse on Gas: Energy
  • Billionaire Fredriksen Sees Golar LNG Rates Surging: Freight 

THE HEDGEYE DAILY OUTLOOK - four

CURRENCIES


THE HEDGEYE DAILY OUTLOOK - five

EUROPEAN MARKETS


FRANCE – now that we have a +18% German DAX rally (YTD) out of the way (Greece was +23% at its YTD peak), we can focus on separating the weak parts of European growth from the strong (Germany). France’s CAC40 fails to breakout above its long-term TAIL of 3565 resistance again. Growth Slowing in France is a major problem – so is Hollande’s continued momentum in the polls vs Sarkozy.


THE HEDGEYE DAILY OUTLOOK - six

 

ASIAN MARKETS

THE HEDGEYE DAILY OUTLOOK - seven

 

 

MIDDLE EAST


THE HEDGEYE DAILY OUTLOOK - eight

The Hedgeye Macro Team