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
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
CURRENCIES
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.
ASIAN MARKETS
MIDDLE EAST
The Hedgeye Macro Team
