THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – February 22, 2012


As we look at today’s set up for the S&P 500, the range is 13 points or -0.75% downside to 1352 and 0.20% upside to 1365. 

 

SECTOR AND GLOBAL PERFORMANCE

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EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: 8 (-424) 
  • VOLUME: NYSE 797.99 (-11.07%)
  • VIX:  18.19 2.31% YTD PERFORMANCE: -22.26%
  • SPX PUT/CALL RATIO: 1.42 from 2.31 (-38.53%)

CREDIT/ECONOMIC MARKET LOOK:


GROWTH – pick your overnight economic data point, from German PMI slowing sequentially in FEB to 50.1 vs 51 JAN to Taiwan Exports dropping -8.6% y/y in JAN, we think we’re just getting started here. What happens on the margin m/m matters most. Inflation, from these levels, slows growth.

INFLATION – Italian CPI +3.2% y/y JAN (stagflation), India CPI pops to +7.7% JAN vs 6.6% DEC, and Hong Kong CPI up to 6.1% JAN vs 5.7% DEC –these are all JAN numbers that don’t include this rip in the CRB Index, Oil, etc in FEB.

  • TED SPREAD: 42.65
  • 3-MONTH T-BILL YIELD: 0.08%
  • 10-Year: 2.05 from 2.06
  • YIELD CURVE: 1.75 from 1.76

MACRO DATA POINTS (Bloomberg Estimates):

  • 7am: MBA Mortgage, week of Feb. 17, (prior -1.0%)
  • 7:45am/8:55am: ICSC/Redbook weekly retail sales
  • 10am: Revisions: Existing Home Sales
  • 10am: Existing Home Sales, Jan., est. 4.66m (prior 4.61m)
  • 11:30am: U.S. to sell $40b 4-week bills
  • 1pm: U.S. to sell $35b 5-yr notes
  • 4:30pm: API inventories

GOVERNMENT/POLITICS:

    • Quinnipiac University holds news conference on national poll on 2012 GOP contenders, presidential matchups, 10am
    • Republican presidential candidates face off in Mesa, Ariz. in debate sponsored by CNN, 8pm
    • House, Senate not in session

WHAT TO WATCH: 

  • Obama administration said to propose today to cut U.S. corporate tax rate to 28% from 35%
  • Sales of previously owned U.S. houses may have climbed 1.1% in Jan. to highest level since May 2010, economists est.
  • J&J picked Alex Gorsky to be new CEO
  • SAP said to partner with Samsung to push corporate use of Google’s Android
  • U.S. Consumer Financial Protection Bureau starting inquiry into bank checking account overdraft policies
  • Peugeot says in alliance talks after report of GM discussions
  • European services and manufacturing output unexpectedly shrank in February
  • France Telecom cut its dividend forecast
  • Goldman Sachs cut its 12-month forecast for commodity returns to 12% from 15%
  • Shell bids $1.6b for African oil explorer Cove Energy
  • Pimco said to be quitting American Securitization Forum over silence on foreclosure settlement
  • Solyndra begins piecemeal auction after failing to attract bids for whole company

 EARNINGS:

    • Donaldson (DCI) 6am, $0.71
    • Lamar Advertising (LAMR) 6am, $0.00
    • Quanta Services (PWR) 6am, $0.36
    • RR Donnelley (RRD) 6:30am, $0.43
    • Rogers Communications (RCI/B CN) 6:45am, C$0.65
    • Chico’s FAS (CHS) 6:55am, $0.11
    • El Paso Electric (EE) 7am, $0.19
    • AGL Resources (GAS) 7am, $0.93
    • Windstream (WIN) 7am, $0.20
    • Dollar Tree (DLTR) 7:31am, $1.58
    • Canadian Utilities (CU CN) 8:07am, C$0.95
    • TJX Cos (TJX) 8:22am, $0.63
    • MGM Resorts International (MGM) 8:30am, $(0.20)
    • Washington Post (WPO) 8:30am, N/A
    • Eaton Vance (EV) 9am, $0.43
    • Analog Devices (ADI) 4pm, $0.48
    • Equity One (EQY) 4pm, $0.28
    • Whiting Petroleum (WLL) 4:00pm, $0.97
    • Express Scripts (ESRX) 4:01pm, $0.85
    • Jack in the Box (JACK) 4:01pm, $0.25
    • Williams Cos (WMB) 4:01pm, $0.41
    • Williams Partners LP (WPZ) 4:01pm, $0.98
    • Fluor (FLR) 4:05pm, $0.82
    • Hewlett-Packard (HPQ) 4:05pm, $0.87
    • QEP Resources (QEP) 4:05pm, $0.45
    • Flowserve (FLS) 4:09pm, $2.29
    • Boston Beer (SAM) 4:15pm, $1.10
    • Hertz Global Holdings (HTZ) 4:18pm, $0.20
    • Yamana Gold (YRI CN) 4:28pm, $0.24
    • Concho Resources (CXO) 4:30pm, $1.18
    • Ltd Brands (LTD) 4:30pm, $1.46
    • Continental Resources (CLR) 4:34pm, $0.78
    • Liberty Global (LBTYA) 5:00pm, $0.16

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • Record Nickel Supply Expanding Glut Thwarts Rally: Commodities
  • Goldman Lowers Commodity Return Forecast, Stays Overweight
  • Copper Falls as Chinese, European Manufacturing Keeps Shrinking
  • Crude Oil Falls From Nine-Month High on Signs of Europe Slowdown
  • Russia Seeks ‘Foothold’ in Asian Wheat Market to Rival U.S.
  • Cocoa Climbs in London After Gains in New York; Sugar Advances
  • Soybeans Decline as Rainfall in Argentina May Improve Crops
  • Gold May Decline as Rally to Two-Week High Spurs Investor Sales
  • BHP Billiton’s $5.25 Billion Bond Offer Leads New-Issue Revival
  • Rubber Climbs to 5-Month High on Declining Supply, Greek Bailout
  • Investor Rogers Compares Myanmar Reforms to China’s Opening
  • Seaway Seen Sending Oil Supply to 5-Month High: Energy Markets
  • Obama, Bush and Reagan Show Threat to Gold Run: Chart of the Day
  • Spring Lambing in U.K. Turns Deadly as Schmallenberg Kills Young
  • Russia to Keep Exporting Grain to Iran Unless UN Imposes Ban
  • Shell Bids $1.6 Billion for African Oil Explorer Cove Energy
  • Risk of Oil-Price Surge Rising on Supply, Goldman Sachs Says

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CURRENCIES


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EUROPEAN MARKETS


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ASIAN MARKETS


YEN – complete meltdown on our immediate-term TRADE duration with the Japanese Yen in free-fall, accelerating to the downside this morning to 80.16 vs USD. At the same time, short-term UST’s are spiking above our TREND line of 0.26% and 10s are above the critical 2.03% line this morning. Big sovereign debt maturity spike in Japan in March.

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MIDDLE EAST


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The Hedgeye Macro Team