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
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
CURRENCIES
EUROPEAN MARKETS
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.
MIDDLE EAST
The Hedgeye Macro Team