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TODAY’S S&P 500 SET-UP – February 24, 2012


As we look at today’s set up for the S&P 500, the range is 15 points or -0.69% downside to 1354 and 0.41% upside to 1369. 

 

SECTOR AND GLOBAL PERFORMANCE

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EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: 1314 (-1906) 
  • VOLUME: NYSE 763.09 (4.67%)
  • VIX:  16.80 -7.64% YTD PERFORMANCE: -28.21%
  • SPX PUT/CALL RATIO: 2.12 from 2.15 (-1.40%)

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 40.42
  • 3-MONTH T-BILL YIELD: 0.09%
  • 10-Year: 2.00 from 2.00
  • YIELD CURVE: 1.70 from 1.70 

MACRO DATA POINTS (Bloomberg Estimates):

  • 9:55am: UMichigan Consumer, Feb (F), est. 73 (prior 72.5)
  • 10:00am: New Home Sales, Jan., est. 315k, up 2.6% (prior 307k)
  • 10:45am: Fed’s Williams speaks in New York
  • 11:35am: Fed’s Bullard speaks on housing, monetary policy in New York
  • 1pm: Baker Hughes rig count
  • 1:30pm: Fed’s Plosser, Dudley speak on monetary policy in New York 

GOVERNMENT:

    • President Obama meets with Danish PM Helle Thorning-Schmidt to discuss European debt crisis in Chicago
    • U.S. Dept of Agriculture discusses crop outlook
    • Mitt Romney addresses Detroit Economic Club, 11:30am
    • House, Senate meet in pro forma sessions
    • NRC advisory panel meets to consider NextEra Energy Inc.’s Turkey Point extended power application, 8:30am
    • FCC meets on provisions of National Broadband plan, 9am    

WHAT TO WATCH: 

  • Apollo Global, others said to be near deal to acquire El Paso’s oil-exploration business for about $7b
  • Purchases of new homes in U.S. probably rose 2.6% in January to a nine-month high, economists est.
  • Bank of America is stopping sale of new home loans to Fannie Mae
  • Wynn Resorts’s Macau unit ejected Kazuo Okada from its board; Phillipine President Aquino orders probe
  • Lloyds posted full-year net loss that missed est.; Volkswagen reported record profit
  • U.K. GDP shrank 0.2% in 4Q, in line with forecast
  • Apple said to buy search startup Chomp for $50m
  • Watch Watson Pharma; last business day before Feb. 26 PDUFA decision date on Prochieve for prevention of preterm labor
  • G-20 finance ministers, central bank presidents to meet in Mexico City this weekend
  • Warren Buffett to release annual letter to Berkshire Hathaway shareholders tomorrow 

EARNINGS

    • Enerplus (ERF CN) 6 a.m., C$0.23
    • Alpha Natural Resources (ANR) 7 a.m., $0.26
    • Endo Pharmaceuticals Holdings (ENDP) 7 a.m., $1.32
    • Interpublic Group (IPG) 7 a.m., $0.39
    • Pepco Holdings (POM) 7 a.m., $0.19
    • Telephone & Data Systems (TDS) 7 a.m., $0.25
    • Warner Chilcott (WCRX) 7 a.m., $0.90
    • United States Cellular (USM) 7:04 a.m., $0.24
    • Eldorado Gold (ELD CN) 7:30 a.m., $0.20
    • EW Scripps (SSP) 7:30 a.m., $0.10
    • J.C. Penney (JCP) 7:50 a.m., $0.67
    • Pinnacle West Capital (PNW) 8 a.m., $0.04
    • Washington Post (WPO), 8:30am, NA
    • American Water Works (AWK) 4:30 p.m., $0.33    

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)


We couldn’t make up this #1 Headline on Bloomberg this morning if we tried – “STOCKS, OIL CLIMB ON GLOBAL ECONOMIC RECOVERY”

COPPER – the Doctor just doesn’t agree with this manic media headline at all – neither does the 10yr UST yield – both are failing at critical lines of resistance of $3.85/lb and 2.03%, respectively, this morning. Those who confuse inflation with growth will be doing it for the 3rd time since 2008. 

  • Copper Traders Most Bullish in Two Months on Demand: Commodities
  • U.S. Soybean Output May Rise to 3.25 Billion Bushels, USDA Says
  • Oil Rises a Seventh Day in Longest Winning Streak in Two Years
  • Gold May Gain in London as Weaker Dollar Spurs Investor Demand
  • Corn Declines as U.S. Acreage Expands, Ukraine Sales to Climb
  • Oenophile Chinese Purchase Bordeaux for $470 Mainland Bottles
  • Copper Heads for First Weekly Gain in Three Before U.S. Data
  • Rubber Caps Best Gain in Five Weeks as Oil Rally Boosts Appeal
  • Statoil $1.2 Billion Tanzania Find May Hold Oil in New Play
  • Billionaires Vie for Railway to $40 Billion Coal Region: Energy
  • Glencore Will Notify EU of Xstrata Bid for Merger Review
  • Baosteel Spurs Dim Sum Revival on Cost Advantage: China Credit
  • Mentor of Central Bankers Fischer Rues Complacency in New Growth
  • Billionaires Vie for Australian Coal Rail
  • Gold’s Bull Run May Drive Price to $5,000, Wyke Forecasts
  • Cotton Exports From India Slows as Crisis Cools Apparel Demand
  • U.S. Corn Crop May Reach Record 14.27 Billion Bushels, USDA Says 

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CURRENCIES


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EUROPEAN MARKETS


RUSSIA – which is obviously a PetroDollar Equity market continues to rage higher as inflation expectations do. The RTSI is up another +2.4% this morning and +22% for the YTD as President Obama blames oil rising on “Wall Street Speculators” (dollar down be damned).


THE HEDGEYE DAILY OUTLOOK - 6

 

ASIAN MARKETS


YEN – How one of the world’s top 3 currencies can collapse like this and it not be called out by consensus is far beyond my reach. The Yen is down -6% for the month-to-date! It’s not a straight line down, but its close – reminds me of the Euro falling off its highs in April of 2011 and consensus saying “hey, buy European exporters!” – we continue to see this sovereign debt maturity spike (March) in Japan as the why on Yen…

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MIDDLE EAST


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The Hedgeye Macro Team