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THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – February 28, 2012


As we look at today’s set up for the S&P 500, the range is 15 points or -0.70% downside to 1358 and 0.40% upside to 1373. 

 

SECTOR AND GLOBAL PERFORMANCE

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EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: -26 (-298) 
  • VOLUME: NYSE 732.41 (14.27%)
  • VIX:  18.19 5.08% YTD PERFORMANCE: -22.26%
  • SPX PUT/CALL RATIO: 2.36 from 2.26 (4.43%)

CREDIT/ECONOMIC MARKET LOOK:


BONDS – both the UST 10yr and the Yield Spread are telling you all you need to know about US Growth Slowing sequentially here in FEB. The Durable Goods number is a JAN print and doesn’t really matter in our model – the PMI and ISM prints for FEB (wed and thur) do. 10s failed at 2.03% TREND resistance and then snapped 1.97% TRADE support. No real support now to 1.89% with 10s/2s Spread -4bps already for the wk-to-date. 

  • TED SPREAD: 38.74
  • 3-MONTH T-BILL YIELD: 0.10%
  • 10-Year: 1.93 from 1.93
  • YIELD CURVE: 1.64 from 1.64 

MACRO DATA POINTS (Bloomberg Estimates):

  • 7:45am/8:55am: ICSC/Redbook weekly retail sales
  • 8:30am: Durable Goods, Jan., est. -1.0 (prior 3.0%)
  • 9:00am: S&P/Case-Shiller 20 City, Dec. est. -0.35% (prior - 0.70%)
  • 10:00am: Consumer Confidence, Feb., est. 63.0 (prior 61.1)
  • 10:00am: Richmond Fed, Feb., est. 14 (prior 12)
  • 10am: Fed’s Duke testifies on housing to Senate Banking Committee
  • 11:30am: U.S. selling $40b 4-week bills, $20b 49-day bills
  • 7:15pm: Fed’s Pianalto speaks on economy in Westfield Center, Ohio 

GOVERNMENT:

  • President Obama speaks at United Auto Workers legislative conference, 11:30am
  • FDIC holds briefing on quarterly bank industry earnings, 10am
  • House, Senate in session:
    • House Appropriations Committee hears from Attorney General Eric Holder on his agency’s budget, 9am
    • Senate Budget Committee hears from Defense Secretary Leon Panetta and Joint Chiefs Chairman Martin Dempsey on the Pentagon budget proposal, 9:30am
    • Senate Energy and National Resources Committee holds hearing on Interior Department budget request, 10am
    • Senate Agriculture Committee holds hearing to develop a 2012 farm bill, 10am
    • House Energy and Commerce Committee hears from EPA Administrator Lisa Jackson on her agency’s budget request, 10am
    • Senate Banking and Housing Committee hears from Housing Secretary Shaun Donovan and Fed Gov. Elizabeth Duke on the state of the housing market, 10am
    • Senate Appropriations Committee hears from Secretary of State Hillary Clinton on the State Department’s budget request, 10am
    • House Appropriations Committee hears from TSA Administrator John Pistole on his agency’s budget. 11am
    • House Ways and Means Committee hears from Health and Human Services Secretary Kathleen Sebelius on her agency’s budget request, 1pm
    • House Appropriations Committee hears from Energy Secretary Steven Chu on his agency’s budget request,2pm   

WHAT TO WATCH:

  • Rick Santorum, Mitt Romney face off in Michigan, Arizona presidential primaries
  • Orders for U.S. durable goods may have dropped 1% in January on slower aircraft demand, economists est.
  • Supreme Court hears oral arguments in case involving Royal Dutch Shell over whether corporations are immune from tort liability for violations of intl law, 10am
  • JPMorgan holds annual investor day
  • Greek parliament votes on implementation law for austerity measures
  • TomTom falls as much as 19% as 2012 rev. forecast trails est., watch Garmin
  • News Corp., Warner Bros. said to be working with Sandisk, Western Digital to create storage devices for film, TV 

EARNINGS:

    • Fresh Del Monte Produce (FDP) 6 a.m., $0.09
    • Tech Data (TECD) 6 a.m., $1.66
    • Fortress Investment Group (FIG) 6:30 a.m., $0.10
    • Magellan Health Services (MGLN) 6:30 a.m., $0.79
    • Sanderson Farms (SAFM) 6:30 a.m., $0.18
    • Vitamin Shoppe (VSI) 6:30 a.m., $0.33
    • NRG Energy (NRG) 6:45 a.m., $(0.17)
    • Canadian Apartment Properties REIT (CARu CN) 6:51 a.m., $0.32
    • AutoZone (AZO) 7 a.m., $4.04
    • HollyFrontier (HFC) 7 a.m., $1.20
    • Xylem (XYL) 7 a.m., $0.46
    • Office Depot (ODP) 7 a.m., $0.00
    • Bank of Montreal (BMO CN) 7:12 a.m., $1.36
    • Tenet Healthcare (THC) 7:30 a.m., $0.14
    • Viropharma (VPHM) 7:30 a.m., $0.55
    • Ariad Pharmaceuticals (ARIA) 7:35 a.m., $(0.18)
    • Mentor Graphics (MENT) 7:50 a.m., $0.50
    • Rowan Cos (RDC) 8:10 a.m., $0.30
    • Cablevision (CVC) 8:15 a.m., $0.23
    • Ecolab (ECL) 8:25 a.m., $0.70
    • FirstEnergy (FE) 8:30 a.m., $0.75
    • Sempra Energy (SRE) 9 a.m., $1.06
    • DreamWorks Animation SKG (DWA) 4 p.m., $0.31
    • MarkWest Energy Partners (MWE) 4 p.m., $0.49
    • Collective Brands (PSS) 4 p.m., $(0.81)
    • First Solar (FSLR) 4:04 p.m., $1.57
    • Universal Display (PANL) 4:05 p.m., $0.06
    • Kodiak Oil & Gas (KOG) 4:10 p.m., $0.09
    • Chesapeake Midstream Partners (CHKM) 4:15 p.m., $0.43 

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)


OIL – 2 down days in a row is as bullish as bullish does for Global Equity markets. Asia acted as well as it has in FEB last night and US Futures like oil down because they should – it’s good for the 71% (Consumption/GDP). The problem, of course, is that Brent and WTIC only have 2-3% downside in the immediate-term and should resume their inflations thereafter.

  • Soy Stocks Fall Most Since 1996 Amid Brazil Drought: Commodities
  • Oil Declines a Second Day on Concern Price Gains Sapping Demand
  • Copper Rises to Two-Week High on Signs of Stronger Confidence
  • Sugar May Tumble Below 20 Cents on Surplus, F.O. Licht Says
  • Soybeans Climb to Five-Month High as Rains Too Late for Brazil
  • Gold Advances in London as Weaker Dollar Spurs Investor Demand
  • Sugar Falls as Brazil’s Exports Are More Profitable; Cocoa Rises
  • Iron Ore Cuts Monthly Loss on Speculation China Demand to Climb
  • World’s Biggest Tea Auction Halted Over Kenya Tax Dispute
  • Oil Supplies Climb in Survey on Canadian Imports: Energy Markets
  • BP Investors See Spill Deal Narrowing $44 Billion Gap: Energy
  • ONGC, GAIL Plan $2 Billion Bid for Cove, Times of India Says
  • Muddy Waters Losing Support in Stock Market on Latest Calls
  • Tankers Falling 42% as Japan Oil Use Drops
  • China’s Iron Ore Imports May Drop 14% as Domestic Output Gains
  • Newmont Says It’s Too Early to Say Whether Conga Will Proceed
  • Batista’s OSX Debut Offering Buoyed by Oil Output: Brazil Credit 

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CURRENCIES


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EUROPEAN MARKETS


GREECE – a not so funny thing happened on the way to the risk management forum – with Greek stocks down another -1.6% this morning (leading losers globally), they’ve gone from up +23% to +8% YTD in less than 2 weeks. Big Government Intervention perpetuates volatility. Nice.

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ASIAN MARKETS

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MIDDLE EAST


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The Hedgeye Macro Team