TODAY’S S&P 500 SET-UP – March 1, 2012
As we look at today’s set up for the S&P 500, the range is 9 points or -0.20% downside to 1363 and 0.46% upside to 1372.
SECTOR AND GLOBAL PERFORMANCE
EQUITY SENTIMENT:
- ADVANCE/DECLINE LINE: -949 (-985)
- VOLUME: NYSE 1111.24 (47.25%)
- VIX: 18.43 2.62% YTD PERFORMANCE: -21.24%
- SPX PUT/CALL RATIO: 2.48 from 1.33 (86.47%)
CREDIT/ECONOMIC MARKET LOOK:
USD – get the big moves in the Dollar right, and you’ll get a lot of big things beta right. We moved to 27 for 28 in our all-time long/short USD calls yesterday (tire pump), and if you didn’t know that Gold, Basic Material Stocks, etc have correlation risk to the big up/down days in USD, now you know. We sold USD into the close as it remains below $79.06 TREND line resist.
- TED SPREAD: 40.80
- 3-MONTH T-BILL YIELD: 0.08%
- 10-Year: 1.93 from 1.94
- YIELD CURVE: 1.72 from 1.68
MACRO DATA POINTS (Bloomberg Estimates):
- 8:30am: Personal Income, Jan., est. 0.4% (prior 0.5%)
- 8:30am: Personal Spending, Jan., est. 0.4% (prior 0.0%)
- 8:30am: Jobless Claims, wk of Feb. 25, est. 355k, (prior 351k)
- 9:45am: Bloomberg Consumer Comfort, wk of Feb. 26, (prior -38.4)
- 10am: Construction Spending, Jan., est 1.0% (prior 1.5%)
- 10am: ISM Manufacturing, Feb., est. 54.5 (prior 54.1)
- 10am: 30-yr mortgage rates from Freddie Mac
- 10:30am: EIA natural gas storage change
- 12:30pm: Fed’s Lockhart speaks on economy and banking in Atlanta
- 11:30pm: Fed’s Williams speaks at economic forecast dinner in Honolulu
GOVERNMENT:
- President Barack Obama speaks on economy in Nashua, N.H.; visits NYC for fund-raiser
- CFTC hosts Day 2 of discussion on protecting customer funds
- House, Senate in session:
- Senate Appropriations Committee hears from Housing Secretary Shaun Donovan on his agency’s budget request, 9:30am
- House Science, Space and Technology hears from Energy Secretary Steven Chu on R&D budget request, 9:30am
- Senate Banking Committee receives the semiannual monetary policy report from Fed Chairman Ben Bernanke, 10am
WHAT TO WATCH:
- Feb. retail sales may gain 3.5%, Retail Metrics says, helped by warmer-than-avg. weather, Presidents, Valentine’s Day holidays
- Light-vehicle sales in Feb. may have run at 14.2m SAAR, matching Jan.; watch to see how gas prices impact mix
- Fed Chairman Bernanke heads before Senate for second day of testimony; no signal yesterday that economy needs addl monetary boost
- Yelp IPO expected to price after the market closes; seeking to raise as much as $100m
- ISDA Determinations Committee to examine whether credit event happened with Greece, affecting credit-default swaps
- ISM factory index may have climbed to 8-mo. high of 54.5 from 54.1 in Jan.,economists est.
- U.S. homes in or nearing foreclosure accounted for 24% of residential purchases in 4Q, up from 20% in 3Q: RealtyTrac
- Shell filed an injunction seeking timely review of Alaska exploration plans
- China’s manufacturing index rose to 51.0, third straight month of gains
- Bank of America considering new checking-account fees: WSJ
- Tata Communications considering a bid for Cable & Wireless; Vodafone also evaluating offer for network operator
- European inflation accelerated in Feb. to 2.7% from 2.6% in Jan. as oil prices rose
EARNINGS:
- Bombardier (BBD/B CN) 6am, $0.12
- Royal Bank of Canada (RY CN) 6am, $1.14
- Toronto-Dominion Bank (TD CN) 6:30am, $1.77
- Martha Stewart (MSO) 7:30am, $0.06
- Kosmos Energy (KOS) 8am, $0.11
- George Weston (WN CN) 8am, $0.98
- Kroger (KR) 8:45am, $0.49
- Esterline Technologies (ESL) 4pm, $0.75
- Ascena Retail Group (ASNA) 4:02pm, $0.67
- National Bank of Canada (NA CN) 4:30pm, $1.82
- Foot Locker (FL) 4:45pm, $0.51
COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)
GOLD – got gold? Into its 12th straight up year, plenty of people do - so do we. The line in the sand that matters to us is $1691 – that’s our TREND line – below it, we're a seller – above it we buy. Its pure momentum driven by the Bubble in Keynesian Economics so we'll just call that out for what it is. The risk for Gold is Bernanke losing his job, so watch Romney’s momentum.
- Iron Ore Extends Bull Market as Supply Growth Drops: Commodities
- Saudi Oil-Rig Use Soars as Obama Pressed on SPR: Energy Markets
- Brent Oil Rises a Second Day as Iran Risk Counters Supply Gain
- Gold Rebounds Above $1,700 After Bernanke’s Comments Spark Rout
- Commodities Give Best Returns First Time Since July on Iran Risk
- Copper Advances as Manufacturing Growth Strengthens in China
- Wheat Falls as Storms in U.S. May Moisten Soil; Soybeans Drop
- Robusta Coffee Increases on Supply Concerns; Cocoa Advances
- Gold Offering No Lifeboat for Iran Oil Sales: Chart of the Day
- Impala Continues Rehiring Workers as Protesters Block Routes
- Japan Says in Talks to Start Importing LNG From Continental U.S.
- Keystone Oil Pipeline Seen Raising Gas Prices in Midwest: Energy
- Iran Suffers ‘Crippling Effect’ of Sanctions on Trade, Banking
- Thai Rice Stocks to Surge as Yingluck Extends Purchase Program
- U.S. Was Net Oil-Product Exporter in 2011
- Cheap U.S. Corn May Spark China Import Binge: Chart of the Day
- Silver May Climb to Record on Haven, Industry: Chart of the Day
CURRENCIES
EUROPEAN MARKETS
ASIAN MARKETS
INDIA – out with the Keynesian textbooks - we define economic stagflation like yield curves do – when inflation is running higher than nominal growth. India has it right now. Sensex down another -1.1% overnight, snapping its TRADE line of 17,683 (that’s new). Countries that are net short oil are in for more pain like they incurred in Q211. Brent hold my $122.21 support.
MIDDLE EAST
The Hedgeye Macro Team