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TODAY’S S&P 500 SET-UP – March 5, 2012


As we look at today’s set up for the S&P 500, the range is 20 points or -1.00% downside to 1356 and 0.47% upside to 1376. 

 

SECTOR AND GLOBAL PERFORMANCE

THE HEDGEYE DAILY OUTLOOK - 1

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EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: -1013 (-2046) 
  • VOLUME: NYSE 699.91 (-14.07%)
  • VIX:  17.29 0.17% YTD PERFORMANCE: -26.11%
  • SPX PUT/CALL RATIO: 2.05 from 2.29 (-10.48%)

CREDIT/ECONOMIC MARKET LOOK:


USD – after a +1.3% week, finally attempting to stabilize above critical $79.03 support – Romney solidifying the Republican base has had a high correlation to a more stable dollar than the Newt/Santorum thing. Super Tuesday could be another bullish USD catalyst inasmuch as winning Michigan was. 

  • TED SPREAD: 41.48
  • 3-MONTH T-BILL YIELD: 0.06%
  • 10-Year: 1.98 from 1.97
  • YIELD CURVE: 1.70 from 1.70 

MACRO DATA POINTS (Bloomberg Estimates):

  • 10:00am: ISM Non-Manf. Comp, Feb., est. 56.2 (prior 56.8)
  • 10:00am: Factory Orders, Jan., est. -1.5% (prior 1.1%)
  • 11:30am: U.S. to sell $33b 3-mo., $31b 6-mo. bills
  • 1:20pm: Fed’s Fisher speaks in Dallas on state of economy
  • 7:30pm: Fed’s Fisher speaks in Houston on state of economy 

GOVERNMENT:

  • Quinnipiac Univ. releases poll of likely Ohio voters
  • VP Joe Biden Meets Mexico President Felipe Calderon
  • Defense Secretary Leon Panetta meets with Chile Defense Minister Andres Allamand at Pentagon, 10am
  • White House cybersecurity coordinator Howard Schmidt unveils report on protecting electronic health records, 10am
  • Treasury Secretary Tim Geithner speaks on national security at Northwestern Law School, 4:30pm
  • House, Senate in session:
    • Senate Minority Leader Mitch McConnell, R-Ky., House Minority Leader Nancy Pelosi, D-Calif., speak to AIPAC
    • FTC Chairman Jon Leibowitz, Commissioner Thomas Rosch testify on agency’s budget before House Appropriations, 3pm
    • House Energy and Commerce marks up Medicare Decisions Accountability Act, 4pm 

WHAT TO WATCH: 

  • BP reached a $7.8b settlement with businesses, individuals over the 2010 Deepwater Horizon oil rig disaster; U.K. shrs up as much as 3.1%; watch HAL, RIG
  • Israeli PM Benjamin Netanyahu visits White House amid questions over how to confront Iran’s nuclear program
  • China cut its eco. growth target to 7.5% from 8% in place since 2005
  • AIG sells $6b of AIA shrs to pay back U.S. govt.
  • “Dr. Seuss’s The Lorax” was top weekend film in North America, taking in $70.7m in the biggest opening weekend this yr
  • Deutsche Bank appoints James Ratigan joint head of Americas M&A
  • Polls show virtual tie between Rick Santorum, Mitt Romney in Ohio ahead of Super Tuesday primary
  • Vladimir Putin wins Russia presidency; opponents say vote marred by fraud
  • European services, manufacturing declined more then est. in Feb.
  • No IPOs expected to price today: Bloomberg data

 EARNINGS:

    • Vermilion Energy (VET CN) 6:55am, C$0.72
    • Casey’s General Stores (CASY) 4pm., $0.44
    • VeriFone Systems (PAY) 4:01pm, $0.52
    • Giant Interactive (GA) 4:30pm, $0.17
    • ABM Industries (ABM) 5pm, $0.22
    • Uranium One (UUU CN) 5:01pm, $0.05
    • First Majestic Silver (FR CN) Post-Mkt, $0.24
    • Flint Energy Services Ltd (FES CN) Post-Mkt, C$0.34    

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • Speculative Wagers on Crops Reach Five-Month High: Commodities
  • Gold Drops in London on Stronger Dollar, China Growth Target Cut
  • Crude Oil Falls in New York After China Lowers Economic Target
  • India Bans Cotton Exports Until Further Notice; Futures Gain
  • Copper Falls for Second Day as China Lowers Target for Growth
  • Wheat Declines as Former Soviet Nations May Increase Exports
  • Sugar Falls as Slowing Economies May Dent Demand; Coffee Slides
  • Palm Oil Seen Climbing 7.8% to Year High as Inventories Drop
  • Glencore CEO a ‘Little Lost’ at Calls for Higher Xstrata Bid
  • Hedge Funds Cut Bullish Gas Bets Most Since June: Energy Markets
  • Coffee Crop in Indonesia Poised for Highest in Three Years
  • Goodman Fielder Takeover Seen With Wilmar Instant 31%: Real M&A
  • Car-Sales Rebound Boosting Platinum, Palladium: Chart of the Day
  • Wagers on Crops Surge to Five-Month High
  • Freeport Union to Resist Move to Resume Grasberg Output Today
  • Sixth Supertanker of North Sea Crude Heads to Asia, Data Show
  • Clean-Energy Mandate for Utilities Seen Benefiting Natural Gas

 THE HEDGEYE DAILY OUTLOOK - 4

CURRENCIES


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EUROPEAN MARKETS


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ASIAN MARKETS


CHINA – Growth Slowing has been plainly obvious in just about every high frequency economic data point in Jan-Feb – plenty shrugged that off as being all about the Lunar calendar, but this morning’s Services PMI print out of China is a 48 and that’s more inline with what Wen’s guiding to in a 7.5% GDP Growth rate (vs the 9-12% China has been tracking since 2009).

YEN – President of Japan’s Credit Rating Agency Inc said the BOJ is “damned if they do, damned if they don’t” (buy bonds) with this massive debt maturity spike in 2012. Them be fighting words in Japan as the Yen continues to be in a Bearish Formation (bearish TRADE, TREND, and TAIL) with an immediate-term oversold level of $81.96 USD/JPY.

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MIDDLE EAST


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The Hedgeye Macro Team