THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – March 15, 2012


As we look at today’s set up for the S&P 500, the range is 32 points or -1.81% downside to 1369 and 0.48% upside to 1401. 

 

SECTOR AND GLOBAL PERFORMANCE

 

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EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: -1436 (-3249) 
  • VOLUME: NYSE 853.21 (-5.94%)
  • VIX:  15.31 3.45% YTD PERFORMANCE: -34.57%
  • SPX PUT/CALL RATIO: 1.01 from 1.42 (-28.87%)

CREDIT/ECONOMIC MARKET LOOK:


TREASURIES – here’s your hat-trick of ‘not goods’; if you are long anything in Fixed Income, that is (who would be?) – Treasury Bonds are getting blasted – 2yr yield have moved +44% to the upside in 2 weeks. It’s a good thing there is zero asymmetric risk with the Bernank’s zero bound policy. 

  • TED SPREAD: 39.24
  • 3-MONTH T-BILL YIELD: 0.08%
  • 10-Year: 2.29 from 2.27
  • YIELD CURVE: 1.82 from 1.74 

MACRO DATA POINTS (Bloomberg Estimates):

  • 8:30am: Empire Manufacturing, Mar., est. 17.5 (prior 19.53)
  • 8:30am: PPI (M/m), Feb., est. 0.5% (prior 0.1%)
  • 8:30am: Jobless Claims, week Mar. 10, est. 357k (prior 362k)
  • 9am: TIC Flows, Jan., est. $40.0b (prior $87.1b)
  • 9:45am: Bloomberg Consumer Comfort, week of Mar. 11, est. -36.0 (prior -36.7)
  • 10am: Philadelphia Fed., Mar., est. 12 from 10.2
  • 10am: Freddie Mac mortgage rates
  • Treasury Secretary Tim Geithner speaks to Economic Club of New York, Noon 

 GOVERNMENT:

  • President Obama travels to an Prince George’s County Community College to talk about energy
  • FERC meets to discuss Exelon-Constellation merger, PJM plan for capacity pricing, 10am
  • House in recess, Senate in session:
    • Senate Appropriations subcommittee hears from Transportation Secretary on agency’s budget, 9am
    • Senate Appropriations subcommittee hears from FBI director on agency’s budget, 10am
    • Senate Environment subcommittee hears from Nuclear Regulatory Commission chairman on lessons from Fukushima, 10am
    • Senate Finance Committee hears from Deere & Co. Chairman on establishing normal trade relations with Russia, 10am
    • Supreme Court not in session 

WHAT TO WATCH:

  • Cisco Systems said to be in advanced talks to acquire NDS Group for $5b: Calcalist
  • Yahoo! investor Third Point plans to file preliminary proxy statement “within the week” to seek shareholder votes on proposed slate of four new directors
  • LSI Corp. filed complaint with ITC against Funai Electric, MediaTek and Realtek Semiconductor over technology used in audiovisual devices
  • Credit-card cos. report monthly net charge-offs, delinquencies
  • Schlumberger said to seek buyers for unit that distributes oilfield supplies, business that may fetch as much as $800m
  • Google will present changes to search engine over next few months that could affect millions of websites: WSJ
  • Morgan Stanley preparing to invest millions in Mexican energy cos. as country opens up industry to private capital
  • Foreclosure filings in the U.S. fell 8% in Feb., smallest y/y decrease since Oct. 2010: RealtyTrac
  • House Republicans pushing for new round of budget cuts this year, congressional aides say, raising possibility of govt. shutdown shortly before Nov. election
  • Tropical cyclone Lua forecast to strengthen on Australia’s northwest coast as Chevron evacuates workers from gas projects, iron ore ships steam out to sea 

 EARNINGS:

    • Quebecor (QBR/B CN) 6 a.m., C$0.91
    • Hanwa Solar (HSOL) 6 a.m., $(0.30)
    • Aurizon Mines (ARZ CN) 6 a.m., C$0.13
    • Gabriel Resources (GBU CN) 7 a.m., $(0.01)
    • Scholastic (SCHL) 7 a.m., $(0.70)
    • Winnebago (WGO) 7 a.m., $0.04
    • Cato (CATO) 7 a.m., $0.34
    • AMC Networks (AMCX) 8 a.m., $0.60
    • Ross Stores (ROST) 8:30 a.m., $0.85
    • Athabasca Oil Sands (ATH CN) Pre-mkt, C$(0.03)
    • Crescent Point Energy (CPG CN) 9 a.m., C$0.12
    • Dole (DOLE) 4:05 p.m., $(0.12) 

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • Cocoa Rally Fading as African Rains Erase Shortage: Commodities
  • Soybeans Near Six-Month High as Brazil Crop May Miss Estimates
  • Oil Trades Near One-Week Low on Supply; Goldman Sees $130 Brent
  • Copper Swings Between Gains, Losses on Chinese, U.S. Economies
  • Gold Rebounds in New York as Low Interest Rates May Spur Demand
  • Cocoa Falls to One-Week Low as Rains Boost Crops; Sugar Advances
  • Global Food Prices Seen Declining as Demand Growth Slows
  • Rubber Shortage Widening to Bolster Prices, Producers Say
  • Oil Exports Ease Crude Sting for U.S. Economy: Chart of the Day
  • Obama’s Keystone Denial Imperils Refiners’ $25 Billion Oil Bet
  • Oil at $126 Boosts BP Ability to Pay More for Gulf Spill: Energy
  • Checking German Power May Trim Poland Price Gap: Energy Markets
  • Orange-Juice Price Seen Unaffected by End to U.S. Brazil Duties
  • Iron Ore Seen Rallying as China Lending Policy May Boost Demand
  • Fortescue Raises $2 Billion From Junk Bonds After Doubling Sale
  • Impala’s Hand Forced as Zimbabwe Starts Nationalization 

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CURRENCIES

 

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EUROPEAN MARKETS


SPAIN – acts like le chien de Sarkozy; the IBEX continues to flash a major negative divergence vs Global Equities as of late (Spain -1.4% YTD w/ Germany +20%!); when your stock, currency (Euro), and bond markets are all falling at the same time – not good.

 

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ASIAN MARKETS


ASIA – post the USA meltup in everything Apple and celebrations in Financials to a made-up test, Asia has basically been down for the last 2 days (Equities), with China and India leading the decline. Bulls were begging for India to cut rates last night and they didn’t (inflation), so the Sensex dropped -1.6% on that and snapped TRADE line support of 18,023, again. China’s FDI print was down -0.9% y/y – not good.

 

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MIDDLE EAST


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The Hedgeye Macro Team

 


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