THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – March 19, 2012


As we look at today’s set up for the S&P 500, the range is 32 points or -1.93% downside to 1377 and 0.34% upside to 1409. 

 

SECTOR AND GLOBAL PERFORMANCE

 

THE HEDGEYE DAILY OUTLOOK - 1A

 

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EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: -285 (-864) 
  • VOLUME: NYSE 1648.04 (95.16%)
  • VIX:  14.47 -6.16% YTD PERFORMANCE: -38.16%
  • SPX PUT/CALL RATIO: 1.94 from 1.06 (-45.36%)

CREDIT/ECONOMIC MARKET LOOK:


TREASURIES – monster breakout in bond yields last week – was it the YTD top or can they hold; the intermediate-term TREND line of support for the 10yr = 2.03% and now immediate-term TRADE support = 2.12%. 

  • TED SPREAD: 39.24
  • 3-MONTH T-BILL YIELD: 0.08%
  • 10-Year: 2.27 from 2.29
  • YIELD CURVE: 1.93 from 1.94 

MACRO DATA POINTS (Bloomberg Estimates):

  • 8:35am, Fed’s Dudley to speak on Long Island about economy
  • 9:30am, Fed’s Killian testifies in Brooklyn on foreclosures
  • 10:00am, NAHB Housing Market Index, Mar., est. 30 (prior 29)
  • 11:30am, U.S. to sell $33b 3-mo., $31b 6-mo. bills
  • 1:40pm, Fed’s Dudley in roundtable on Long Island

GOVERNMENT:

    • Republican presidential candidate Mitt Romney swept Puerto Rico’s primary; Illinois tomorrow
    • Deadline for Wisconsin election officials to review petitions seeking the recall of Governor Scott Walker
    • Deadline is Tuesday for presidential candidates, super-PACs to file updated finance reports
    • House, Senate in session
    • Republicans in Congress may release details of plan to give businesses with fewer than 500 employees an extra 20% tax deduction
    • FCC Chairman Julius Genachowski joins Republican member Robert McDowell to testify on regulator’s budget to House Appropriations subcommittee. 3pm
    • Supreme Court in session 

WHAT TO WATCH:    

  • Apple to discuss plans for its $97.6b in cash, investments in call at 9am ET, may announce dividend: analysts
  • UPS will buy TNT Express for $6.8b, securing deal after raising offer to EU9.50 per share in cash
  • Vista Equity Partners agreed to acquire Misys for $2.1b
  • CVC Capital said to be looking to refinance Nine Entertainment’s A$2.7b ($2.86b) Feb. 2013 senior debt: WSJ
  • UTX has until midnight to determine how it wants to address EU concerns regarding GR purchase
  • Commerce Dept. to rule on claim by Bonn, Germany-based SolarWorld’s U.S. unit that Chinese competitors receive unfair government support
  • Fed corrected errors in loan-loss estimated for banks, financial firms including Citigroup in stress test of capital under hypothetical economic slump
  • FTC examining what impact hospital mergers have on health- care costs for consumers: WSJ
  • Brazilian prosecutor will file charges by March 22 for “environmental crimes” following oil spill off coast of Brazil involving Chevron
  • Five states said to be considering whether they’ll sue to challenge Express Scripts’s bid for Medco Health Solutions if federal antitrust regulators approve deal
  • Apple sought another court order to get Motorola Mobility Holdings to turn over information about its pending acquisition by Google, development of Android software operating system
  • Deutsche Lufthansa’s sale of its BMI Regional unit faltering as buyer struggling to raise money for purchase
  • “21 Jump Street” led U.S., Canadian box office over the weekend, generating $35m in sales for Sony’s Columbia Pictures
  • No U.S. IPOs scheduled: Bloomberg data 

EARNINGS:

    • SouthGobi Resources (SGQ CN) 8am, C$0.01
    • Adobe (ADBE) 4pm, $0.57    

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)


OIL – both Brent and WTIC continue to hold all immediate-term price momentum lines of support and this will continue to be the most relevant Global headwind to real inflation adjusted growth going forward. We have no idea how some of the bulls are getting to +3% US GDP in Q1 and Q2; its mathematically impossible in our model using the right GDP Deflator. 

  • Speculators Dumped Crop Wagers Before Biggest Rally: Commodities
  • Oil Falls From One-Week High on Supply; BofA Boosts Forecasts
  • Copper Swings Between Gains, Losses on Chinese Housing, Stocks
  • Global Food Price Rally Will Drive Investment, Nestle Says
  • Gold May Decline as Advancing Growth Reduces Investor Demand
  • Coffee Climbs as Roasters May Tap Europe’s Stocks; Sugar Falls
  • Corn Climbs to Six-Month High as Rains May Hurt China Planting
  • UBS AG Reduces Gold Forecasts Amid ‘Challenging Environment’
  • Cocoa Harvest in Indonesia to Drop on Palm Oil, Rubber Lure
  • Funds Cut Bullish Gas Bets as Supply Glut Grows: Energy Markets
  • Fukushima Farmers Face Decades of Tainted Crops as Fears Linger
  • Gold Stock Premium at Record Low on ETF Demand: Corporate Canada
  • Germany $263 Billion Electric Shift Biggest Since War (Correct)
  • Speculators Dumped Crop Bets Before Rally
  • Jewelers in India Strike for First Time Since 2005 on Taxes
  • Sugar Exports From Philippines Set to Double as Supply Gains
  • Italian Refiners Make Initial Bookings for Iran Oil Shipments 

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CURRENCIES


THE HEDGEYE DAILY OUTLOOK - 5

 

 

EUROPEAN MARKETS

 

THE HEDGEYE DAILY OUTLOOK - 6

 

 

ASIAN MARKETS


INDIA – positive price momentum on the Sensex is nowhere to be found = down another -1.3% last night after the Indian government revealed more about its mounting deficit issues (-5.9% of GDP and rising); countries who are short oil are going to be in a world of hurt on a real inflation adjusted growth basis (India down -6.5% from its Feb 21 top).

 

THE HEDGEYE DAILY OUTLOOK - 7

 

 

MIDDLE EAST


THE HEDGEYE DAILY OUTLOOK - 8

 

 

 

The Hedgeye Macro Team

 

 


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