TODAY’S S&P 500 SET-UP – March 20, 2012
As we look at today’s set up for the S&P 500, the range is 26 points or -1.76% downside to 1385 and 0.09% upside to 1411.
SECTOR AND GLOBAL PERFORMANCE
EQUITY SENTIMENT:
- ADVANCE/DECLINE LINE: 766 (1051)
- VOLUME: NYSE 721.40 (-56.23%)
- VIX: 15.04 3.94% YTD PERFORMANCE: -35.73%
- SPX PUT/CALL RATIO: 1.28 from 1.94 (-34.02%)
CREDIT/ECONOMIC MARKET LOOK:
- TED SPREAD: 39.74
- 3-MONTH T-BILL YIELD: 0.09%
- 10-Year: 2.34 from 2.38
- YIELD CURVE: 1.98 from 2.00
MACRO DATA POINTS (Bloomberg Estimates):
- 7:45am/8:55am: ICSC/Redbook weekly retail sales
- 8:30am: Housing Starts, Feb., est. 700k (prior 699k)
- 8:30am: Housing Starts (M/m), Feb., est. 0.1% (prior 1.5%)
- 8:30am: Building Permits, Feb., est. 686k (prior 682k (revised))
- 8:30am: Building Permits (M/m), Feb., est. 0.6% (prior 0.7%)
- 11:30am: U.S. to sell $40b 4-week bills
- 12:45pm: Bernanke lectures at George Washington U. (1 of 4)
- 4:30pm: API inventories
- 5:30pm: Fed’s Kocherlakota speaks in St. Louis, Missouri
GOVERNMENT/POLITICS:
- U.S. CFTC may vote on rule defining swap dealers under the Dodd-Frank Act, 9:30am
- President Barack Obama meets with Irish Prime Minister Enda Kenny, 10:10am
- FDIC board will meet to consider notices of proposed rulemaking on assessments for large banks and enforcement of subsidiary, affiliate contracts under FDIC receivership, 10am
- Republican primary in Illinois
- Deadline for presidential candidates, super-PACs to file updated finance reports with Federal Elections Commission
- Ron Paul to appear on Tonight Show with Jay Leno, 11:30pm
- House, Senate:
- Treasury Secretary Tim Geithner testifies to House Financial Services on global financial system, 10am
- Senate Environment and Public Works panel holds hearing on EPA’s mercury and air toxics standards for power plants, 10am
- House Oversight holds hearing on Energy Dept.’s stimulus spending, 10am
- Senate Banking holds hearing on Obama’s nominees to Federal Reserve’s Board of Governors, 10am
- House Armed Services Committee holds hearing on developments in Afghanistan, 10am
- House Appropriations subcommittee hears from Commerce Secretary John Bryson on the agency’s budget request, 10am
- Senate Commerce subcommittee holds hearing on commercial airline safety oversight, 2:45pm
WHAT TO WATCH:
- U.S. housing starts probably increased to 700k annual rate in Feb., a 3-mo. high, economists est.
- Senate Banking Committee to hold hearing on Fed nominations of Jeremy Stein, Jerome Powell
- Glencore said to near Viterra acquisition with Agrium, Richardson, deal may be announced within 24 hrs
- GE Capital’s Aa2 rating by Moody’s may be cut below its parent; both are under review
- Berkshire Hathaway directors, including Warren Buffett, won dismissal of shreholder claims over challenged stock trades by former Berkshire executive David Sokol
- Fed Chairman Ben Bernanke to give first of four lectures at George Washington School of Business
- Facebook CEO Mark Zuckerberg is said to take low profile in early IPO marketing
- CVC said to hire Goldman Sachs to explore a possible sale of a stake in Formula One in an IPO
- House Republicans will call for overhauling U.S. tax code by reducing rates, brackets
- China’s vehicle sales this yr may miss industry group’s growth forecast as economic conditions damp demand
- No IPOs scheduled
EARNINGS:
- JA Solar (JASO) 6:02am, $(0.63)
- Tiffany (TIF) 6:55am, $1.42
- DSW (DSW) 7:00am, $0.50
- Jefferies Group (JEF) 8:00am, $0.29
- Oracle (ORCL) 4:00pm, $0.56
- SAIC (SAI) 4:02pm, $0.33
- Jabil Circuit (JBL) 4:02pm, $0.58
- Cintas (CTAS) 4:07pm, $0.52
- Laredo Petroleum Holdings (LPI US) Post-Mkt, NA
COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)
GOLD – rising UST yields is bad for Gold on the margin. Period. Gold’s intermediate-term TREND line of $1691 remains broken as 10yr yields remain comfortably above my intermediate-term TREND line of 2.03%.
- Record Cotton Harvest Seen Cutting Prices for Gap: Commodities
- Copper Falls as Stockpiles Expand in China, Biggest Consumer
- Gold Declines on Concern Strengthening Economy Will Cut Demand
- Nickel-Ore, Bauxite Exports From Indonesia to Drop on Ban
- Oil Drops From Three-Week High on Speculation Supplies Rising
- Shipping Targets for Bears Dwindling After $99 Billion Plunge
- Corn Declines a Second Day on Early U.S. Planting, Wheat Slips
- Jewelers in India Extend Strike Seeking Withdrawal of Taxes
- Palm Oil Declines to One-Week Low on Soybean Planting Prospects
- India Seen Increasing Raw Sugar Exports Ahead of Brazil Harvest
- Ship Owners Losing After $11.4 Billion Battle for Boxes: Freight
- Australian State Says Uranium Prospects Attracting China, India
- Oil Supplies Climb to Six-Month High in Survey: Energy Markets
- China Increases Fuel Prices as Crude Gains
- China Steel Growth Has Flattened as Economy Shifts, BHP Says
- Less Grain Means More Gain as Export Prices Rise: BGOV Barometer
- Gold Stocks Due for Rebound Versus Metal Price: Chart of the Day
CURRENCIES
US Dollar – our intermediate-term TREND line of support of $79.33 is once again under assault by central planners who are absolutely hooked on the inflation policy born out of it (Obama’s % chance of winning the election just shot up to another new high of 60.5% in the Hedgeye Election Indicator (+200bps wk/wk) - stock market inflation is a big factor in our back-test).
EUROPEAN MARKETS
ASIAN MARKETS
CHINA – got Growth Slowing yet? Interestingly, but not surprisingly, the Hang Seng (-1.1%) snapped its immediate-term TRADE line of 21,255 overnight, joining India’s Sensex as the 2nd major Asian Equity market to break a significant line of momentum.
MIDDLE EAST
The Hedgeye Macro Team