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TODAY’S S&P 500 SET-UP – March 21, 2012


As we look at today’s set up for the S&P 500, the range is 20 points or -1.03% downside to 1391 and 0.39% upside to 1411. 

 

SECTOR AND GLOBAL PERFORMANCE

THE HEDGEYE DAILY OUTLOOK - 1

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EQUITY SENTIMENT:


SENTIMENT – KM has been on the road in Canada and Minnesota for the last 3 days and the feedback loop was frothy; allegedly, markets can’t go down because they haven’t yet – with Growth Slowing and seasonality playing negative like it did in Q1 of 08, 2010, and 2011, we look ripe for a counter consensus move (II Bullish/Bearish Survey = 2500 bps wide to the Bull side this morn). 

  • ADVANCE/DECLINE LINE: -1018 (-1784) 
  • VOLUME: NYSE 711.14 (-1.42%)
  • VIX:  15.58 3.59% YTD PERFORMANCE: -33.42%
  • SPX PUT/CALL RATIO: 2.22 from 1.28 (73.44%)

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 37.76
  • 3-MONTH T-BILL YIELD: 0.10%
  • 10-Year: 2.37 from 2.36
  • YIELD CURVE: 1.98 from 1.97 

MACRO DATA POINTS (Bloomberg Estimates):

  • 7am: MBA Mortgage Applications, week of Mar. 16 (prior - 2.4%)
  • 9:30am: Fed Chairman Bernanke, Treasury Secretary Geithner testify on Europe debt crisis
  • 10am: Existing Home Sales, Feb., est. 4.61m (prior 4.57m)
  • 10am: Existing Home Sales (M/m), Feb., est. 0.9% (prior 4.3%)
  • 10:30am: DoE inventories 

GOVERNMENT:

  • President Obama travels to New Mexico, Nevada to tout energy strategy
  • Public Company Accounting Oversight Board meets on ways to enhance auditor independence, with remarks by Paul Volcker,
  • Harvey Pitt, Arthur Levitt. 8:45am
  • House, Senate in session:
    • House Homeland Security Committee holds hearing on Iran, Hezbollah and threats to the U.S. 9:30am
    • House Oversight Committee hears from Treasury Secretary Tim Geithner, Fed Chairman Ben Bernanke on Europe’s sovereign debt crisis. 9:30am
    • Senate Banking subcommittee holds hearing on crowdfunding. 9:30am
    • House Appropriations subcommittee hears from Internal Revenue Service Commissioner Douglas Shulman on the agency’s budget request. 10am
    • House Appropriations subcommittee hears from Housing Secretary Shaun Donovan on the agency’s budget request. 10am
    • House Natural Resources holds hearing on gasoline prices. 10am
    • Senate Homeland Security holds hearing on President Barack Obama’s government reorganization plan. 10am
    • House Budget Committee marks up Chairman Paul Ryan’s 2013 budget proposal. 10:30am
    • Senate Judiciary subcommittee holds hearing on the Verizon-cable deals. 2pm
    • House Financial Services Committee meets to consider issuing a subpoena to MF Global Holdings employee Edith O’Brien. 2pm
    • Senate Homeland Security Committee hears from Homeland Security Secretary Janet Napolitano on the agency’s budget request. 2:30pm
    • Senate Appropriations subcommittee hears from Commodity Futures Trading Commission Chairman Gary Gensler on the agency’s budget. 2:30pm 

WHAT TO WATCH:    

  • Fed Chairman Bernanke says Europe must aid banks even as strains have eased; testifies before House committee today
  • Mitt Romney wins Illinois GOP primary with 47% to Rick Santorum’s 35%
  • Vantiv, payment processor that started as a unit of Fifth Third, seeks to raise as much as $529m in IPO
  • Previously owned U.S. home sales may have risen 0.9% to 4.61m annual rate in Feb., fastest since May 2010, economists est.
  • CMS Medcac meets on anti-VEGF treatment for diabetic macular edema; watch Valeant, Regeron, Roche
  • GlaxoSmithKline, Johnson & Johnson are forming a $200m fund with Index Ventures to invest in early-stage biotechnology cos.
  • Transocean holders’ suits over rig explosion dismissed by judge
  • Geithner agrees to written testimony in Lehman’s JPMorgan suit
  • Ziggo raised ~EU804m ($1.1b) in IPO selling at top end of range
  • Thomson Reuters nears sale of health-care business: WSJ
  • Microsoft pledges to drive price down to bid to become top seller in China smartphone market 

EARNINGS:

    • General Mills (GIS) 6:57am, $0.56
    • Actuant (ATU) 7:30am, $0.38
    • Fred’s (FRED) 7:45am, $0.24
    • Alacer Gold (ASR CN) Pre-Mkt, $0.16
    • Sonic (SONC) 4pm, $0.02
    • Shoe Carnival (SCVL) 4:01pm, $0.21
    • Clarcor (CLC) 4:02pm, $0.47
    • Discover Financial Services (DFS) 4:15pm, $0.94
    • Franco-Nevada (FNV CN) 5:15pm, $0.32

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • Appalachian Coal Fights for Survival on Shale Boom: Commodities
  • Copper Advances on Indications of Recovering Economy in U.S.
  • Oil Rebounds From Biggest Drop in Three Months as Supplies Fall
  • Gold May Advance as a Weaker Dollar Prompts Investment Demand
  • Sugar Falls in London on Increased Supplies; Coffee Also Drops
  • Soybeans May Gain on Speculation U.S. Planting Didn’t Increase
  • U.S. Warns Iran Oil Buyers of Sanctions, Japan and EU Exempt
  • Indian Jewelers to Reopen Stores After Five-Day Shutdown
  • Iron Ore to Drop as China Growth Slows, Biggest Shipper Says
  • Saudi Arabia Can Raise Oil Output 25% If Needed, Naimi Says
  • Single-Cup Coffee Cuts ‘Waste,’ Lowering Bean Demand, Illy Says
  • Copper-Oil Ratio Signals Drop in U.S. Stocks: Chart of the Day
  • Japan Adds Research Ship to Find Rare Earths, Reduce Imports
  • Oil Rebounds From Biggest Drop in 3 Months
  • Glencore Finds Viterra After BHP Billiton Miss: Corporate Canada
  • Gold May Decline Below $1,600 on Fibonacci: Technical Analysis
  • Gold Seen Recapturing Precious-Metal Crown: Chart of the Day 

THE HEDGEYE DAILY OUTLOOK - 4

CURRENCIES

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EUROPEAN MARKETS

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ASIAN MARKETS


ASIA – generally weak session in Asian Equities after the Hang Seng snapped our line yesterday; Asian Growth Slowing is a reality right now; the perma-bulls refused to accept it in Q1 of 2011 and are at their own risk doing so now.

YEN – easily the ugliest chart in all of Global Macro right now – also something consensus has not moved towards addressing/understanding yet; we’ll be in Boston all day explaining why we think the Yen’s -9.2% drop since FEB is similar to the initial steep decline of the Euro in April/May of 2011. #SovDebtRisk

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MIDDLE EAST


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The Hedgeye Macro Team