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
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
CURRENCIES
EUROPEAN MARKETS
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
MIDDLE EAST
The Hedgeye Macro Team