THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – March 22, 2012


As we look at today’s set up for the S&P 500, the range is 16 points or -0.56% downside to 1395 and 0.58% upside to 1411. 

 

SECTOR AND GLOBAL PERFORMANCE

 

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EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: -32 (986) 
  • VOLUME: NYSE 726.47 (2.16%)
  • VIX:  15.13 -2.89% YTD PERFORMANCE: -35.34%
  • SPX PUT/CALL RATIO: 3.27 from 2.22 (47.30%)

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: 38.78
  • 3-MONTH T-BILL YIELD: 0.08%
  • 10-Year: 2.26 from 2.30
  • YIELD CURVE: 1.89 from 1.93 

MACRO DATA POINTS (Bloomberg Estimates):

  • 8:30am: Jobless claims, week of Mar. 17, est. 350k (prior 351k)
  • 9:45am, Bloomberg Consumer Comfort, week Mar. 18 (prior -33.7)
  • 10am: House Price Index (M/m), Jan., est. 0.3% (prior 0.7%)
  • 10am: Leading Indicators, Feb., est. 0.6% (prior 0.4%)
  • 10am: Fed’s Tarullo testifies to Senate committee on regulation and Volcker rule
  • 10am: Freddie Mac 30-yr mortgage
  • 10:30am: EIA natural gas storage
  • 12:45pm: Fed Chairman Bernanke lectures at George Washington U. (2 of 4)
  • 1pm: U.S. to sell $13b 10-yr TIPS (reopen)
  • 4pm: Fed’s Evans speaks on communication at Brookings
  • 8pm: Fed’s Bullard speaks in Hong Kong
  • U.S. Treasury announces 2-, 5-, 7-yr auction sizes 

GOVERNMENT:

  • President Barack Obama to speak on energy infrastructure in Oklahoma, 10:55am
  • Obama attends event on energy-related research, development at Ohio State University, 4:30pm
  • House, Senate in session:
    • Senate Armed Services Committee holds hearing on the situation in Afghanistan, 9:30am
    • House Ways and Means subcommittee hears from IRS Commissioner Doug Shulman on its operations and the tax filing season, 9:30am
    • Senate Appropriations subcommittee hears from Commerce Secretary John Bryson on his agency’s proposed budget, 10am
    • Senate Environment Committee hears from Environmental Protection Agency Administrator Lisa Jackson on the agency’s budget, 10am
    • Senate Banking Committee hears from Treasury Undersecretary Lael Brainard, Fed member Daniel Tarullo and FDIC acting Chairman Martin Gruenberg on the Volcker rule, 10am
    • House Appropriations subcommittee hears from acting Federal Aviation Administration chief Michael Huerta on the agency’s budget, 10am
    • House Appropriations subcommittee hears from Commodity Futures Trading Commission Chairman Gary Gensler on the agency’s budget, 10:30am   

WHAT TO WATCH:   

  • McDonald’s CEO Jim Skinner is retiring after almost 8 yrs at helm, to be succeeded by COO Don Thompson
  • Bats Global Markets will seek more than $100m for owners today, plans to sell 6.3m shrs at $16-$18 each
  • Abstracts for EASL’s International Liver Congress may be
  • released on embargo
  • Chinese manufacturing index indicated a worse contraction this month; prelim. 48.1 reading in a purchasing managers’ index is the lowest since Nov.
  • Sony said to tap Studio Chief Lynton to oversee U.S. media units
  • Former Fed Chairman Paul Volcker says U.S. needs reforms in financial sector, govt.
  • Nomura said to be involved in Inpex insider-trading breach
  • American Airlines said to plan to start a bankruptcy-court process for rejecting union contracts by next week
  • Euro-area services, manufacturing output contracted more than economists forecast in March
  • Hartford fails to satisfy holder John Paulson with plan to shrink insurer
  • Vantiv raised $500m in IPO at mid-point of price range 

EARNINGS:

    • IHS (IHS) 6 a.m., $0.82
    • Dollar General (DG) 7 a.m., $0.82
    • Lululemon Athletica (LULU) 7:15 a.m., $0.49
    • ConAgra Foods (CAG) 7:30 a.m., $0.48
    • FedEx (FDX) 7:30 a.m., $1.35
    • Signet Jewelers Ltd (SIG) 7:30 a.m., $1.77
    • GameStop (GME) 8:30 a.m., $1.72
    • Accenture (ACN) 4 p.m., $0.86
    • Steelcase (SCS) 4:01 p.m., $0.14
    • Micron Technology (MU) 4:04 p.m., $(0.19)
    • Nike (NKE) 4:15 p.m., $1.17
    • Silver Wheaton (SLW CN) 5 p.m., $0.40 

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)


OIL – probably the only good news this morning is that Oil stopped going up. We sold our long Oil position and took our asset allocation to Commodities to 0% because the US Dollar looks like it could put on a big move to the upside again. Immediate-term support lines that broke for WTIC and Brent are $106.79 and $124.89, respectively. 

  • Newedge Says Soy Beats Corn as Cekander Talks Seeds: Commodities
  • Copper Reaches Two-Week Low as Chinese Manufacturing Contracts
  • Gold Drops to Lowest Since January on Manufacturing, U.S. Dollar
  • Crude Declines on Stockpile Release Speculation, China Slowdown
  • Iran Seeking to Import Farm Commodities From India, Group Says
  • Sugar Erases Gains in New York Trading After Rising 0.8%
  • China Grain Output May Have Been Overstated, Imports to Rise
  • England Tsunami Risk Swells Costs at EDF After 40% Slump: Energy
  • Sinofert Has Been in Potash Acquisition Talks, CEO Feng Says
  • Gold Tax Aids Rupee as Deficit Fight Spurs Strike: India Credit
  • Vale, Rio, BHP to Join China’s Spot Iron Ore Platform
  • Water Scarcity to Fuel Global Tensions, Intelligence Report Says
  • BHP Leading Record Foreign-Currency Bond Sales: Australia Credit
  • Crude Futures Decline on Stockpile Release
  • European Crops Damaged by Winter Freeze Now Face Drought Risk
  • H.K. Mercantile Bourse Plans RMB Gold, Silver, Copper Contracts
  • Jewelers in North, East India Continue Strike Over Gold Tax

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CURRENCIES

 

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EUROPEAN MARKETS


SPAIN – Growth Slowing was the most obvious message for the PMI reports across Europe for the month of March. Central Planners can arrest stock market deflations in the short-term, but in the long-run, their ideas to stop economic gravity are dead. Spain’s IBEX remains bearish across all 3 of our risk management durations (down -1.5% this morn).

 

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ASIAN MARKETS


INDIA – Energy stocks (XLE) stopped making higher-YTD-highs on Feb 24 and India stopped going up on Feb 21; this morning India’s Sensex was down another -1.8% on fundamentals (Growth Slowing As Inflation Accelerates) and is down over 6% from its YTD high. India’s Yield Curve has pancaked.

 

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MIDDLE EAST


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The Hedgeye Macro Team