THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – April 2, 2012


As we look at today’s set up for the S&P 500, the range is 12 points or -0.32% downside to 1404 and 0.53% upside to 1416. 

 

SECTOR AND GLOBAL PERFORMANCE

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EQUITY SENTIMENT: 

  • ADVANCE/DECLINE LINE: 473 (1135) 
  • VOLUME: NYSE 966.39 (18.23%)
  • VIX:  15.50 0.13% YTD PERFORMANCE: -33.76%
  • SPX PUT/CALL RATIO: 2.63 from 1.49 (76.51%) 

CREDIT/ECONOMIC MARKET LOOK:


PMI’s – China had two (1 beat, 1 missed – they probably made up both), but the rest of the world’s PMI prints (other than the UK’s, which beat by a 1 pt) were awful. Germany in particular was bad, down to 48.4 vs 50.2 in FEB (France = 46.7 vs 50 in FEB and Spain was nasty at 44.5); India’s missed too. #GrowthSlowing, globally.

BOND YIELDS – they’ve been the front runner in signaling Spanish credit problems and US Growth Slowing – no need to ignore that until they stop calling the broader intermediate-term TRENDS. UST 10yr yields failed at TAIL line resistance of 2.47% 3 weeks ago and are currently trading 2.22% (below immediate-term TRADE resistance of 2.26%). 

  • TED SPREAD: 40.20
  • 3-MONTH T-BILL YIELD: 0.07%
  • 10-Year: 2.21 from 2.21
  • YIELD CURVE: 1.87 from 1.88 

MACRO DATA POINTS (Bloomberg Estimates):

  • 10am: Construction Spending (M/m), Feb., est. 0.7% (prior - 0.1%)
  • 10am: ISM Manufacturing., Mar., est. 53.0 (prior 52.4)
  • 10am: Fed’s Bullard’s Tsinghua University remarks from last week will be released
  • 11:30am: U.S. to sell $31b 3-mo., $29b 6-mo. bills
  • 12:35pm: Fed’s Pianalto speaks in Ohio

 GOVERNMENT:

    • Canada’s prime minister, Mexico’s president visit President Obama
    • International Trade Commission announces status of finding that cleared Julius Glatz GmbH of infringing Schweitzer- Mauduit  International patents
    • House, Senate on recess 

WHAT TO WATCH: 

  • Manufacturing probably climbed to 53 in March from 52.4 in Feb., economists said before a report today
  • Express Scripts, Medco may be approved by regulators as early as this week
  • China’s Purchasing Managers’ Index rose to 53.1 in March from 51 the previous month, a 1-yr high
  • European finance ministers unveiled a package over the weekend including $667b in fresh bailout funds
  • Euro-area Feb. unemployment rate rises to 10.8%, highest in 14+ yrs, est. 10.8%
  • Pinnacle Airlines sought bankruptcy protection
  • Groupon’s latest restatement heightens concern about the reliability of the company’s financial reporting: analysts
  • Enterprise Products asking federal regulators for the freedom to set rates on its Seaway pipeline
  • Global Payments says card breach affected fewer than 1.5m numbers
  • Republican presidential contests take place tomorrow in Wisconsin, Maryland, Washington, D.C.
  • Yahoo! is preparing to start layoffs of potentially thousands of employees next week: AllThingsD
  • No IPOs scheduled: Bloomberg data  

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)


GOLD – under pressure again this morning which surprises us given that bond yields stopped going down; Gold has had issues when Commodities broadly weaken – both the CRB Index and Gold are trading below their intermediate-term TREND lines of 312 and $1692, respectively. That’s new. Deflating The Inflation = in motion. 

  • Speculators Trimming Wagers as Goldman Goes Neutral: Commodities
  • Corn Rises for Second Day Following Decline in U.S. Stockpiles
  • Copper May Rise as Gauge of Chinese Manufacturing Strengthens
  • Oil Rises a Second Day as China Economy Boosts Demand Outlook
  • Gold May Decline in London as Indian Strike Cuts Physical Demand
  • Robusta Coffee Rises, Lifted by Contract Delivery; Sugar Drops
  • Gold Imports by India Plunge in March After Industry Shutdown
  • S&P 500 Beating Gold Most Since 1999 as Earnings Estimates Rise
  • Palm Oil Rallies to Highest in a Year on U.S. Soybean Forecast
  • Petronas Plans Canadian Acquisition Topping $5 Billion: Energy
  • Molycorp Seen Too Cheap as Rare Earth Lures Deal Talk: Real M&A
  • Petronas Struggles to Replace Iranian Crude for Durban Refinery
  • PetroChina’s Oil Output Trumps Exxon, Rosneft: Chart of the Day
  • Copper May Extend Best Quarter Since 2010
  • Jewelers in India Strike for 17th Day Over Higher Gold Tax
  • Sino-Forest Glimpse Made Buyers Run Away: Corporate Canada
  • Funds Cut Bullish Gas Bets as Supply Glut Grows: Energy Markets

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CURRENCIES

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EUROPEAN MARKETS


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ASIAN MARKETS

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MIDDLE EAST


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The Hedgeye Macro Team