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
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
CURRENCIES
EUROPEAN MARKETS
ASIAN MARKETS
MIDDLE EAST
The Hedgeye Macro Team