TODAY’S S&P 500 SET-UP – April 3, 2012
As we look at today’s set up for the S&P 500, the range is 16 points or -0.92% downside to 1406 and 0.21% upside to 1422.
SECTOR AND GLOBAL PERFORMANCE
EQUITY SENTIMENT:
- ADVANCE/DECLINE LINE: 1516 (1043)
- VOLUME: NYSE 763.39 (-21.01%)
- VIX: 15.64 -0.90% YTD PERFORMANCE: -33.16%
- SPX PUT/CALL RATIO: 1.86 from 2.63 (-29.28%)
CREDIT/ECONOMIC MARKET LOOK:
INFLATION – inflation slows growth. Yesterday’s US Equity move was led by Basic Material and Energy stocks + the CRB Index was up 2x what the SP500 was. The Bond market agrees. The 10yr and the Yield Spread (10s – 2s) wouldn’t be down 3bps for the wk to date if US growth was still 2.5-3%).
- TED SPREAD: 40.72
- 3-MONTH T-BILL YIELD: 0.07%
- 10-Year: 2.17 from 2.18
- YIELD CURVE: 1.84 from 1.86
MACRO DATA POINTS (Bloomberg Estimates):
- 7:45am/8:55am: ICSC/Redbook weekly retail sales
- 9:45am: ISM New York, Mar., (prior 63.1)
- 10am: Factory Orders, Feb., est. 1.5% (prior -1.0%)
- 11:30am, U.S. to sell 4-week, $26b 52-week bills
- 2pm: Minutes of FOMC March 13 meeting released
- 4:05pm: Fed’s Williams participates in university symposium simulating FOMC meeting in San Diego
- 4:30pm: API weekly inventories
GOVERNMENT:
- Republicans hold presidential primaries in Wisconsin, Maryland, Washington, D.C.
- EIA Acting administrator Howard Gruenspecht speaks about gasoline supplies. 9:15am
- President Obama addresses Associated Press’s annual convention. Noon
- Treasury Secretary Timothy Geithner presides over FSOC mtg, vote on final rule regulating non-bank financial firms. 2:30pm
- Vice President Joe Biden answers questions via Twitter on college affordability. 3:45pm
- House, Senate not in session
WHAT TO WATCH:
- U.S. auto sales released today; March light-vehicle sales may have climbed to 14.5m seasonally adjusted annual rate; analysts
- Carl Icahn’s tender offer to acquire CVR Energy expired yday; Icahn said he wouldn’t extend unless 36% shrs tendered
- U.S. factory orders may have risen 1.5% in Feb., rebounding from a drop
- China eco. may have expanded ~8.4% in 1Q, the least since 1H of 2009, according to an est. given by an official 10 days before the data are due
- European producer prices rose 3.6% in yr, ahead of est. 3.5%
- Royal Bank of Canada sued by U.S. regulators over claims engaged in illegal futures trades worth hundreds of millions of dollars to garner tax benefits tied to equities
- Coty said to flip from seller to Avon buyer; yesterday went public with $10b offer that was rejected
- Cablevision accused NY Daily News publisher Mort Zuckerman of “a campaign of intimidation and extortion” to bring about a merger with Cablevision’s Newsday
- U.S. sales of repossessed properties probably will rise 25% this yr from 1m in 2011: Moody’s Analytics
- Olympus said it received capital alliance offers from Sony, Fujifilm Holdings and Terumo, may decide by next month
- IATA says outlook “fragile,” raises concerns about business travel growth
- Analyst says Roche to hold meeting this morning in New York after Illumina rejects offer
- Amazon.com is testing a service that lets tablet users make purchases through mobile applications
- SecondMarket said to hold its final auction of Facebook shares
EARNINGS:
- International Speedway (ISCA) 7am, $0.39
- Comverse Technology (CMVT) 7:30am, $0.17
COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)
- Arabica Premium Seen Higher on Robusta Supply Surge: Commodities
- Copper Retreats 0.6% to $8,590 a Ton on London Metal Exchange
- Copper May Drop as Higher Inventories Undermine Demand Outlook
- Oil Drops After Biggest Gain in Six Weeks on Outlook for Supply
- Palm Oil Rallies to One-Year High on Soybean Planting Concerns
- Gold May Fall in London on Concern Physical Buying Is Slowing
- Wheat Drops as Global Crop Prospects Improve; Corn Increases
- Sugar Falls in London for Second Day on Surplus; Cocoa Declines
- Australia LNG Boom Threatened by U.S. Shale Exporters: Energy
- India May Remain a Net Sugar Exporter for Third Year
- Fortescue’s Power Says China Steel Demand Will Be ‘Very Strong’
- Rusal Would Study Norilsk Sale at Right Price, New Chairman Says
- Pakistan Exchange to Begin Foreign-Currency Futures by June
- Tanker Rates Seen Reversing Rally as Oil Glut Expands: Freight
- Oil Drops After Biggest Gain in Six Weeks
- Oil Supplies Rise to Seven-Month High in Survey: Energy Markets
- Jewelers in India Extend Strike for 18th Day Over Higher Taxes
CURRENCIES
EUROPEAN MARKETS
ITALY – joins Spain this morning as the 2nd major Global Macro Equity market to snap its intermediate-term TREND line (15,961 was TREND support for the MIB Index). On a no volume rally in US Equities (down -17% vs my intermediate-term TREND avg yesterday), do not forget how bad those European PMI prints for March were yesterday.
ASIAN MARKETS
CHINA – explicit comments from Chinese central bank head Zhou this morning telling the Fed that Bernanke has a “responsibility to consider global effects” of its dollar debauchery policy. We called this Bernanke’s War last week and from a Global Macro perspective, it’s on. Japan just printed its lowest money supply number in 3yrs. Japanese Liquidity drying up.
MIDDLE EAST
The Hedgeye Macro Team