TODAY’S S&P 500 SET-UP – April 4, 2012
As we look at today’s set up for the S&P 500, the range is 25 points or -1.80% downside to 1388 and -0.03% upside to 1413.
SECTOR AND GLOBAL PERFORMANCE
EQUITY SENTIMENT:
- ADVANCE/DECLINE LINE: -889 (-2415)
- VOLUME: NYSE 817.21 (7.05%)
- VIX: 15.66 0.13% YTD PERFORMANCE: -33.08%
- SPX PUT/CALL RATIO: 1.67 from 1.86 (-10.22%)
CREDIT/ECONOMIC MARKET LOOK:
- TED SPREAD: 39.28
- 3-MONTH T-BILL YIELD: 0.08%
- 10-Year: 2.24 from 2.30
- YIELD CURVE: 1.90 from 1.93
MACRO DATA POINTS (Bloomberg Estimates):
- 7am: MBA Mortgage Applications, week of Mar. 30 (prior - 2.7%)
- 7:45am: ECB rate decision, press conference 8:30am
- 8:15am: ADP Employment Change, March, est. 206k (prior 216k)
- 10:00am: ISM Non-Manf. Comp, March, est. 56.8 (prior 57.3)
- 10:30am: DoE inventories
- 11:00am: Fed’s Williams speaks in San Francisco
GOVERNMENT/POLITICS:
- President Obama hosts Easter prayer breakfast
- Rick Santorum holds press conference with Rep. Tim Murphy, R-Pa., in Irwin, Pa. 11am
- Mitt Romney speaks at American Society of Newspaper Editors conference in Washington, 11:30am
- Obama signs “Stop Trading on Congressional Knowledge (STOCK) Act.” 11:50am
- Treasury Secretary Geithner speaks at Economic Club of Chicago at 8am breakfast meeting, later tours Ford’s Chicago Stamping Plant at 12:15pm
WHAT TO WATCH:
- Burger King, taken private in 2010, to go public again after merging with a co. owned by William Ackman
- European Central Bank will keep interest rates at record low 1%: Bloomberg survey
- Mitt Romney won Republican primaries in Wisconsin, Maryland, Washington D.C.
- JP Morgan may settle CFTC case this week over role in collapse of Lehman Brothers, pay fine $20m, NYT says
- Spain sells EU2.59b in bonds, maximum tgt EU3.5b
- New York International Auto Show begins; Nissan to introduce new Altima
- Fiat shareholders meet to discuss share conversion, making it easier for Fiat to fully merge with Chrysler
- Major League Baseball opening night
- Amylin should pursue a sale process to let shareholders decide the co.’s fate, said Carl Icahn, its 3rd-largest investor
- Service industries probably expanded in March, economists est.
- Facebook accused Yahoo of infringing 10 patents; Yahoo had sued Facebook last month
- GE debt rating cut as Moody’s to Aa3, cites finance unit’s funding risks
- WellCare to pay $137.5m to settle false claims lawsuits
- Sears Chairman Edward Lampert appears on CNBC, 7am; also watch AZO
EARNINGS:
- MSC Industrial Direct Co (MSM) 7:30 a.m., $0.95
- Monsanto (MON) 8 a.m., $2.12
- Acuity Brands (AYI) 8:19 a.m., $0.62
- Schulman (SHLM) 4:01 p.m., $0.44
- Ruby Tuesday (RT) 4:02 p.m., $0.16
- AngioDynamics (ANGO) 4:04 p.m., $0.08
- Bed Bath & Beyond (BBBY) 4:15 p.m., $1.32
- Harry Winston Diamond (HW CN) Post-Mkt, $0.18
- Pricesmart (PSMT) Post-Mkt, $0.68
COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)
- England Challenges China by Reviving Strategic Mine: Commodities
- Gold Falls for Second Day as Fed Stimulus Stance Lifts Dollar
- Copper Falls for Second Day on Reduced Stimulus Expectations
- Monsoon Rain in India Seen More Than Normal for Third Year
- Oil Falls a Second Day on Supplies, Signs Fed May Halt Stimulus
- Wheat Declines as Rains in U.S., Russia Improve Crop Prospects
- JPMorgan Dealmaker Hannam in Eye of Storm Again With FSA Fine
- LME May Get Up to $54 Million in Sale of LCH.Clearnet Stake
- Silver Wheaton Seeks to Quadruple Output: Corporate Canada
- Palm Oil Rallies to One-Year High as Demand May Gain From China
- Gasoline Tops Commodities as Iran Spurs Oil Gain: Energy Markets
- KGHM Seen Joining Mine Debt Boom With Debut Bonds: Poland Credit
- Rare Earth Supplies in U.S. to Meet Defense Needs, Pentagon Says
- Oil Falls on Signs Fed May Halt Stimulus
- Rubber Declines for Second Day as Expectations for Stimulus Fade
- Trash Worth $40 Billion When Saved From Waste Landfill: Energy
- BHP, Rio Combined Diamond Asset Might Be Attractive, Nomura Says
CURRENCIES
US DOLLAR – Bernanke’s Bubbles are vast. All we need to see is the confluence of UST yields rising alongside the USD and Gold will come down in a hurry. Intense selling in the last 48hrs in Gold and Silver. Bernanke’s War is on. Remember, we’re explicitly fighting the Fed having a 0% asset allocation to Commodities and Treasuries right now.
EUROPEAN MARKETS
GERMANY – first immediate-term TRADE line break in the DAX too (line was 6998), and the correction in German Equities is now -3.8% from the YTD peak (so keep that in mind with the SP500 only -0.4% from its YTD no-volume high). German economic data, like the rest of the world’s, has slowed sequentially in the last 6 weeks.
ASIAN MARKETS
JAPAN – top question from clients is when does the sovereign debt crisis in Japan find its way into equities. Answer: after currencies. The Nikkei finally snapped its immediate-term TRADE line of 10,105 support last night, trading down a stiff -2.3%, taking its correction to -4% from its March high (to put the asymmetry of the SP500 in context, the US has only had 1 down day of more than -0.7% YTD).
MIDDLE EAST
The Hedgeye Macro Team