THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – April 9, 2012


As we look at today’s set up for the S&P 500, the range is 19 points or -0.79% downside to 1387 and 0.57% upside to 1406. 

                                            

SECTOR AND GLOBAL PERFORMANCE

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EQUITY SENTIMENT:


SP500 – our math says the SP500 closes higher than where the futures are trading, but it also says that a close below 1391 would be bearish if sustained – so wait/watch that line throughout the week as the inflation data domestically gets reported Wed-Fri (it will rise again sequentially) and earnings season, which will be one of the slowest growth ones in years, is upon us. 

  • ADVANCE/DECLINE LINE: -410 (1428) 
  • VOLUME: NYSE 719.28 (-13.60%)
  • VIX:  16.70 1.58% YTD PERFORMANCE: -28.63%
  • SPX PUT/CALL RATIO: 2.51 from 1.89 (32.80%) 

CREDIT/ECONOMIC MARKET LOOK:


BOND YIELDS – as far as 1-day moves go, Friday’s reaction in the 10yr was violent; now you have 10yr Treasuries yielding 2.06% (down 35bps in a month!) and the Yield Spread just compressed -14bps in 1-day, wow – just like that growth slowing gets marked to market before everyone thought they could get out. 

  • TED SPREAD: 39.79
  • 3-MONTH T-BILL YIELD: 0.07%
  • 10-Year: 2.06 from 2.05
  • YIELD CURVE: 1.74 from 1.74

MACRO DATA POINTS (Bloomberg Estimates):

  • 11:30am: U.S. to sell $31b 3-mo., $29b 6-mo. bills
  • 7:15pm: Fed Chairman Ben Bernanke speaks on economic stability at Atlanta Fed conference 

GOVERNMENT:

    • President Obama hosts Brazilian President Dilma Rousseff at White House
    • Newt Gingrich says Mitt Romney “far and away” most likely candidate to win the Republican nomination, said on “Fox News Sunday” will endorse Romney if gets majority of delegates 

WHAT TO WATCH:

  • AT&T says talks with CWA continue after labor contracts expire
  • China’s March consumer prices rose 3.6% Y/y, more than median 3.4% est. in Bloomberg News survey
  • March’s setback in hiring will prove temporary as U.S. economy, in 3rd yr of expansion, is better equipped to overcome a slowdown in Europe, rising fuel costs, economists said
  • Monthly casino results from Las Vegas, Atlantic City expected early this week
  • Great Wolf Resorts got $7/shr cash, or $234m, takeover offer from KSL Capital that tops Apollo a 2nd time
  • Sony to cut ~10k jobs, or 6% of its workforce: Nikkei
  • Global ad spending rose 6.2% Y/y in 4Q: Nielsen
  • European securities markets are closed, along with Hong Kong, Thailand, South Africa, Australia, New Zealand and Philippines
  • Abstracts released for American Urological Association annual mtg in Atlanta; watch for AGN’s Phase 3 Botox data
  • FDA briefing docs released for 4/11 advisory panel on closely held U-Systems’ Automated Breast Ultrasound 

EARNINGS:

    • Penford (PENX) 6am, $0.01
    • Greenbrier (GBX) 6am, $0.46
    • Zep (ZEP) 7:15am, $0.09
    • Healthcare Services Group (HCSG) 4:11pm, $0.14

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • Hedge Funds Cut Wagers as Fed Signals Less Stimulus: Commodities
  • Gold Gains on U.S. Jobs Data, Outlook for Stronger Asian Demand
  • Copper Drops on Speculation China Won’t Add Stimulus After Data
  • Soybeans Climb to Seven-Month High as Drought Pares Stockpiles
  • Lower U.S. Crop Reserves Raising Food Costs in Election Year
  • Palm Oil Declines From 13-Month High on Production Speculation
  • Rubber Declines for Fifth Day as China’s Inflation Accelerates
  • Royal Bank Chooses Court Battle With CFTC Over Wash Trades
  • Oil Drops Third Time in Four Days on Economy Concern, Iran Talks
  • Oil Bulls Retreat as U.S. Production Accelerates: Energy Markets
  • McDonald’s Pursuit of Perfect Fries Risks Exposing Flaws: Retail
  • Myanmar Seeks ‘More Carrots’ as U.S. Begins Sanctions Rollback
  • China May Be Cautious on Easing After Inflation Pickup: Economy
  • Funds Reduce Bullish Bets for Second Week
  • Phillips 66 Looks to Pipes to Blunt Refining Volatility: Energy
  • Worker Shortage Dogs Trail King as South Dakota Jobs Go Begging
  • Obama and Rousseff to Talk Energy and Trade at the White House

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CURRENCIES

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EUROPEAN MARKETS

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ASIAN MARKETS


CHINA – Dollar Debauchery (Bernanke on Jan 25th, pushing easy money to 2014) fired up commodity inflation sequentially in FEB/MAR, and accelerating inflation then slowed real growth, globally. Same model we have been using for 5yrs – China’s inflation data for MAR rises to 3.6% vs 3.4% FEB.

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MIDDLE EAST


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The Hedgeye Macro Team