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TODAY’S S&P 500 SET-UP – April 11, 2012


As we look at today’s set up for the S&P 500, the range is 41 points or -0.85% downside to 1347 and 2.39% upside to 1391. 

                                            

SECTOR AND GLOBAL PERFORMANCE

THE HEDGEYE DAILY OUTLOOK - 1

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EQUITY SENTIMENT:


VOLATILITY – so you’re saying it’s the 1990’s, eh? Right, right. Since the Russell2000 and the CRB Index topped on the same day (March 26th), the US Equity VIX is up +43% in a straight line. Buying anything equities/commodities/big beta at 14-15 VIX has not worked since 2008. 

  • ADVANCE/DECLINE LINE: on 4/10 NYSE -2133
    • Down from the prior day’s trading of -1747
  • VOLUME: on 4/10 NYSE 972.15
    • Increase versus prior day’s trading of +34.17%
  • VIX:  as of 4/10 was at 20.39
    • Increase versus most recent day’s trading of +8.40%
    • Year-to-date decrease of -12.86%
  • SPX PUT/CALL RATIO: as of 04/10 closed at 1.52
    • Decrease from the day prior at 2.10 

CREDIT/ECONOMIC MARKET LOOK:


TREASURIES – 10yr bond yield snapping our intermediate-term TREND line of 2.03% support this morning and the Yield Spread continues to compress (down 24bps in 3 wks). This is what we call Growth Slowing being priced into Equities, Commodities, and Bonds. You should have taken that Credit Suisse call to “buy stocks b/c bond yields are rising” and done the opposite. 

  • TED SPREAD: as of previous day trading 39
  • 3-MONTH T-BILL YIELD: as of this morning 0.08%
  • 10-Year: as of this morning 2.01
    • Up from the prior day 1.98
  • YIELD CURVE: as of this morning 1.72
    • Increase from prior day’s trading at 1.70 

MACRO DATA POINTS (Bloomberg Estimates):

  • 7am: MBA Mortgage Applications, week of Apr. 6 (prior 4.8)
  • 7:30am: Atlanta Fed’s Lockhart to discuss economy at Stone Mountain, Georgia
  • 8:20am: Lockhart gives welcome remarks at Atlanta Fed conference on financial reform in Stone Mountain
  • 8:30am: Import Price Index (M/m), Mar., est. 0.8% (prior 0.4%)
  • 9:30am: Kansas City Fed’s Esther George speaks at conference on debt, deficits, financial instability in New York
  • 10:30am: Boston Fed’s Rosengren speaks as part of panel at Atlanta Fed conference on financial reform in Stone Mountain
  • 10:30am: DOE inventories
  • 1pm: U.S. to sell $21b 10-yr notes (reopening)
  • 2pm: Fed Beige Book
  • 2pm: Monthly Budget Statement, Mar., est. -$196b (prior -$188.2b)
  • 4pm: St Louis Fed’s Bullard meets with reporters before lecture at St Louis Fed
  • 5pm: Bullard delivers welcoming remarks for lecture at St. Louis Fed
  • 5:30pm: Fed Board’s Yellen speaks on economic outlook, policy before Money Marketeers of New York University 

GOVERNMENT:

    • Mitt Romney holds campaign events in Connecticut, Rhode Island
    • Secretary of State Hillary Clinton hosts G-8 foreign ministers discussion at Blair House in Washington. 11:45am

WHAT TO WATCH:

  • Oaktree Capital, Aleris, Brightsource Energy among IPOs expected to price as most capital may be raised in 13 months
  • Swiss court rejects U.S. push on disclosure of Credit Suisse client’s data
  • Carlyle said to seek IPO value of as much as $8b
  • Las Vegas Sands plans to spend $35b building Spanish gambling resorts over next 9 yrs
  • Japan machinery orders unexpectedly rise in recovery boost
  • China March car sales rise 4.5% on widening discounts
  • Prepaid card  use rose by about 18% in 2011 as consumers dropped traditional banking products: Javelin Strategy
  • Romney holds campaign events in Connecticut, Rhode Island day after Rick Santorum leaves race
  • Carl Icahn set deadline for today for Amylin to respond to his request for books, records 

     EARNINGS:

    • Astral Media (ACM/A CN) 7:25 a.m., $0.66
    • Dollarama (DOL CN) 7:30 a.m., $0.69
    • Adtran (ADTN) 8 p.m., $0.20 

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • Wheat Seen Declining as Stockpiles Expand to Record: Commodities
  • Oil Rises From Eight-Week Low as ECB Signals Support for Spain
  • Corn, Wheat Gain on Rising China Demand Prospects; Soybeans Drop
  • Gold May Decline as Some Investors Sell Amid Europe Debt Concern
  • Copper Rises as Chinese Car Sales, Japanese Orders Top Estimates
  • Billionaire’s India Strategy Dims as Oil Deal Deadlocked: Energy
  • France Remains ‘Open’ to Oil Stockpile Release, Besson Says
  • Indonesia Asahan Aluminium Smelter Unaffected by Earthquake
  • Rubber Declines to Two-Month Low as European Crisis Saps Demand
  • Kenyans Almost Dead on Worst Roads Getting New Highways: Freight
  • U.S. Beef Sales to Japan May Gain 24%, Exporter Group Says
  • Alcoa Posts Surprise Profit After Aluminum Orders Increase
  • Soybean Key Reversal Signals 8.9% Price Drop: Technical Analysis
  • Gold May Decline Amid European Debt Concern
  • China’s Aluminum Demand to Grow at 8-10% Annually, Novelis Says
  • Sugar Output in India to Drop for First Time in Four Years
  • Japan’s Zinc Consumption May Climb to 4-Year High, Mitsui Says

THE HEDGEYE DAILY OUTLOOK - 4

CURRENCIES

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EUROPEAN MARKETS


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ASIAN MARKETS


JAPAN – what goes up on no fundamentals comes down hard – Japanese Equities down for 8 consecutive days for a -8% cumulative correction – and unless your major country index has AAPL in it, that’s pretty much the range of corrections across the world in the last 6 weeks = -7-9% (Hong Kong, Germany, Russia, Brazil, Russell2000, etc).

THE HEDGEYE DAILY OUTLOOK - 7

 

 

MIDDLE EAST


THE HEDGEYE DAILY OUTLOOK - 8

The Hedgeye Macro Team