TODAY’S S&P 500 SET-UP – April 16, 2012
As we look at today’s set up for the S&P 500, the range is 39 points or -1.55% downside to 1349 and 1.29% upside to 1388.
SECTOR AND GLOBAL PERFORMANCE
EQUITY SENTIMENT:
- ADVANCE/DECLINE LINE: on 4/13 NYSE -1577
- Down from the prior day’s trading of 1933
- VOLUME: on 4/13 NYSE 770.99
- Increase versus prior day’s trading of 1.89%
- VIX: as of 4/13 was at 19.55
- Increase versus most recent day’s trading of 13.66%
- Year-to-date decrease of -16.45%
- SPX PUT/CALL RATIO: as of 04/13 closed at 1.98
- Decrease from the day prior at 2.11
CREDIT/ECONOMIC MARKET LOOK:
BOND YIELDS – 10yr UST yields snapping our intermediate-term TREND line of 2.03% last week is very bullish for Treasuries until it isn’t. This happened in conjunction with a spike in weekly jobless claims (380,000) = Growth Slowing.
- TED SPREAD: as of this morning 38
- 3-MONTH T-BILL YIELD: as of this morning 0.08%
- 10-Year: as of this morning 1.98
- Unchanged from prior day’s trading of 1.98
- YIELD CURVE: as of this morning 1.71
- Decrease from prior day’s trading at 1.72
MACRO DATA POINTS (Bloomberg Estimates):
- 8:30am: NOPA Monthly Oil, Soybean capacity
- 8:30am: Empire Manufacturing, April, est. 18.00 (prior 20.21)
- 8:30am, Retail Sales, March, est. 0.3% (prior 1.1%)
- 9am: TIC Flows, Feb., est. total net $30b (prior $18.8b)
- 10am: Business Inventories, Feb., est. 0.6% (prior 0.7%)
- 10am: NAHB Housing Market Index, April, est. 28 (prior 28)
- 11:30am: Treasury selling $30b 3-mo., $28b 6-mo.
- 12:30pm: Fed’s Pianalto speaks in Lexington, Kentucky on banking, economy
- 3:30pm: Fed’s Bullard speaks at Utah State University on the economy and monetary policy
GOVERNMENT:
- President Obama says accusations against Secret Service agents need thorough investigation
- Senate holds test vote on “Buffett Rule” tax proposal
- Arizona primary for Gabrielle Giffords’s congressional seat
- U.S. House Oversight Committee Chairman Darrell Issa, R- Calif., holds hearing about “wasteful spending” by GSA, 1:30pm
- U.S. Congress returns from two-week Easter recess
- Supreme Court in session
WHAT TO WATCH:
- Retail sales may have gained 0.3% in March, economists est., indicating gasoline prices may have limited impact on spending
- World Bank may select next president; U.S. nominee Jim Yong Kim favored after rival candidate Jose Antonio Ocampo withdrew
- Goldman Sachs said to raise $2.5b selling ICBC shrs
- Carlyle Group said seeking to raise up to $762.5m in IPO; prospectus may be filed as soon as today
- China’s decision to double the scope of daily yuan moves may spur demand for renminbi bonds in Hong Kong
- FCC seeks $25,000 fine from Google for not cooperating with probe into collection of personal data over wireless networks
- Oracle, Google patent trial scheduled to begin today with jury selection; opening statements tomorrow
- Hon Hai, Pegatron Get Apple iPad Mini Order, Commercial Times reports
- Vestas Wind Systems jumped after a Danish newspaper reported two Chinese competitors are considering a possible bid
- Anheuser-Busch InBev said to be nearing an agreement to gain control of Cerveceria Nacional Dominicana
- GDF Suez agreed to buy 30% of International Power it doesn’t already own for $10b
- Citigroup, JP Morgan, other banks release monthly credit- card data; Discover announced last week
- IRS filing deadline for individual tax returns is Tuesday
EARNINGS:
- Mattel (MAT) 6 a.m., $0.07
- M&T Bank (MTB) 7:51 a.m., $1.49
- Citigroup (C) 8 a.m., $1.02
- Gannett (GCI) 8:15 a.m., $0.31
- Charles Schwab (SCHW) 8:45 a.m., $0.15
- Lincare Holdings (LNCR) 4:30 p.m., $0.53
- Brown & Brown (BRO) 4:54 p.m., $0.33
- Equity Lifestyle Properties (ELS) 8 p.m., no est.
COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)
COMMODITIES – getting blasted ever since the US Dollar stopped going down (2wks ago); got interconnectedness? We call this Deflating The Inflation, or unwinding Bernanke’s Bubbles (commodity bubble – see our slide deck). Gold and Copper down hard this morning after failing at $1675 and $3.73 levels of support last week – both are in Bearish Formations (bearish on all 3 of our risk management durations).
- Speculators Cut Wagers Most in 2012 as Growth Slows: Commodities
- Commodity ‘Super Cycle’ May Be Coming to End, Citigroup Says
- Corn, Wheat Drop on Slower China Growth, European Debt Concerns
- Oil Declines a Second Day in New York After Iran Nuclear Talks
- Gold Declines in London as Stronger Dollar Cuts Investor Demand
- Sugar Falls to Three-Month Low on Brazil’s Crop; Coffee Declines
- Copper Trades Little Changed at $7,980 a Ton; Aluminum Climbs
- Mongolia Starts Share Sale Process for State-Owned Coal Company
- Copper May Gain 20% on China Industrial Demand: Chart of the Day
- Funds Cut Bullish Gasoline Bets as Prices Slide: Energy Markets
- Conoco Fattest U.S. Dividend Offers 4% Income Not Growth: Energy
- U.S. Auto Rebound Fuels 14% Great Lakes Cargo Increase: Freight
- Japanese Utilities Use Record LNG Last Year on Idle Reactors
- Speculators Cut Bets Most in 2012 on China
- Commodities Extend Drop on European Crisis, Slower Asian Growth
- Copper May Fall to $7,448 a Ton on Fibonacci: Technical Analysis
- China to Overtake U.S. as Biggest Tanker User: Chart of the Day
CURRENCIES
EUROPEAN MARKETS
EUROPE – the DAX is testing an intermediate-term TREND line breakdown of the 6614, so I’ll be watching that line closely as a barometer for what the correction in US stocks could look like (Germany’s jobs and fiscal situation is stronger than in the US); Spain and Italy look awful; we re-shorted France on Thursday as we think mean reversion there is to the downside.
ASIAN MARKETS
MIDDLE EAST
The Hedgeye Macro Team
