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THE HBM: MCD, DPZ, EAT, CAKE

THE HEDGEYE BREAKFAST MONITOR

 

HEDGEYE VIRTUAL PORTFOLIO POSITIONS

 

LONGS: JACK, SBUX

 

SHORTS:

 

MACRO NOTES

 

Commentary from CEO Keith McCullough

 

I believe my competitor at ISI is calling it a “Growth Problem Alert” today – we’ve been calling it #GrowthSlowing since Feb:

  1. GROWTH SLOWING – when we say that, we mean it globally. The words USA “de-coupling” is an Old Wall St word that has not worked in the last 5yrs. The world is as globally interconnected as it’s ever been and what policy does to the world’s reserve currency has very consequential impact on the intermediate-term slopes of growth and inflation.
  2. EUROPE – Spanish stocks are crashing again (down -23% since Growth Slowing started, globally in Feb – Hong Kong and India stock markets stopped going up in Feb too). The French Services PMI print for April was awful (46.1 vs 50.1 MAR) and Italian consumer confidence just hit a record low. Central planning not working. DAX snapping TREND support (6689).
  3. COPPER – the Doctor is getting tagged this morning, down -1.7% and in a Bearish Formation (bearish TRADE, TREND, and TAIL in our model). Commodity prices (or Bernanke’s Bubbles) look a lot like US Treasury Yields again. 10yr yield getting smoked to a fresh 2mth #GrowthSlowing low of 1.93%.

 Next SP500 support = 1356.

 

SUBSECTOR PERFORMANCE

 

THE HBM: MCD, DPZ, EAT, CAKE - subsector1

 

QUICK SERVICE

 

MCD: McDonald’s CEO Jim Skinner highlighted jobless claims during the conference call on Friday as being indicative of the soft macro environment.

 

DPZ: Domino’s holder Trian reported a passive stake of 4.4% down 7.2% in value at the end of 2011.

 

NOTABLE PERFORMANCE ON ACCELERATING VOLUME:

 

YUM: Yum Brands traded up 3.5% on accelerating volume. 

 

CMG: Chipotle traded down -2.7% on accelerating volume.

 

 

CASUAL DINING

 

EAT: Impressive numbers out of Brinker today.  3QFY12 EPS came in at $0.60 versus $0.56 consensus and company-owned comparable restaurant sales at Chili’s came in at 4.6% versus 2.3% consensus.  As the charts below illustrate, Chili’s made significant progress on the top line.  Two-year average trends improved significantly on a sequential basis despite the more difficult compare and lapping of the introduction of the lunch promotion in January 2011.  How much of that successful lapping was due to weather is the question of the day.  Any forward looking commentary from management pertaining to April trends will likely have a significant impact on where the stock ends up at the close today.  From what we know, it seems that traffic slowed over the duration of the quarter at Chili’s; traffic was up 1.8% for the quarter but March came in at +0.5%. 

 

THE HBM: MCD, DPZ, EAT, CAKE - chilis pod1

 

THE HBM: MCD, DPZ, EAT, CAKE - chilis comps detail

 

CAKE: Cheesecake Factory’s CEO, David Overton, was paid $4.1m for FY11, according to filings made with the SEC.  In 2010, he received $3.7m total compensation.

 

NOTABLE PERFORMANCE ON ACCELERATING VOLUME:

 

CBRL: Cracker Barrel bounced back after a soft day’s trading on Thursday.  Shareholder Sardar Biglari is trying to shake things up at the company.  Friday the stock closed above Thursday’s high.

 

BJRI: BJ’s Restaurants traded down on accelerating volume on Friday.  The stock received an upgrade on April 12thbut has sold off since. 

 

THE HBM: MCD, DPZ, EAT, CAKE - stocks

 

 

Howard Penney

Managing Director

 

Rory Green

Analyst

 


MONDAY MORNING RISK MONITOR: FRENCH BANK SWAPS, THE BANE OF 2H11, ARE MOVING HIGHER AGAIN

Key Takeaways:

* Spanish and Italian swaps continue to rule the day with Italian swaps, in particular, climbing higher. Italy's sovereign CDS climbed 31 bps vs. last week to 473 bps and are now almost in-line with Spanish sovereign CDS (510 bps, down 12 bps week over week). Meanwhile, French and German CDS widened by 15 and 12 bps, respectively on concerns around the ongoing deterioration in economic conditions across the Continent, and expectations that the bailout will further encumber both countries. French elections are adding further uncertainty to the economic outlook. 

 

* US financial companies saw their swaps mostly tighten, with the notable exception of Genworth (GNW), which postponed the IPO plans for its Australian mortgage insurance unit to early 2013 from 2Q12. Swaps on GNW rose 140 bps week over week. Among the large cap US Financials, only Morgan Stanley (MS) is currently trading above 300 bps (366 bps, down 13 bps week-over-week).

 

* EU financial companies were mixed last week, but French banks saw their swaps widen noticeably. BNP Paribas (+25 bps to 263 bps), Credit Agricole (+31 bps to 320 bps), Societe Generale (+24 bps to 339 bps) all widened meaningfully. Recall that it was concern around the counterparty exposure to French banks in 2H11 that principally weighed on US banks, so it's interesting to note the current, short-term divergence.

 

Financial Risk Monitor Summary

• Short-term(WoW): Positive / 3 of 12 improved / 1 out of 12 worsened / 8 of 12 unchanged  

• Intermediate-term(WoW): Negative / 3 of 12 improved / 4 out of 12 worsened / 5 of 12 unchanged  

• Long-term(WoW): Neutral / 3 of 12 improved / 3 out of 12 worsened / 6 of 12 unchanged

 

MONDAY MORNING RISK MONITOR: FRENCH BANK SWAPS, THE BANE OF 2H11, ARE MOVING HIGHER AGAIN - summary 2

 

1. US Financials CDS Monitor – Swaps tightened for 19 of 26 major domestic financial company reference entities last week. While trend was overall positive, there were notable negative divergences like Genworth (GNW).  

Tightened the most WoW: C, COF, ACE.

Widened the most WoW: MTG, RDN, GNW.

Tightened the most MoM: AXP, COF, MBI.

Widened the most MoM: BAC, MS, GNW.

 

MONDAY MORNING RISK MONITOR: FRENCH BANK SWAPS, THE BANE OF 2H11, ARE MOVING HIGHER AGAIN - 4 23 2012 8 04 04 AM US CDS 3

 

2. European Financials CDS Monitor – Bank swaps were wider in Europe last week for 23 of the 39 reference entities. The average widening was 0.3% and the median widening was 4.2%. French banks, in particular, saw their default probabilities rise notably week over week.

 

MONDAY MORNING RISK MONITOR: FRENCH BANK SWAPS, THE BANE OF 2H11, ARE MOVING HIGHER AGAIN - 4 22 2012 EURO CDS

 

3. European Sovereign CDS European Sovereign Swaps mostly widened over last week. Portuguese sovereign swaps tightened by 6.4% (-71 bps to 1036 ) and German sovereign swaps widened by 15.6% (12 bps to 88).

 

MONDAY MORNING RISK MONITOR: FRENCH BANK SWAPS, THE BANE OF 2H11, ARE MOVING HIGHER AGAIN - Sov Table

 

MONDAY MORNING RISK MONITOR: FRENCH BANK SWAPS, THE BANE OF 2H11, ARE MOVING HIGHER AGAIN - Sovereign CDS 1

 

MONDAY MORNING RISK MONITOR: FRENCH BANK SWAPS, THE BANE OF 2H11, ARE MOVING HIGHER AGAIN - Sovereign CDS 2

 

4. High Yield (YTM) Monitor – High Yield rates were roughly flat last week, ending at 7.37.

 

MONDAY MORNING RISK MONITOR: FRENCH BANK SWAPS, THE BANE OF 2H11, ARE MOVING HIGHER AGAIN - HY

 

5. Leveraged Loan Index Monitor – The Leveraged Loan Index rose 5.3 points last week, ending at 1656.

 

MONDAY MORNING RISK MONITOR: FRENCH BANK SWAPS, THE BANE OF 2H11, ARE MOVING HIGHER AGAIN - LLI

 

6. TED Spread Monitor – The TED spread rose 1.5 points last week, ending the week at 39.70 this week versus last week’s print of 38.23.

 

MONDAY MORNING RISK MONITOR: FRENCH BANK SWAPS, THE BANE OF 2H11, ARE MOVING HIGHER AGAIN - TED spread

 

7. Journal of Commerce Commodity Price Index – The JOC index fell 1.5 points, ending the week at -10.13 versus -8.7 the prior week.

 

MONDAY MORNING RISK MONITOR: FRENCH BANK SWAPS, THE BANE OF 2H11, ARE MOVING HIGHER AGAIN - JOC

 

8. Euribor-OIS spread – The Euribor-OIS spread (the difference between the euro interbank lending rate and overnight indexed swaps) measures bank counterparty risk in the Eurozone. The OIS is analogous to the effective Fed Funds rate in the United States.  Banks lending at the OIS do not swap principal, so counterparty risk in the OIS is minimal.  By contrast, the Euribor rate is the rate offered for unsecured interbank lending.  Thus, the spread between the two isolates counterparty risk. The Euribor-OIS spread tightened by 1 bps to 40 bps.

 

MONDAY MORNING RISK MONITOR: FRENCH BANK SWAPS, THE BANE OF 2H11, ARE MOVING HIGHER AGAIN - Euribor OIS

 

9. ECB Liquidity Recourse to the Deposit Facility – The ECB Liquidity Recourse to the Deposit Facility measures banks’ overnight deposits with the ECB.  Taken in conjunction with excess reserves, the ECB deposit facility measures excess liquidity in the Euro banking system.  An increase in this metric shows that banks are borrowing from the ECB.  In other words, the deposit facility measures one element of the ECB response to the crisis.  

 

MONDAY MORNING RISK MONITOR: FRENCH BANK SWAPS, THE BANE OF 2H11, ARE MOVING HIGHER AGAIN - ECB

 

10. Markit MCDX Index Monitor – The Markit MCDX is a measure of municipal credit default swaps. We believe this index is a useful indicator of pressure in state and local governments. Markit publishes index values daily on six 5-year tenor baskets including 50 reference entities each. Each basket includes a diversified pool of revenue and GO bonds from a broad array of states. We track the 14-V1. Last week spreads widened nominally, ending the week at 120 bps versus 119 bps the prior week.

 

MONDAY MORNING RISK MONITOR: FRENCH BANK SWAPS, THE BANE OF 2H11, ARE MOVING HIGHER AGAIN - MCDX 2

 

11. Baltic Dry Index – The Baltic Dry Index measures international shipping rates of dry bulk cargo, mostly commodities used for industrial production. Higher demand for such goods, as manifested in higher shipping rates, indicates economic expansion. Last week the index rose 95 points, ending the week at 1067 versus 972 the prior week.

 

MONDAY MORNING RISK MONITOR: FRENCH BANK SWAPS, THE BANE OF 2H11, ARE MOVING HIGHER AGAIN - Balticc Dry

 

12. 2-10 Spread – We track the 2-10 spread as an indicator of bank margin pressure.  Last week the 2-10 spread tightened to 170 bps, 2 bps tighter than a week ago.

 

MONDAY MORNING RISK MONITOR: FRENCH BANK SWAPS, THE BANE OF 2H11, ARE MOVING HIGHER AGAIN - 2 10

 

13. XLF Macro Quantitative Setup – Our Macro team’s quantitative setup in the XLF shows 2.3% upside to TRADE resistance and 1.5% downside to TRADE support.

 

MONDAY MORNING RISK MONITOR: FRENCH BANK SWAPS, THE BANE OF 2H11, ARE MOVING HIGHER AGAIN - XLF

 

Margin Debt - February: +0.85 standard deviations 

We publish NYSE Margin Debt every month when it’s released. NYSE Margin debt hit its post-2007 peak in April of 2011 at $320.7 billion. The chart below shows the S&P 500 overlaid against NYSE margin debt going back to 1997. In this chart both the S&P 500 and margin debt have been inflation adjusted (back to 1990 dollar levels), and we’re showing margin debt levels in standard deviations relative to the mean covering the period 1. While this may sound complicated, the message is really quite simple. First, when margin debt gets to 1.5 standard deviations or greater, as it did last April, it has historically been a signal of extreme risk in the equity market - the last two times it did this the equity market lost half its value in the ensuing period. We flagged this for the first time back in May 2011. The second point is that margin debt trends tend to exhibit high degrees of autocorrelation. In other words, the last few months’ change in margin debt is the best predictor of the change we’ll see in the next few months. We would need to see it approach -0.5 to -1.0 standard deviations before the trend runs its course. There’s plenty of room for short/intermediate term reversals within this broader secular move. Overall, however, this setup represents a long-term headwind for the market. One limitation of this series is that it is reported on a lag.  

 

The chart shows data through February.

 

MONDAY MORNING RISK MONITOR: FRENCH BANK SWAPS, THE BANE OF 2H11, ARE MOVING HIGHER AGAIN - Margin Debt

 

Joshua Steiner, CFA

 

Allison Kaptur

 

Robert Belsky

 

Having trouble viewing the charts in this email?  Please click the link below to view in your browser.   

 


BYD YOUTUBE

In preparation for BYD's FQ1 2012 earnings release Tuesday, we’ve put together the recent pertinent forward looking company commentary.

 

 

YOUTUBE FROM Q4 CONFERENCE CALL

  • "We are confident that 2012 will see Las Vegas set a record and surpass the 40 million visitor mark."
  • "We are confident that even with new competition entering the market, Borgata will remain the leading resort in the region."
  • "While we made progress toward that goal in 2011, reducing our overall leverage by almost full turn, we know we must continue this effort during 2012."
  • "We made great strides in 2011 creating efficiencies and improving our margins. We will stay focused on this in 2012."
  • "We saw encouraging strength in our Hawaiian customer segment, as both visitation and play from Hawaiians
    increased significantly from last year. There are a number of reasons to be optimistic about the future of Downtown. A number of new non-gaming businesses have been moving into the area. Development along the Fremont Street East district continues and The Smith Center, a 2,000 seat, world-class performing arts center will open its doors Downtown next month. These developments will bring new jobs, new visitors and new residents to Downtown Las Vegas. And we are already benefiting from the energy and excitement coming into the area, as visitor traffic has grown substantially on the Fremont Street Experience, helping to drive our strong results. The outlook for Downtown is bright and with one-third of the total market, Boyd Gaming will benefit from the area's renaissance." 
  • "We're on target to roll out B Connected at the IP during the second quarter, which will allow us to capitalize on the busy summer season and accelerate growth in the year ahead."
  • "We are working hard to ensure that Borgata's team members continue to deliver the best possible service to our customers. And the hotel room redesign already underway, will be completed by midyear, helping to keep our product at the top of the market. Based on the feedback we've received so far, the refreshed rooms have been well received by our guests."
  • "When it launches in the second quarter, we are confident that B Connected Online 2.0 will further enhance the exceptional, personal experience our customers have come to expect from Boyd Gaming."
  • "For 2012, we expect corporate expense to be approximately $44 million."
  • "For 2012, we expect consolidated depreciation expense to be approximately $200 million to $205 million, about $135 million to $140 million of which is attributable to Boyd and the remaining to Borgata."
  • "We expect share-based comp to be approximately $10 million in 2012. Pre-opening expense, before the consolidation of Las Vegas Energy was $4 million in the fourth quarter and that is a good quarterly run rate estimate for 2012"
  • "Using the current forward curve for LIBOR, we expect interest expense to be approximately $160 million for Boyd in 2012 and approximately $85 million for Borgata." 
  • "For guidance purposes, we are assuming a 35% tax rate for 2012."
  • "For 2012, at Boyd, we expect to spend approximately $100 million and at Borgata, approximately $60 million, which includes $35 million related to the room project that was started last year and is expected to be completed in the middle of this year."
  • "We expect wholly owned EBITDA, including IP and after the deduction for corporate expense, to be in the range of $88 million to $93 million. We expect Borgata to generate EBITDA of $32 million to $34 million. With this range of EBITDA guidance, including a full quarter of IP, adjusted EPS for the first quarter is expected to range from $0.05 to $0.09 per share."
  • [LV Locals growth] "I guess it's coming in both sides [gaming/non-gaming]. So we've turned the corner, we think it's low single-digits for 2012, but it's certainly higher than what you've seen in the last couple of quarters."
  • "We can see $0.60 on the dollar plus or minus flow through off of any revenue increases." 
  • [IP synergies] "We definitely feel very comfortable with the $5 million and we think there's pretty good upside to that number. As it relates to things like property insurance, utilities, savings on the procurement side by just being part of a much larger organization and buying at, frankly, just better rates because of volumes, are all starting to fold in now. We'll be completed with our insurance renewal in the second quarter and I think you'll see a full year of 2012 that reflects some healthy synergies, certainly well in excess of the $5 million that we have targeted."
  • [Margaritaville competition] "Relatively small project, no hotel rooms. Really I guess the best way to describe it, is a locals-oriented property with relatively tough location from an access perspective. Really don't see that impacting our business at all."

Hedgeye Statistics

The total percentage of successful long and short trading signals since the inception of Real-Time Alerts in August of 2008.

  • LONG SIGNALS 80.65%
  • SHORT SIGNALS 78.62%

Optimistic Bias

This note was originally published at 8am on April 09, 2012. INVESTOR and RISK MANAGER SUBSCRIBERS have access to the EARLY LOOK (published by 8am every trading day) and PORTFOLIO IDEAS in real-time.

“The optimistic bias may well be the most significant of the cognitive biases.”

-Daniel Kahneman

 

After a beautiful long Easter weekend with my family on the East Coast, I really don’t feel like writing negatively this morning. The S&P Futures will do that for you on their own.

 

Growth Slowing, globally, isn’t the “pessimist’s” view – it’s the realist’s view. As Risk Managers, we do not get paid to have an Optimistic Bias. We get paid to have a repeatable risk management process that is biased to the Global Macro data. On the margin, growth is either slowing or accelerating. We’re ok with being early in signaling either direction.

 

Since global growth data has been slowing for at least 6 weeks, why was Old Wall Street consensus so optimistic about the March Employment report? Some people call it perma-bull, but Kahneman’s behavioral psych explanation is a little nicer: we “tend to exaggerate our ability to forecast the future, which fosters optimistic overconfidence.” (Thinking, Fast and Slow, pg 255).

 

Back to the Global Macro Grind

 

Fortuitously, in the last 3 weeks, as Growth Slowing became more obvious, I raised the Cash position in the Hedgeye Asset Allocation Model to 79% (versus 61% two weeks ago). That should put us in a great position to buy on red this morning.

 

Or does it?

 

If I feel like I am too long this morning, I can’t imagine what my overly optimistic competition is feeling.

 

Today is not a day to freak-out and sell on red. Today is a good day to wait and watch. Since most of Europe is closed, the Top 3 Risk Management Signals to watch will be the US Dollar Index, SP500, and 10-year US Treasury Yield:

 

1.   US DOLLAR: after rising +1.4% last wk (its 1st up week in the last 4), the USD needs to show A) some follow through and B) no more policy to debauch it. If the US Dollar Index can hold its head above $79.51 intermediate-term support, that’s bullish.

 

2.   SP500: if the SP500 closes below 1391 support (my immediate-term TRADE line), that’s bearish and it puts 1331 in play over my intermediate-term TREND duration (next 3 months or more). Since 3 of the last 4 YTD SP500 tops occurred in the Feb-May periods, you want to be very careful on time and price here.

 

3.   TREASURIES: plenty who suggested “growth is back” and “bond yields could breakout (buy equities!)” have just seen the 10-yr yield drop -14% in a straight line (from 2.40% to 2.06%). That’s going to leave a mark on asset allocation moves. The long-term TAIL of Growth Slowing remains with 10-yr yield resistance up at 2.47%. Now we’ll see if 2.03% support holds.

 

This is the 3rdtime that Bernanke has made a formal decision to Debauch The Dollar with a Policy To Inflate (2010, 2011, and 2012) and the 3rd time that his policy has ignited short-term asset price inflation that, in turn, slowed growth.

 

Other than those who get paid by commodity price inflation, who wants QE 4, 5, and 6? Remember last year when Q1 GDP slowed to a halt (0.36%)? Back then, expectations were for 3.5-4% growth. Today, the perma-bulls are still talking about US Growth north of 3%. That’s an Optimistic Bias if I ever saw one.

 

Real (inflation adjusted) US Growth could get cut in half again from here if Bernanke decides to debauch further. If he doesn’t, Strong Dollar has every opportunity to emerge the victor in Bernanke’s War.

 

Strong Dollar Deflates The Inflation. Strong Dollar = Strong Consumption. Strong Dollar = Strong America.

 

The risk to all of that, of course, is that now I’m being the optimist.

 

My immediate-term support and resistance ranges for Gold, Oil (Brent), US Dollar Index, 10-year US Treasury Yield, and the SP500 are now $1618-1661, $121.61-124.18, $79.51-80.16, 2.03-2.18%, and 1387-1406, respectively.

 

Best of luck out there this week,

KM

 

Keith R. McCullough
Chief Executive Officer

 

Optimistic Bias - Chart of the Day

 

Optimistic Bias - Virtual Portfolio


THE M3: SANDS CHINA DIVIDEND; MACAU VISITOR PROFILE; S'PORE RESTRICTIONS; INFLATION

The Macau Metro Monitor, April 23, 2012

 

 

SANDS CHINA PROPOSES HK$0.58 DIVIDEND Macau Business

Sands China's board of directors recommended the payment of a final dividend of HK$0.58 per share for 2011.   If approved by shareholders at the annual meeting on June 1, the dividend will be paid on June 22. 

 

MACAU VISITORS SPENT MORE TIME ON GAMING THAN THOSE IN VEGAS Macau Daily News

According to the 2010 Las Vegas and the 2011 Macau visitor profile studies, visitors come to Macau 3.9 times a year on average, versus 1.7 times to Las Vegas.  Macau visitors’ average gaming budget was MOP 15,257 with an average of 3.7 hours spent on gaming, against MOP 3,739 and 2.9 hours for their Las Vegas counterparts.

 

Only 68.7% of visitors who come to Macau stay overnight, while 99.3% stay overnight in Las Vegas.  Visitors going to Las Vegas are more willing to spend on food, transportation and sightseeing, but less on shopping compared with those to Macau.

 

SINGAPORE MIGHT TIGHTEN LAW TO RESTRICT RESIDENTS ENTERING CASINOS Macau Daily News

The Singaporean government may launch new measures to prevent the expansion of gaming activities within the communities and explore new rules to further restrict Singaporeans from entering casinos.  The proposed new law might include a daily entry limit on those with weak financial backgrounds and addicted to gaming, in addition, entrance fees to casino will be raised by S$100.  Some analysts said that the related legislation may not be started before 2017.

 

SINGAPORE INFLATION ACCELERATES MORE THAN ESTIMATED TO 5.2% BusinessWeek

S'pore March CPI rose 5.2% YoY, beating Street estimates of 4.7%.  The core inflation rate was 2.9% in March.

 

CONSUMER PRICE INDEX FOR MARCH 2012 DSEC

Macau CPI for March 2012 increased by 6.22% YoY and 0.86% MoM.


THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – April 23, 2012


As we look at today’s set up for the S&P 500, the range is 38 points or -1.63% downside to 1356 and 1.12% upside to 1394. 

                                            

SECTOR AND GLOBAL PERFORMANCE

 

THE HEDGEYE DAILY OUTLOOK - 1

 

THE HEDGEYE DAILY OUTLOOK - 2

 

THE HEDGEYE DAILY OUTLOOK - 3

 

 

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: on 4/20 NYSE 947
    • Up from the prior day’s trading of -530
  • VOLUME: on 4/20 NYSE 965.98
    • Increase versus prior day’s trading of 17.38%
  • VIX:  as of 4/20 was at 17.44
    • Decrease versus most recent day’s trading of -5.01%
    • Year-to-date decrease of -25.47%
  • SPX PUT/CALL RATIO: as of 04/20 closed at 1.31
    • Down from the day prior at 1.62 

CREDIT/ECONOMIC MARKET LOOK:


GROWTH SLOWING – when we say that, we mean it globally. The words USA “de-coupling” is an Old Wall St word that has not worked in the last 5yrs. The world is as globally interconnected as its ever been and what policy does to the world’s reserve currency has very consequential impact on the intermediate-term slopes of growth and inflation. 

  • TED SPREAD: as of this morning 40
  • 3-MONTH T-BILL YIELD: as of this morning 0.07%
  • 10-Year: as of this morning 1.92
    • Down from prior day’s trading of 1.96
  • YIELD CURVE: as of this morning 1.66
    • Decrease from prior day’s trading at 1.70 

MACRO DATA POINTS (Bloomberg Estimates):

  • No major U.S. economic releases scheduled
  • 11:30am: U.S. to sell $30b 3-mo., $28b 6-mo. bills
  • 11:45am: ECB’s Weidmann speaks in New York City 

 GOVERNMENT:

    • Treasury Secretary Timothy Geithner holds briefing on Social Security, Medicare trustee reports, 1:45pm
    • FDIC board meets on projected deposit insurance fund losses, income, reserve ratios for its restoration plan, 2pm
    • President Obama speaks at Holocaust Memorial Museum in Washington
    • House, Senate in session 

WHAT TO WATCH:

  • Nestle agrees to buy Pfizer baby food unit for $11.9b
  • ITC judges expected to rule in Motorola Mobility disputes, 5pm
  • Amylin said to seek buyers after rejecting earlier Bristol offer
  • Vodafone agrees to acquire Cable & Wireless for $1.7b
  • AstraZeneca to buy Ardea Biosciences for $1.26b
  • Beam may announce today $600m purchase of Pinnacle vodka brand from White Rock Distilleries Inc.: WSJ
  • Wal-Mart Stores’s probe of possible bribery in Mexico may prompt executive departures, steep U.S. government fines: corporate government experts
  • IBM hosts annual meeting tomorrow; watch for dividend boost and/or buyback announcement in next two days
  • US Airways said Friday it reached agreement on contract terms with AMR’s major unions, moves closer to bid for co.
  • Socialist Francois Hollande, President Nicolas Sarkozy progressed to the final round of France’s election 

EARNINGS:

    • SunTrust Banks (STI) 6am, $0.33
    • Eaton (ETN) 6:30am, $0.90
    • Wolverine World Wide (WWW) 6:30am, $0.55
    • Hasbro (HAS) 6:30am, $0.07
    • Xerox (XRX) 6:47am, $0.22
    • DR Horton (DHI) 7am, $0.03
    • MGIC Investment (MTG) 7am, $(0.38)
    • RadioShack (RSH) 7am, $0.05
    • Roper Industries (ROP) 7am, $1.04
    • Brinker International (EAT) 7:45am, $0.56
    • ConocoPhillips (COP) 8am, $2.08
    • WR Berkley (WRB) 4pm, $0.66
    • Canadian National Railway Co (CNR CN) 4:01pm, $1.03
    • Illumina (ILMN) 4:01pm, $0.32
    • Ameriprise Financial (AMP) 4:05pm, $1.39
    • Netflix (NFLX) 4:05pm, $(0.27)
    • Health Management Associates (HMA) 4:05pm, $0.22
    • Zions Bancorp (ZION) 4:10pm, $0.27
    • Texas Instruments (TXN) 4:30pm, $0.17
    • IDEX (IEX) 4:35pm, $0.64
    • Crane Co (CR) 5:15pm, $0.91
    • Allison Transmission Holdings (ALSN) NA, NA    

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • Hedge Funds Cut Bullish Wagers Most in Four Months: Commodities
  • Gold Declines in London as Stronger Dollar Curbs Investor Demand
  • Copper Drops as Chinese Manufacturing May Shrink for Sixth Month
  • Oil Drops From Three-Day High as China Crude Consumption Falls
  • Soybeans Fall on Speculation U.S. Farmers Will Increase Sowing
  • Wheat, Rice Harvests in India Seen Reaching Record on Yields
  • Copper May Fall 12% on Elliott Wave Signal: Technical Analysis
  • Robusta Coffee May Fall as Global Supplies Improve; Sugar Gains
  • Rusal’s $43 Billion Seven-Year Glencore Deal Feeds Investor Feud
  • Oman, Dubai Crudes Drop as Saudi Output Rises: Persian Gulf Oil
  • U.K. Gas Rises a Third Day as Temperature to Stay Below Average
  • Three Nigerian Bonny Light Crude Cargoes Added to May Program
  • Goldman Closes Recommendation to Short May-June WTI Spread
  • Carbon Declines as Weaker Euro, Fall in Stocks May Curb Demand
  • China to Buy U.S. Corn If Price Drops to $5.50, Center Says
  • Natural Gas Bulls Cut Bets With Futures Below $2: Energy Markets
  • Chesapeake 25% Decline Seen Spurred by Personal Conflict: Energy 

THE HEDGEYE DAILY OUTLOOK - 4

 

 

CURRENCIES


COPPER – the Doctor is getting tagged this morning, down -1.7% and in a Bearish Formation (bearish TRADE, TREND, and TAIL in our model). Commodity prices (or Bernanke’s Bubbles) look a lot like US Treasury Yields again. 10yr yield getting smoked to a fresh 2mth #GrowthSlowing low of 1.93%.

 

THE HEDGEYE DAILY OUTLOOK - 5

 

 

EUROPEAN MARKETS


EUROPE – Spanish stocks are crashing again (down -23% since Growth Slowing started, globally in Feb – Hong Kong and India stock markets stopped going up in Feb too). The French Services PMI print for April was awful (46.1 vs 50.1 MAR) and Italian consumer confidence just hit a record low. Central planning not working. DAX snapping TREND support (6689).

 

THE HEDGEYE DAILY OUTLOOK - 6

 

 

ASIAN MARKETS

 

THE HEDGEYE DAILY OUTLOOK - 7

 

 

MIDDLE EAST


THE HEDGEYE DAILY OUTLOOK - 8

 

 

 

The Hedgeye Macro Team

 

 


Daily Trading Ranges

20 Proprietary Risk Ranges

Daily Trading Ranges is designed to help you understand where you’re buying and selling within the risk range and help you make better sales at the top end of the range and purchases at the low end.

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