THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – April 25, 2012


As we look at today’s set up for the S&P 500, the range is 31 points or -0.80% downside to 1361 and 1.46% upside to 1392. 

                                            

SECTOR AND GLOBAL PERFORMANCE

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EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: on 4/24 NYSE 1052
    • Up from the prior day’s trading of -1440
  • VOLUME: on 4/24 NYSE 752.12
    • Decrease versus prior day’s trading of -4.15%
  • VIX:  as of 4/24 was at 18.10
    • Decrease versus most recent day’s trading of -4.59%
    • Year-to-date decrease of -22.65%
  • SPX PUT/CALL RATIO: as of 04/24 closed at 2.67
    • Up from the day prior at 1.07 

CREDIT/ECONOMIC MARKET LOOK:

EARNINGS last we checked, the buy-side’s expectations about earnings reflect what stocks do, not what companies do versus lowered y/y earnings expectations. Since you all work on the buy-side, you get it. Sadly, others still don’t. Some stocks have been getting hammered so far here during earnings season. Apple was a legitimate beat vs buy-side worries.

BOND YIELDS – no change in Europe (rising credit risks) or the USA (10yr bond yields at 1.98% couldn’t care less about what 1 company did at the close). Apple is a great company and Growth is Slowing, globally – mutually exclusive points, and both remain obvious.

  • 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
    • Up from prior day’s trading of 1.97
  • YIELD CURVE: as of this morning 1.71
    • Unchanged from prior day’s trading 

MACRO DATA POINTS (Bloomberg Estimates):

  • 7:00am: MBA Mortgage Applications, week of Apr. 20
  • 8:30am: Durable Goods, Mar., est. -1.7% (prior 2.4%, revised)
  • 8:30am: Durables Ex/Trans, Mar., est. 0.5% (prior 1.8%, revised)
  • 8:30am: Cap Goods Nondef Ex/Air, Mar., est. 1.0% (prior 1.2%)
  • 10:30am:DOE inventories
  • 11:30am: U.S. to sell $35b 5-yr notes
  • 12:30pm: FOMC Rate Decision, est. 0.25% (prior 0.25%)
  • 2:00pm: FOMC releases economic, Fed funds projections
  • 2:15pm: Fed’s Bernanke holds press conference 

GOVERNMENT:

  • Supreme Court hears arguments in Obama administration’s challenge to Arizona’s crackdown on illegal immigration, 10am
  • President Obama speaks to students at University of Iowa, 2:20pm
  • House, Senate in session:
    • Senate Agriculture Committee marks up farm bill, 9am
    • House Financial Services subcommittee hears from SEC Chairwoman Mary Schapiro at oversight hearing, 10am
    • Senate Judiciary Committee hears from Homeland Security Secretary Janet Napolitano at an oversight hearing, 10am
    • Senate Banking Committee holds hearing on helping homeowners save money through refinancing, 10am
    • Senate Armed Services subcommittee holds hearing on missile defense,  2:30pm
    • Senate Appropriations subcommittee hears from FCC Chairman Julius Genachowski on expanding broadband access and promoting innovation,  2:30pm 

WHAT TO WATCH:

  • FOMC issues rate decision at 12:30pm, followed later by Bernanke press conference at 2:15pm
  • Britain unexpectedly enters first double-dip recession since 1970s as U.K. economy shrunk in 1Q
  • U.S. durable goods ex-transportation probably gained, economists est., on rising demand for cars, auto supplies
  • Amgen agreed to buy closely held Mustafa Nevzat for almost $700m
  • Watson Pharmaceuticals may announce buying Actavis for ~EU4.5b
  • Cattle futures rebounded as Japan and Taiwan said they wouldn’t alter import controls on U.S. beef
  • China Auto Rental postponed what would have been the second U.S. IPO this yr by Chinese company
  • Republican presidential candidate Mitt Romney swept five primaries, including Pennsylvania, N.Y.
  • Global earnings: Credit Suisse unexpectedly posted profit, China Unicom 1Q profit missed est.
  • Apple 2Q profit beat est., helped by Chinese iPhone demand; watch U.S. suppliers including TriQuint Semi, Cirrus Logic, Broadcom 

 EARNINGS:

    • Cenovus Energy (CVE CN) 6am, C$0.54
    • Encana (ECA CN) 6 a.m., $0.03
    • WR Grace & Co (GRA) 6 a.m., $0.81
    • Host Hotels & Resorts (HST) 6 a.m., $(0.13)
    • Thermo Fisher Scientific (TMO) 6 a.m., $1.11
    • Wellpoint (WLP) 6 a.m., $2.29
    • TE Connectivity (TEL) 6 a.m., $0.66
    • Praxair (PX) 6:01 a.m., $1.36
    • Wyndham Worldwide (WYN) 6:30 a.m., $0.55
    • Eli Lilly & Co (LLY) 6:30 a.m., $0.78
    • AutoNation (AN) 6:45 a.m., $0.53
    • General Dynamics (GD) 7 a.m., $1.69
    • Harley-Davidson (HOG) 7 a.m., $0.71
    • Lorillard (LO) 7 a.m., $2.00
    • Motorola Solutions (MSI) 7 a.m., $0.54
    • NASDAQ OMX Group (NDAQ) 7 a.m., $0.63
    • Northrop Grumman (NOC) 7 a.m., $1.59
    • National Oilwell Varco (NOV) 7 a.m., $1.40
    • Rockwell Automation (ROK) 7 a.m., $1.27
    • Sprint Nextel (S) 7 a.m., $(0.41)
    • Tupperware Brands (TUP) 7 a.m., $0.96
    • Nielsen Holdings NV (NLSN) 7 a.m., $0.27
    • Corning (GLW) 7 a.m., $0.28
    • MeadWestvaco (MWV) 7:05 a.m., $0.24
    • Boeing (BA) 7:30 a.m., C$0.93
    • Caterpillar (CAT) 7:30 a.m., $2.13
    • Delta Air Lines (DAL) 7:30 a.m., $(0.04)
    • Hess (HES) 7:30 a.m., $1.54
    • Molex (MOLX) 7:30 a.m., $0.34
    • Owens Corning (OC) 7:30 a.m., $0.30
    • Southern (SO) 7:30 a.m., $0.45
    • NextEra Energy (NEE) 7:31 a.m., $0.97
    • Dr Pepper Snapple Group (DPS) 8 a.m., $0.48
    • US Airways Group (LCC) 8 a.m., $(0.23)
    • Bell Aliant (BA CN) 8:08 a.m., $0.41
    • Avery Dennison (AVY) 8:30 a.m., $0.44
    • Akamai Technologies (AKAM) 4 p.m., $0.38
    • Las Vegas Sands (LVS) 4 p.m., $0.60
    • Varian Medical Systems (VAR) 4 p.m., $0.96
    • Williams Cos (WMB) 4 p.m., $0.36
    • Crown Castle International (CCI) 4:01 p.m., $0.18
    • LSI (LSI) 4:01 p.m., $0.14
    • AvalonBay Communities (AVB) 4:01 p.m., $1.24
    • Williams Partners (WPZ) 4:01 p.m., $0.89
    • Tractor Supply Co (TSCO) 4:01 p.m., $0.52
    • Owens-Illinois (OI) 4:02 p.m., $0.67
    • Equinix (EQIX) 4:02 p.m., $0.53
    • Fidelity National Financial (FNF) 4:04 p.m., $0.25
    • Arch Capital Group Ltd (ACGL) 4:05 p.m., $0.71
    • Citrix Systems (CTXS) 4:05 p.m., $0.51
    • Everest Re Group Ltd (RE) 4:05 p.m., $3.45
    • Cadence Design Systems (CDNS) 4:05 p.m., $0.15
    • Raymond James Financial (RJF) 4:08 p.m., $0.57
    • Assurant (AIZ) 4:15 p.m., $1.43
    • Equity Residential (EQR) 4:15 p.m. $0.62
    • Xilinx (XLNX) 4:20 p.m. $0.41
    • Duke Realty (DRE) 4:29 p.m. $(0.06)
    • Cliffs Natural Resources (CLF) 4:31 p.m. $1.12
    • Range Resources (RRC) 5:10 p.m. $0.13
    • Gold (G CN) 5:15 p.m. $0.54
    • O’Reilly Automotive (ORLY) 6:30 p.m. $1.04
    • SL Green Realty (SLG) 6:40 p.m. $0.06
    • Lundin Mining (LUN CN) Post-Mkt $1.05
    • Cabot Oil & Gas (COG) Post-Mkt $0.89    

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • Cattle Futures Rebound as Japan, EU Unmoved by U.S. Mad Cow
  • GDF Suez Says Force Majeure Ended at Three French LNG Terminals
  • Power Shortage Hurts Chile $100 Billion Copper Push: Commodities
  • Mad Cow Case May Pose Little Threat to U.S. Feed Crop Demand
  • U.K. Gas Snaps Two-Day Decline as Imports Slow, Exports Rise
  • Copper Advances as Company Earnings Lift Equities, Commodities
  • Soybeans Climb to Three-Year High as Freeze Cuts Argentina Crop
  • Sugar Climbs as Demand Increases Before Ramadan; Cocoa Advances
  • Gold May Decline as Investors Hold Off Buying Before Fed Report
  • Commodity Trade Finance Lending Fell 15% at Most, ABN Amro Says
  • Mad Cow Disease Remains Rare Since Discovery in U.K.: Factsheet
  • Barrick Gold Joins Global War for Talent: Corporate Canada
  • Vale to Redesign Giant Ore Ships to Protect Crews From Pirates
  • German Shipping Funds Die as Investors See Losses Rise: Freight
  • Cattle Rebounds After Plunging on Mad Cow
  • Mad Cow in California Shows Need for More Tests, Groups Say
  • Japan Has No Plan to Suspend U.S. Beef Imports ‘At the Moment’ 

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CURRENCIES

 

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EUROPEAN MARKETS

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ASIAN MARKETS

INDIA  most fascinating factors we woke up to this morning were big Asian Stock markets closing down on the day (India, KOSPI, Hang Seng) despite the US Futures fanfare. India’s rating outlook was cut by S&P because it should have been – they are a net importer of $118 oil, running a big deficit, with GDP slowing. UK missed GDP as well this morning = stagflation.

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MIDDLE EAST


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The Hedgeye Macro Team