Hedgeye - THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – April 30, 2012

As we look at today’s set up for the S&P 500, the range is 17 points or -0.88% downside to 1391 and 0.33% upside to 1408.

SECTOR AND GLOBAL PERFORMANCE

EQUITY SENTIMENT:

ADVANCE/DECLINE LINE: on 4/27 NYSE 1005
- Down from the prior day’s trading of 1071
VOLUME: on 4/27 NYSE 787.79
- Increase versus prior day’s trading of 0.97%
VIX: as of 4/27 was at 16.32
- Increase versus most recent day’s trading of 0.49%
- Year-to-date decrease of -30.26%
SPX PUT/CALL RATIO: as of 04/27 closed at 2.21
- Up from the day prior at 1.31

CREDIT/ECONOMIC MARKET LOOK:

GROWTH – slowing, sequentially, is now a reported fact – but Treasury Yields (10yr 1.93%) and Equity Markets (making lower-highs, globally, since Feb-March) have been very stealth in discounting that before the Sell-Side has. This morning’s South Korean Export number was awful at flat y/y (ie no growth).

STAGFLATION – politically, it’s harder to say we have that in the USA right now (b/c of how we calculate GDP and inflation) than it is to say they have it in Europe. In Italy, the CPI was reported at +3.8% y/y for April, which is nauseatingly high relative to the no growth in Italian GDP (or France, Spain, etc). Brent oil $119 is a consumption killer.

TED SPREAD: as of this morning 38
3-MONTH T-BILL YIELD: as of this morning 0.09%
10-Year: as of this morning 1.92

Down from prior day’s trading of 1.93

YIELD CURVE: as of this morning 1.67

Decrease from prior day’s trading of 1.68

MACRO DATA POINTS (Bloomberg Estimates):

8:30am: Personal Income, Mar., est. 0.3% (prior 0.2%)
8:30am: Personal Spending, Mar., est. 0.4% (prior 0.8%)
9:45am: Chicago PMI, Apr., est. 60.5 (prior 62.2)
10:00am: NAPM-Milwaukee, Apr., est. 53 (prior 51.8)
10:30am: Dallas Fed Manu. Act., Apr., est. 8 (prior 10.8)
11:30am: U.S. to sell $30b 3-mo., $28b 6-mo. bills
5:30pm: Fed’s Fisher speaks on jobs in Beverly Hills, CA

GOVERNMENT:

Japanese Prime Minister Yoshihiko Noda visits White House to discuss U.S.-Japan Security Alliance, economy and trade
President Obama to speak at Building and Construction Trades legislative conference
House, Senate not in session
Supreme Court issues orders only

WHAT TO WATCH:

Collective Brands said to select group made up of Wolverine World Wide, Golden Gate Capital as leading contender to buy co.
Warner Chilcott said to be weighing options including possible sale after receiving interest from strategic, private-equity buyers
Spain’s economy enters second recession since 2009
LightSquared said to receive weeklong extension from creditors
Consumer spending in the U.S. probably climbed 0.4% in March as incomes grew, economists est.
Occupy Wall Street demonstrators plan marches across the world tomorrow calling attention to what they say are abuses of power, wealth
Chrysler’s Dodge Dart overcoming snags before start of production, will have high-mileage version ready in 3Q
Apple uses offices in states other than California, countries outside the U.S. to help minimize its overall tax burden: NYT
Yahoo urged shareholders not to back board nominees put forward by holder Third Point
Boeing will ship all four 787 composite-plastic Dreamliners to Air India, the carrier that demanded $1b in compensation after production delays
Apple, Google deserve to be part of Dow Jones industrial average: Barron’s
Goldman Sachs Asset Management Chairman Jim O’Neill reported by Sunday Times to be a candidate for Bank of England governor
Accretive Health said yesterday it’s working with advisers to address concerns raised by Minnesota AG that it puts bedside pressure on patients to pay bills
Haemonetics agreed yesterday to buy blood-collection business of Pall Corp. for $551m in cash
Apple said to have held talks to let subscribers of Epix movie chanel watch films on its set-top box
Starwood Hotels plans to re-enter Iraqi market almost 20 years after exiting as a result of Gulf War
BOX Options Exchange won approval April 27 to become a U.S. securities exchange
Dewey Leboeuf said to end Greenberg Traurig merger talks
Analysts predict U.S. shares will rise this year to boost the S&P 500 to record, even as Wall Street strategists say the best is already over for American equities
No U.S. IPOs expected to price: Bloomberg data
Week Ahead : U.S. Jobs, French Debate, Buffett: April 30-May 5

EARNINGS:

CNA Financial (CNA) 6am, $0.68
Humana (HUM) 6am, $1.55
Loews (L) 6am, $0.90
LyondellBasel (LYB) 6am, $1.04
Watson Pharmaceuticals (WPI) 7am, $1.59
Harman International Industries (HAR) 8am, $0.67
UDR (UDR) 8am, $0.34
DiamondRock Hospitality Co (DRH) 8am, $0.07
Mercury General (MCY) 8:30am, $0.68
Canadian Oil Sands Ltd (COS CN) 4pm, C$0.54
SBA Communications (SBAC) 4pm, $(0.18)
Veeco Instruments (VECO) 4pm, $0.22
Anadarko Petroleum (APC) 4:01pm, $0.83
Hologic (HOLX) 4:01pm, $0.33
CNO Financial Group (CNO) 4:02pm, $0.13
Plum Creek Timber Co (PCL) 4:02pm, $0.24
Shutterfly (SFLY) 4:02pm, $(0.21)
PMC-Sierra (PMCS) 4:04pm, $0.05
PartnerRe (PRE) 4:04pm, $2.01
Forest Oil (FST) 4:05pm, $0.20
Enbridge Energy Partners (EEP) 4:08pm, $0.37
Flowserve (FLS) 4:09pm, $1.61
Herbalife (HLF) 4:10pm, $0.81
McKesson (MCK) 4:10pm, $2.06
FMC (FMC) 4:30pm, $1.85
Masco (MAS) 5pm, $(0.01)
Suncor Energy (SU CN) 10pm, C$0.81
Jacobs Engineering Group (JEC) Post-Mkt, $0.74

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

Speculators Miss Biggest U.S. Corn Sale Since 1994: Commodities
Wheat Drops as U.S. Crop Development Accelerates; Soybeans Fall
Brent Oil Heads for First Monthly Drop Since December on Demand
Copper Falls 0.5% to $8,376 a Ton; Nickel Declines, Tin Gains
Gold May Gain as Lower Borrowing Costs, Debt Crisis Spurs Demand
White Sugar Rises as Lower Prices May Spur Demand; Coffee Falls
Mercuria Said to Hire Perkins as Agriculture Head in Singapore
Palm Oil Drops to Pare Monthly Advance on Higher Output Concern
U.S. to End Fuel Exports as Oil Discount Disappears, Facts Says
Hedge Funds Cut Bullish Gasoline Bets on Prices: Energy Markets
Roomier Pig Pens May Bolster Pork Prices as European Output Ebbs
Merkel’s Green Jobs Drive Faltering With Cuts for Solar: Energy
Record-High Gasoline Burdens Consumers as Europe Fights Slowdown
Funds Miss Biggest Corn Sale Since 1994
Fortescue Seen Luring Anglo-to-Glencore on China Iron: Real M&A
China Forestry Logging Assets Hold Value, Investor Carlyle Says
Crude April Trading Range Tightest Since 1995: Chart of the Day

CURRENCIES

US DOLLAR – whether people want to admit it or not, the US economic data was bad last week (jobless claims and GDP) – if the only thing left keeping asset prices afloat is the hope for iQe4, that’s dicey. We’ve seen this movie before – holding the USD down like a ball under water (down 6 of the last 7 wks) ends in deflationary tears when it pops back up.

EUROPEAN MARKETS

ASIAN MARKETS

MIDDLE EAST

The Hedgeye Macro Team