THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – May 1, 2012


As we look at today’s set up for the S&P 500, the range is 19 points or -0.49% downside to 1391 and 0.86% upside to 1410. 

                                            

SECTOR AND GLOBAL PERFORMANCE

 

THE HEDGEYE DAILY OUTLOOK - 1A

 

THE HEDGEYE DAILY OUTLOOK - 2

 

THE HEDGEYE DAILY OUTLOOK - 3

 

 

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: on 4/30 NYSE -665
    • Down from the prior day’s trading of 1005
  • VOLUME: on 4/30 NYSE 851.91
    • Increase versus prior day’s trading of 8.14%
  • VIX:  as of 4/30 was at 17.15
    • Increase versus most recent day’s trading of 5.09%
    • Year-to-date decrease of -26.71%
  • SPX PUT/CALL RATIO: as of 04/30 closed at 1.92
    • Down from the day prior at 2.21 

CREDIT/ECONOMIC MARKET LOOK:


APRIL – you can only put lipstick on a pig for so long, then lower-highs start to concern the bulls; particularly as the Macro data confirms that price momentum. Perma-Bulls have had to learn this lesson the hard way in 3 of the last 4yrs (ie sell in Q1, buyem back in Q3 a lot lower) and I don’t think Pavlov’s bells are going to keep them in it on “valuation” this time either.

 

10YR TREASURIES – bond yields continue to tell you all you need to know about Growth Slowing in the USA. At 1.92% this morning, yields are testing 6 week lows and have gone straight down since mid-March when the US growth slowdown picked up on the downside. Yesterday’s PMI print was -10% m/m and Jobless Claims are up +15% m/m – it matters. 

  • TED SPREAD: as of this morning 37
  • 3-MONTH T-BILL YIELD: as of this morning 0.09%
  • 10-Year: as of this morning 1.91
    • Unchanged from prior day’s trading
  • YIELD CURVE: as of this morning 1.66
    • Unchanged from prior day’s trading 

MACRO DATA POINTS (Bloomberg Estimates):

  • 7:45am/8:55am: ICSC/Redbook weekly retail sales
  • 9:30am: Fed’s Kocherlakota speaks to tribal leaders in Washington
  • 10am: Construction Spending, Mar., est. 0.5% (prior -1.1%)
  • 10am: ISM Manufacturing, Apr., est. 53.0 (prior 53.4)
  • 10am: ISM Prices Paid, Apr., est. 59.0 (prior 61.0)
  • 11am: Fed’s Williams speaks on economy in Beverly Hills, CA
  • 11:30am: U.S. to sell $30b 4-wk, $26b 52-wk bills
  • 12:30pm: Fed’s Evans & Lockhart speak on monetary policy in Beverly Hills
  • 3pm: Fed’s Plosser gives economic outlook in San Diego
  • 4:30pm: API inventories

 GOVERNMENT:

    • Secret Service Director Mark Sullivan to provide panel with details on agents’ involvement with prostitutes in Colombia
    • U.S. travel industry kicks off $12.3m marketing campaign, with ads rolling out in U.K., Canada, Japan
    • SEC, CFTC holds closed meetings on enforcement matters
    • House, Senate, Supreme Court not in session 

WHAT TO WATCH:

  • Fed said to have criticized how some of the 19 largest U.S. banks calculated potential losses, planned dividends in this year’s stress tests
  • Group that includes Wolverine World Wide, Golden Gate Capital said to be near agreement, may announce deal as soon as today to buy Collective Brands for $21-$22 per share
  • Mitsubishi, Mitsui agreed to buy 14.7% stake in Woodside Petroleum’s proposed Brose LNG project in Australia for $2b
  • ISM’s factory index probably eased to 53 last month from 53.4 in March, economists’ est. ahead of today’s report
  • Chesapeake Energy says IRS reviewing executive-incentive program that allowed CEO Aubrey McClendon to buy stakes in thousands of co.’s oil and natgas wells, in filing yesterday
  • April U.S. auto sales rate may be 14.3m, up from 13.2m year- ago, decelerating from 1Q rate 14.6m
  • Bank of America may cut 2,000 banking jobs on top of plan announced last year to eliminate 30k jobs in 3 years: WSJ
  • House Financial Services Cmte Chairman Spencer Bachus said he’s been cleared by congressional ethics office of allegations he improperly traded securities during 2008 financial crisis
  • NYC’s pension funds will vote against the five Wal-Mart directors standing for re-election at next month’s shareholder meeting: NYT
  • Isuzu Motors said it’s considering forming business alliances with companies including General Motors; Nikkei reported April 29 GM may buy 10% stake in Isuzu
  • American Hospital Association says Obama administration’s $14.6b program to encourage doctors to adopt electronic medial records too ambitious, goals may not be met, in letter to HHS
  • May Day holiday, some overseas markets closed, Occupy Wall Street stages protests
  • No U.S. IPOs expected to price: Bloomberg data 

EARNINGS:

    • Corn Products International (CPO) 5:30am, $1.22
    • Becton Dickinson and Co (BDX) 6am, $1.38
    • Huntsman (HUN) 6am, $0.39
    • Emerson Electric Co (EMR) 6:30am, $0.80
    • Harris (HRS) 6:30am, $1.34
    • NiSource (NI) 6:30am, $0.71
    • Foster Wheeler (FWLT) 6:45am, $0.39
    • Archer-Daniels-Midland Co (ADM) 7am, $0.60
    • Avon Products (AVP) 7am, $0.28
    • Biogen Idec (BIIB) 7am, $1.48
    • Cobalt International Energy (CIE) 7am, $(0.11)
    • Marsh & McLennan Cos (MMC) 7am, $0.61
    • Marathon Petroleum (MPC) 7am, $1.31
    • Pfizer (PFE) 7am, $0.56
    • Sirius XM Radio (SIRI) 7am, $0.02
    • Techne (TECH) 7am, $0.85
    • Thomson Reuters (TRI CN) 7am, $0.41
    • TRW Automotive Holdings (TRW) 7am, $1.61
    • Wisconsin Energy (WEC) 7am, $0.73
    • DENTSPLY International (XRAY) 7am, $0.52
    • Legg Mason (LM) 7am, $0.47
    • Automatic Data Processing (ADP) 7:30am, $0.91
    • Cummins (CMI) 7:30am, $2.22
    • Hospira (HSP) 7:30am, $0.48
    • Arch Coal (ACI) 7:45am, $0.19
    • HCP (HCP) 7:45am, $0.66
    • Valero Energy (VLO) 7:45am, $0.28
    • AGCO (AGCO) 8am, $0.86
    • Arrow Electronics (ARW) 8am, $1.09
    • Cameco (CCO CN) 8am, C$0.25
    • Prologis (PLD) 8am, $0.40
    • Martin Marietta Materials (MLM) 8:05am, $(0.24)
    • Ecolab (ECL) 8:25am, $0.48
    • FirstEnergy (FE) 8:30am, $0.80
    • CBOE Holdings (CBOE) 4pm, $0.36
    • Motorola Mobility Holdings (MMI) 4pm, $0.01
    • Unum Group (UNM) 4pm, $0.76
    • WebMD Health (WBMD) 4pm, $(0.18)
    • CBS (CBS) 4:01pm, $0.44
    • Chesapeake Energy (CHK) 4:01pm, $0.28
    • DaVita (DVA) 4:01pm, $1.45
    • Fiserv (FISV) 4:01pm, $1.14
    • TripAdvisor (TRIP) 4:01pm, $0.34
    • Broadcom (BRCM) 4:05pm, $0.55
    • ONEOK (OKE) 4:05pm, $1.31
    • OpenTable (OPEN) 4:05pm, $0.34
    • Genworth Financial (GNW) 4:07pm, $0.13
    • Arthur J Gallagher & Co (AJG) 4:11pm, $0.26
    • TECO Energy (TE) 4:15pm, $0.24
    • Yamana Gold (YRI CN) 4:28pm, $0.24
    • Boston Properties (BXP) Post-Mkt, $1.13
    • General Growth Properties (GGP) Post-Mkt, $0.21
    • Intact Financial (IFC CN) Post-Mkt, C$1.26 

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG) 

  • Fat Pigs Means Pork Bust as Record Herd Ends Rally: Commodities
  • Jeremy Charles Will Retire as HSBC’s Head of Precious Metals
  • Corn Declines as U.S. Planting Progress May Boost Global Supply
  • Oil Near Two-Day Low After China PMI Expands Less Than Forecast
  • Sugar Falls as Delivery Seen Bigger Than Forecast; Coffee Drops
  • Copper Swings Between Gains, Drops Amid Doubt About China Easing
  • Gold Is Seen Falling on Concern Physical Purchases Are Slowing
  • U.S. Lags in Cattle ID Seen as More Effective Than Mad Cow Tests
  • Aluminum Set to Strengthen in Next 10 Days: Technical Analysis
  • Rubber Gains for Fourth Day as China’s Manufacturing Expands
  • Wind’s $168 Billion North Sea Boom Lures Oil Industry: Energy
  • Utility Puts Hit Record in Bet Against Defensive Rally: Options
  • Batista Considers Industrial Partner to Tap $1.5 Trillion Assets
  • Pork Surplus May End Four-Year Price Rally
  • Kansas Draws Record 100 to Measure Wheat in World’s Top Exporter
  • Oil Supplies Surge to 21-Year High in Survey: Energy Markets
  • Record Fuel Output Returning Exmar’s Tankers to Profit: Freight 

THE HEDGEYE DAILY OUTLOOK - 4

 

 

CURRENCIES


THE HEDGEYE DAILY OUTLOOK - 5

 

 

EUROPEAN MARKETS

 

THE HEDGEYE DAILY OUTLOOK - 6

 


ASIAN MARKETS


JAPAN – while we were lugging around our 100 slide deck presentation on Japan in March, the most common question was “what’s the catalyst to make Japanese stocks go down?” A: economic gravity. Just when consensus thought Japan couldn’t go down it’s down for 15 of the last 19 trading days (down hard, -1.8% overnight).

 

THE HEDGEYE DAILY OUTLOOK - 7

 

 

MIDDLE EAST


THE HEDGEYE DAILY OUTLOOK - 8

 

 

 

The Hedgeye Macro Team

 


7 Tweets Summing Up What You Need to Know About Today's GDP Report

"There's a tremendous opportunity to educate people in our profession on how GDP is stated and projected," Hedgeye CEO Keith McCullough wrote today. Here's everything you need to know about today's GDP report.

read more

Cartoon of the Day: Crash Test Bear

In the past six months, U.S. stock indices are up between +12% and +18%.

read more

GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist

“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.

read more

Exact Sciences Up +24% This Week... What's Next? | $EXAS

We remain long Exact Sciences in the Hedgeye Healthcare Position Monitor.

read more

Inside the Atlanta Fed's Flawed GDP Tracker

"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.

read more

Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

read more

People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

read more

UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more

Got Process? Zero Hedge Sells Fear, Not Truth

Fear sells. Always has. Look no further than Zero Hedge.

read more