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TODAY’S S&P 500 SET-UP – May 4, 2012


As we look at today’s set up for the S&P 500, the range is 50 points or -1.91% downside to 1365 and 1.68% upside to 1415.   

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 5/03 NYSE -1194
    • Down from the prior day’s trading of -377
  • VOLUME: on 5/03 NYSE 844.17
    • Increase versus prior day’s trading of 8.20%
  • VIX:  as of 5/03 was at 17.56
    • Increase versus most recent day’s trading of 4.03%
    • Year-to-date decrease of -24.96%
  • SPX PUT/CALL RATIO: as of 05/03 closed at 1.57
    • Down from the day prior at 2.69 

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: as of this morning 38
  • 3-MONTH T-BILL YIELD: as of this morning 0.08%
  • 10-Year: as of this morning 1.93
    • Unchanged from prior day’s trading
  • YIELD CURVE: as of this morning 1.67
    • Unchanged from prior day’s trading 

MACRO DATA POINTS (Bloomberg Estimates):

  • 8:30am: Nonfarm Payrolls, Apr., est. 160k (prior 120k)
  • 8:30am: Unemployment Rate, Apr., est. 8.2% (prior 8.2%)
  • 11:25am: Fed’s Williams keynote speech to California Bankers Association convention in Dana Point, CA
  • 11:30am: Fed’s Evans moderates panel on economic stability
  • 1pm: Baker Hughes rig count 

GOVERNMENT:

    • President Obama speaks to high school students in Va., 11:50am
    • House, Senate not in session
    • CFTC holds closed meeting on enforcement matters, 10am
    • CFPB Chief of Staff Meredith Fuchs discusses financial crisis at Forum for Sustainable and Responsible Investment, 11:05am
    • Treasury Secretary Tim Geithner and Secretary of State Hillary Clinton are in Beijing, attending U.S.-China Strategic and Economic Dialogue
    • U.S. Intellectual Property Enforcement Coordinator Victor Espinel speaks at Intl. Anti-Counterfeiting Coalition event, 9am
    • Postal Service board of governors meets on finances, 8:30am

WHAT TO WATCH: 

  • U.S. payrolls may have risen 160k in April as jobless rate remained 8.2%, according to economist ests.
  • Warren Buffett’s Berkshire Hathaway reports first-quarter earnings after the close of trading
  • Facebook said to meet today with its underwriters in New York to discuss planned IPO
  • Goldman Sachs, an AMR bondholder, said to be among creditors being lobbied by US Airways to back possible takeover bid
  • Yahoo! will review educational record of CEO Scott Thompson after investor Third Point, fighting for representation on company board, highlighted inaccuracy in his credentials
  • Wal-Mart’s board sued by California pension fund over mishandling of allegations co. bribed Mexican officials
  • Goldman Sachs said to plan starting electronic trading system for corporate bonds this month as bank adapts to regulatory changes, competition
  • RBS says it will pay back the last of its emergency aid from the U.K. government
  • Las Vegas Sands’s Singapore unit, Marina Bay Sands, said to have attracted Sumitomo Mitsui Banking, and about 10 other lenders to its S$4.6b loan to refinance debt
  • Data breach at Global Payments that may have exposed accounts to fraud may have affected at least 7m card accounts, exceeding earlier estimates: WSJ
  • CME Group requested and received 90-day extension for implementing margin changes for members announced May 2; rule will be enforced on Aug. 5
  • Juror in Oracle’s copyright-infringement trial against Google asked judge for guidance about not being able to reach unanimous verdict, raising possibility panel is deadlocked
  • BofA said to have held talks with lawyers for more than 1,000 former Merrill Lynch brokers, may lead to settlement costing hundreds of millions of dollars: WSJ
  • U.S. Air Force plans to restart competition on biggest defense contract, valued at as much as $6.9b, announced April 16 following protests from a dozen losing bidders
  • U.S. officials Hillary Clinton and Tim Geithner meet with Chinese leaders in Beijing
  • French Election, Chinese Trade, Buffett: Week Ahead May 5-12 

EARNINGS:

    • AES (AES) 6am, $0.27
    • AON (AON) 6:30am, $0.83
    • Buckeye Partners (BPL) 6:30am, $0.74
    • Spectra Energy (SE) 6:30am, $0.52
    • Sirona Dental Systems (SIRO) 6:30am, $0.69
    • PPL (PPL) 6:58am, $0.69
    • Brookfield Office Properties (BPO CN) 7am, $0.25
    • Church & Dwight Co (CHD) 7am, $0.61
    • Duke Energy (DUK) 7am, $0.36
    • ITT (ITT) 7am, $0.32
    • Pepco Holdings (POM) 7am, $0.24
    • Telephone & Data Systems (TDS) 7:02am, $0.36
    • Estee Lauder (EL) 7:30am, $0.34
    • Ameren (AEE) 7:54am, $0.24
    • Clear Channel Outdoor Holdings (CCO) 8am, $(0.08)
    • Exelon (EXC) 8am, $0.79
    • Madison Square Garden Co (MSG) 8am, $0.18
    • Spectra Energy Partners (SEP) 8am, $0.47
    • United States Cellular (USM) 8:01am, $0.43
    • Berkshire Hathaway (BRK/A) 5:15pm, $1,780  

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

 

OIL – we’ve been signaling this highly correlated immediate-term relationship between the US Dollar Index and oil prices for the last few weeks and our intermediate-term TREND lines for Brent ($119.17) and WTIC ($103.94) breaking have proven to be catalytic. Oil moves to bearish TRADE and TREND. That’s very new; bullish, on the margin, for US Consumption Growth. 

  • Soy Traders Most Bullish in Seven Weeks on Drought: Commodities
  • Oil Falls to 3-Week Low Before U.S. Jobs Data, Europe Elections
  • Gold Falls in London on Speculation Jobs Data Will Curb Demand
  • LME’s Abbott Predicts Multiple Takeover Offers as Deadline Looms
  • Copper Seen Falling on Concern About Strength of U.S. Employment
  • Soybeans Gain, Trimming Weekly Loss, as U.S. Export Sales Climb
  • Sugar Gains as Lower Prices Seen Spurring Demand; Coffee Rises
  • Copper Dominant Holding Is ‘Adding Fuel to Fire,’ Galena Says
  • Iran May Lose 9.5% of Oil Contracts as Asian Buyers Cut Imports
  • United Energy in Talks to Buy Canadian Producer for $1 Billion
  • India’s Quest for Coal Stalls as Red Tape Kills Mining Takeovers
  • CME Gets 90-Day Extension to Implement Member Margin Changes
  • Barclays Capital Commodities Head Roger Jones Said to Quit Bank
  • Soybean Traders Most Bullish Since March
  • Rice Prices Seen Under ‘Pressure’ on Ample Supply, FAO Says
  • Hedge-Fund Millionaire Diggle Targets $150 Million for Farm Fund
  • Coal at 18-Month Low Seen Lacking China Boost: Energy Markets

THE HEDGEYE DAILY OUTLOOK - 4

CURRENCIES

THE HEDGEYE DAILY OUTLOOK - 5

EUROPEAN MARKETS


RUSSIA – the problem, of course, is that whats good for the US Dollar and the American Consumer is actually quite bad in the very short term for stock markets levered to Commodities (including, to a degree, the SP500 and Russell2000). Russia’s RTSI is the poster child of Petro-Dollar equity beta. Dollar stops going down and Russian stocks -13% since mid March.

THE HEDGEYE DAILY OUTLOOK - 6

 

ASIAN MARKETS


CHINA – both the American and Chinese people have one very big thing in common – we like down oil prices. Chinese stocks (which we are long) love Deflating The Inflation. Shanghai Composite up for 3 consecutive days (w/ SP500 down 3 of last 4) to +11.5% YTD. There’s always a bull market somewhere!

THE HEDGEYE DAILY OUTLOOK - 7

 

 

MIDDLE EAST


THE HEDGEYE DAILY OUTLOOK - 8

The Hedgeye Macro Team