THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – May 7, 2012


As we look at today’s set up for the S&P 500, the range is 25 points or -0.37% downside to 1364 and 1.45% upside to 1389. 

                                            

SECTOR AND GLOBAL PERFORMANCE

 

THE HEDGEYE DAILY OUTLOOK - 1

 

THE HEDGEYE DAILY OUTLOOK - 1A

 

THE HEDGEYE DAILY OUTLOOK - 3

 

 

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: on 5/04 NYSE -1545
    • Down from the prior day’s trading of -1194
  • VOLUME: on 5/04 NYSE 825.24
    • Decrease versus prior day’s trading of -2.24%
  • VIX:  as of 5/04 was at 19.16
    • Increase versus most recent day’s trading of 9.11%
    • Year-to-date decrease of -18.12%
  • SPX PUT/CALL RATIO: as of 05/04 closed at 1.42
    • Down from the day prior at 1.57 

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: as of this morning 40
  • 3-MONTH T-BILL YIELD: as of this morning 0.08%
  • 10-Year: as of this morning 1.85
    • Decrease from prior day’s trading at 1.88
  • YIELD CURVE: as of this morning 1.60
    • Down from prior day’s trading of 1.63 

MACRO DATA POINTS (Bloomberg Estimates):

  • 11:30am: U.S. to sell $30b 3-mo, $28b 6-mo bills
  • 3pm: Consumer Credit, Mar., est. $9.75b (prior $8.735b)
  • 7:15pm: Fed’s Lacker speaks in Greensboro, North Carolina 

GOVERNMENT:

  • President Obama officially started his re-election bid yesterday in the swing states of Ohio and Virginia
  • Presidential nominee Mitt Romney campaigns in Cleveland
  • House, Senate in session:
    • House Budget Committee holds markup of sequester legislation. 2 p.m.     

WHAT TO WATCH: 

  • Treasury Department to sell $5b of AIG stock at $30.5-shr
  • Yahoo under pressure from Third Point to dismiss CEO
  • Facebook gets first buy recommendation from Wedbush Securities
  • Microsoft to claim Motorola is unfairly demanding $4b/year in patent royalties in federal court in Seattle today
  • Avengers has record $200.3m in opening-wknd ticket sales
  • Voters in France, Greece challenge austerity plans
  • Falcone’s LightSquared gets another week from creditors
  • Micron to invest 300b yen in Japan’s Elpida, Nikkei says
  • Buffett says he’s focusing more on Asia to boost sales
  • MLM blocked for 4 months from making hostile bid for rival Vulcan by judge ruling
  • Preview of week’s U.S. economic reports 

EARNINGS:

    • Cognizant Technology Solutions (CTSH) 6 a.m., $0.79
    • Dish Network (DISH) 6 a.m., $0.70
    • EchoStar (SATS) 6 a.m., $0.02
    • Towers Watson & Co (TW) 6 a.m., $1.35
    • Cinemark Holdings (CNK) 6:36 a.m., $0.35
    • Frontier Communications (FTR) 7 a.m., $0.06
    • HollyFrontier (HFC) 7 a.m., $1.21
    • Tyson Foods (TSN) 7:30 a.m., $0.39
    • Louisiana-Pacific (LPX) 8 a.m., $(0.15)
    • Sysco (SYY) 8 a.m., $0.43
    • Coeur d’Alene Mines (CDE) 8 a.m., $0.43
    • Dendreon (DNDN) 4 p.m., $(0.64)
    • Rackspace Hosting (RAX) 4 p.m., $0.17
    • Wesco Aircraft Holdings (WAIR) 4 p.m., $0.26
    • Electronic Arts (EA) 4:01 p.m., $0.16
    • Pitney Bowes (PBI) 4:01 p.m., $0.50
    • Vivus (VVUS) 4:01 p.m., $(0.13)
    • Clean Energy Fuels (CLNE) 4:05 p.m., $(0.18)
    • ProAssurance (PRA) 4:05 p.m., $1.41
    • Wynn Resorts (WYNN) 4:05 p.m., $1.41
    • Plains All American Pipeline (PAA) 4:06 p.m., $1.51
    • Dun & Bradstreet /The (DNB) 4:14 p.m., $1.32
    • Avis Budget Group (CAR) 4:15 p.m., $(0.01)
    • Hillenbrand (HI) 4:20 p.m., $0.50
    • Federal Realty Investment Trust (FRT) 4:30 p.m., $1.02
    • Vornado Realty Trust (VNO) 4:55 p.m., $1.77
    • Uranium One (UUU CN) 5:01 p.m., $0.02  

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • Hedge Funds Bet Wrong Before Biggest Slump in 2012: Commodities
  • Copper Declines on French Election Outcome, U.S. Payroll Figures
  • Malaysian Palm-Oil Output Probably Rose Most in Seven Months
  • Commodities Close to Erasing 2012’s Gains on Europe, U.S. Data
  • Corn Buying by China Seen Rising 35% on Chicken, Pork Demand
  • Soybeans Decline on Forecast U.S. Farmers May Expand Planting
  • Gold Imports by China From Hong Kong Post Increase in March
  • China Needs U.S. Corn to Meet Rising Shortage, Shanghai JC Says
  • Dalian Commodity Exchange Starts Options Trading Simulation
  • Gold Declines as French, Greek Election Results Weaken the Euro
  • Record Gas Use by U.S. Utilities Fails to Drive Up Price: Energy
  • Oil Slumps to Four-Month Low on European Elections, U.S. Jobs
  • NYSE Euronext Said Willing to Maintain LME Ring in Takeover Bid
  • UN Sees Risk of Unrest From Food Costs Above 10-Year Average
  • Malaysia Seen Countering Indonesia’s Palm-Oil Export Tax Reform
  • South African Gold Mine Deaths Fall to a Record Low in April

THE HEDGEYE DAILY OUTLOOK - 4

 

 

CURRENCIES


US DOLLAR – get the USD and the slope of US Growth (slowing) right, and you’ll get a lot of other things right. USD up for the 4th consecutive day on Friday and the SP500 fell for its 3rd consecutive day. The immediate-term Correlation Risk to Strong Dollar vs SPX remains north of -0.8, so that has left a mark. Ultimately its take down oil prices, which is bullish for Consumers, globally.

 

THE HEDGEYE DAILY OUTLOOK - 5

 

 

EUROPEAN MARKETS


FRANCE – no need for a consensus check here; France down another -1.3% this morning isn’t as much the story as the CAC being down -13% now from its YTD high on March 16th. Mean reversion matters, and now you’re seeing Spain, France, and Greece drag German stocks down with them (DAX down -10% from the same March 16th high; Spain and Greece crashing, again).

 

THE HEDGEYE DAILY OUTLOOK - 6

 

 

ASIAN MARKETS


JAPAN – Japanese stocks continue to get rocked, down hard last night (-2.8%) and down for the 16th trading day out of the last 21. The interconnected risk associated with Japan’s fiscal/debt crisis remains well under the consensus radar.

 

THE HEDGEYE DAILY OUTLOOK - 7

 

 

MIDDLE EAST


THE HEDGEYE DAILY OUTLOOK - 8

 

 

 

The Hedgeye Macro Team

 


Cartoon of the Day: 'Biggest Tax Cut Ever'

President Donald Trump's economic team unveiled what he called last week, "the biggest tax cut we’ve ever had.” Before you get too excited about that hang on a sec. "Trump Tax Reform ain’t gettin’ done anytime soon," Hedgeye CEO Keith McCullough wrote in today's Early Look.

read more

Neurofinance: The Psychology Behind When To Sell A Bull Market

"Most momentum investors stay invested too long, under-reacting and holding tight after truly bad news finally arrives to break the trend," writes MarketPsych's Richard Peterson.

read more

Energy Stocks: Time to Buy the Dip? | $XLE

What the heck is happening in the Energy sector (XLE)? Energy stocks have trailed the S&P 500 by a whopping 15% in 2017. Before you buy the dip, here's what you need to know.

read more

Cartoon of the Day: Hard-Headed Bears

How's this for "hard data"? So far, 107 of 497 S&P 500 companies have reported aggregate sales and earnings growth of 4.4% and 13.2% respectively.

read more

Premium insight

McCullough [Uncensored]: When People Say ‘Everyone is Bullish, That’s Bulls@#t’

“You wonder why the performance of the hedge fund indices is so horrendous,” says Hedgeye CEO Keith McCullough, “they’re all doing the same thing, after the market moves. You shouldn’t be paid for that.”

read more

SECTOR SPOTLIGHT Replay | Healthcare Analyst Tom Tobin Today at 2:30PM ET

Tune in to this edition of Sector Spotlight with Healthcare analyst Tom Tobin and Healthcare Policy analyst Emily Evans.

read more

Ouchy!! Wall Street Consensus Hit By Epic Short Squeeze

In the latest example of what not to do with your portfolio, we have Wall Street consensus positioning...

read more

Cartoon of the Day: Bulls Leading the People

Investors rejoiced as centrist Emmanuel Macron edged out far-right Marine Le Pen in France's election day voting. European equities were up as much as 4.7% on the news.

read more

McCullough: ‘This Crazy Stat Drives Stock Market Bears Nuts’

If you’re short the stock market today, and your boss asks why is the Nasdaq at an all-time high, here’s the only honest answer: So far, Nasdaq company earnings are up 46% year-over-year.

read more

Who's Right? The Stock Market or the Bond Market?

"As I see it, bonds look like they have further to fall, while stocks look tenuous at these levels," writes Peter Atwater, founder of Financial Insyghts.

read more

Poll of the Day: If You Could Have Lunch with One Fed Chair...

What do you think? Cast your vote. Let us know.

read more

Are Millennials Actually Lazy, Narcissists? An Interview with Neil Howe (Part 2)

An interview with Neil Howe on why Boomers and Xers get it all wrong.

read more