THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – May 9, 2012


As we look at today’s set up for the S&P 500, the range is 17 points or -1.08% downside to 1349 and 0.17% upside to 1366. 

                                            

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 5/08 NYSE -613
    • Down from the prior day’s trading of 252
  • VOLUME: on 5/08 NYSE 902.47
    • Increase versus prior day’s trading of 19.64%
  • VIX:  as of 5/08 was at 19.05
    • Increase versus most recent day’s trading of 0.58%
    • Year-to-date decrease of -18.59%
  • SPX PUT/CALL RATIO: as of 05/08 closed at 2.03
    • Up from the day prior at 1.31 

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: as of this morning 38
  • 3-MONTH T-BILL YIELD: as of this morning 0.09%
  • 10-Year: as of this morning 1.82
    • Decrease from prior day’s trading at 1.84
  • YIELD CURVE: as of this morning 1.57
    • Down from prior day’s trading of 1.59 

MACRO DATA POINTS (Bloomberg Estimates):

  • 7am: MBA Mortgage Applications, week of May 4 (prior 0.1%)
  • 10am: Wholesale Inventories, Mar., est. 0.6% (prior 0.9%)
  • 10am: Fed’s Kocherlakota speaks in Minneapolis
  • 10:30am: DoE inventories
  • 10:45am: Fed’s Pianalto speaks in Lexington, Kentucky
  • 12pm: Fed’s Plosser speaks in Philadelphia
  • 1pm: U.S. to sell $24b 10-yr notes 

GOVERNMENT:

  • President Obama meets with NATO Secretary General Anders Fogh Rasmussen to finalize plans for NATO Summit in Chicago, 2:10pm
  • Chamber of Commerce holds quarterly economic briefing, 8:45am
  • Postal Service announces plan for smallest post offices, 10am
  • House lawmakers hold news conference calling for a special prosecutor to investigate the collapse of MF Global, 11am
  • House, Senate in session:
    • House Judiciary holds hearing on FBI oversight, with testimony from Robert Mueller, 10am
    • House Natural Resources hearing on offshore drilling, 10am
    • House Armed Services marks up defense authorization bill, 10am
    • House Financial Svcs subcommittee holds hearing on regulatory compliance costs for small financial institutions, 10am
    • Senate Banking panel holds hearing on need for long-term reauthorization of national flood insurance program, 10am
    • Former Fed Chairman Paul Volcker; FDIC member Thomas Hoenig testify before Senate Banking panel on limiting federal support for financial institutions, 2pm
    • World Economic Forum takes place in Ethiopia 

WHAT TO WATCH:

  • S&P 500, Dow index futures lower; Dow has dropped the previous five sessions amid concerns of political wrangling in Europe
  • Glaxo to begin hostile offer for Human Genome at $13/shr
  • Toyota forecasts profit will double to highest in five years
  • China passenger-vehicle sales rise 13%, exceeding estimates
  • Confidence among U.S. CEOs in 1Q reaches highest level in 3 yrs
  • Green Mountain Coffee removes chairman after stock sale
  • Verizon Wireless Airwaves purchase said to raise U.S. concerns
  • U.K. retail sales plunge by most in more than a year, BRC says
  • Commerzbank exceeds capital target as profit misses estimates
  • FDA advisory panel meets on PFE’s tofacitinib
  • Disney profit rises 21% on theme parks, says there will be “Avengers” sequel 

EARNINGS:

    • Spectrum Brands Holdings (SPB) 6am, $0.31
    • Quebecor Inc (QBR/B CN) 6am, C$0.68
    • Dollar Thrifty Automotive Group (DTG) 6am, $1.35
    • Agrium (AGU CN) 6:30am, $1.04
    • Enbridge (ENB CN) 7am, C$0.48
    • AOL (AOL) 7am, $0.17
    • Tim Hortons (THI CN) 7:30am, C$0.59
    • Dean Foods (DF) 7:35am, $0.21
    • Ariad Pharmaceuticals (ARIA) 7:35am, $(0.25)
    • Macy’s (M) 8am, $0.40; Preview
    • Priceline.com (PCLN) 4pm, $3.95
    • MEMC Electronic Materials (WFR) 4:01pm, $(0.26)
    • News Corp (NWSA) 4:03pm, $0.31
    • Live Nation Entertainment (LYV) 4:03pm, $(0.41)
    • Cisco Systems (CSCO) 4:05pm, $0.47
    • Universal Display (PANL) 4:05pm, $0.04
    • Activision Blizzard (ATVI) 4:05pm, $0.04
    • Alterra Capital Holdings (ALTE) 4:05pm, $0.62
    • BMC Software (BMC) 4:05pm, $0.80
    • Tesla Motors (TSLA) 4:10pm, $(0.70)
    • Monster Beverage (MNST) 4:10pm, $0.38
    • CenturyLink (CTL) 4:25pm, $0.58
    • TELUS (T CN) post-mkt, C$1.04    

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

 

GOLD – no iQe4 upgrade option = down Gold, or at least that’s how Gold acts; its immediate-term TRADE correlation to the USD is also -0.85, so with the USD up for 6 consecutive days, if you didn’t know about the Correlation Risk, now you know. Ron Paul saying abolish Bernanke in DC yesterday and Tea Party win vs Lugar – there’s an American Zeitgeist out there called The People. 

  • Silver Forecasters Bullish as Hedge Funds Retreat: Commodities
  • Oil Falls Sixth Day in Longest Drop Since 2010; SocGen Says Buy
  • India to Rival Vietnam, Dethrone Thailand as Top Rice Seller
  • China Said to Plan Auction of 3 Million Tons of Soybean Reserves
  • Ex-Deutsche Securities Banker Plans Commodities Hedge Fund
  • Copper Declines for a Fifth Day as Euro Debt Crisis May Worsen
  • Gold Drops to Four-Month Low in London on Concern Euro to Weaken
  • Corn Drops as U.S. Planting Gains, Boosting Supply Prospects
  • Palm Oil Declines to Two-Month Low on Greece Political Impasse
  • Sugar Gains on Rising Thai Premiums, Ramadan Demand; Cocoa Falls
  • Gold to Rebound to $1,700 an Ounce This Year: Technical Analysis
  • Sino-Forest Debt Insurance Set to Pay Out 71 Cents per Dollar
  • Thai Rice Output From Main Crop Set to Gain 21% on State Buying
  • Gasoline Seen at Earliest Peak in U.S. Since ‘98: Energy Markets
  • Ex-Deutsche Banker Plans Commodities Fund
  • OPEC Crude Drops Below $110 for First Time Since January
  • Glencore Says Commodity Demand ‘Healthy’ as Production Increases

THE HEDGEYE DAILY OUTLOOK - 4

 

 

CURRENCIES


THE HEDGEYE DAILY OUTLOOK - 5

 

 

EUROPEAN MARKETS


ITALY – we covered our short position in France yesterday; re-shorted Spain (down -2.3% this morning and continues to crash); and stayed short Italian stocks as we think they’ll be back in crash mode in no time (already down -18.9% from the YTD peak in March when most global Equity markets stopped going up, including the Russell2000).

 

THE HEDGEYE DAILY OUTLOOK - 6

 

 

ASIAN MARKETS


 ASIA – you can blame Europe or Canada or whoever, but the fact of the matter is that we live in a globally interconnected economy that doesn’t “de-couple.” India moved to QE yesterday and the market there didn’t care; China finally had a down day of -1.6%; and Japan is getting wrecked, down -1.5% overnight (down 17 of the last 23 days during a 12% draw-down).

 

THE HEDGEYE DAILY OUTLOOK - 7

 

 

MIDDLE EAST


THE HEDGEYE DAILY OUTLOOK - 8

 

 

 

The Hedgeye Macro Team

 


Did the US Economy Just “Collapse”? "Worst Personal Spending Since 2009"?

This is a brief note written by Hedgeye U.S. Macro analyst Christian Drake on 4/28 dispelling media reporting that “US GDP collapses to 0.7%, the lowest number in three years with the worst personal spending since 2009.”

read more

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