THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – May 14, 2012


As we look at today’s set up for the S&P 500, the range is 33 points or -1.36% downside to 1335 and 1.08% upside to 1368. 

                                            

SECTOR AND GLOBAL PERFORMANCE

 

THE HEDGEYE DAILY OUTLOOK - 1

 

THE HEDGEYE DAILY OUTLOOK - 2

 

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EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: on 5/11 NYSE -637
    • Down from the prior day’s trading of 717
  • VOLUME: on 5/11 NYSE 785.74
    • Increase versus prior day’s trading of 0.21%
  • VIX:  as of 5/11 was at 19.89
    • Increase versus most recent day’s trading of 5.63%
    • Year-to-date decrease of -15.00%
  • SPX PUT/CALL RATIO: as of 05/11 closed at 2.72
    • Up from the day prior at 1.60 

CREDIT/ECONOMIC MARKET LOOK:


TREASURIES – 10yr yields piking to 1.79% this morning and the Yield Spread (10s minus 2s) is hitting a fresh YTD low of 153bps wide (-24% from the mid-March peak when most stocks peaked). Falling rates and Yield Spread are bad for Financials on the margin – like they needed more to worry about… 

  • TED SPREAD: as of this morning 38
  • 3-MONTH T-BILL YIELD: as of this morning 0.09%
  • 10-Year: as of this morning 1.78
    • Decrease from prior day’s trading at 1.84
  • YIELD CURVE: as of this morning 1.52
    • Down from prior day’s trading of 1.58 

MACRO DATA POINTS (Bloomberg Estimates):

  • 11am: U.S. Fed to purchase $4.25-5b notes
  • 11:30am: U.S. to sell $30b 3-mo., $27b 6-mo. bills 

GOVERNMENT:

    • House not in session
    • Senate to consider motion to proceed to Export-Import Bank Reauthorization, 2pm
    • NRC discusses recommendations for containment-venting systems, rapid transfer of spent reactor fuel from pools to sealed storage casks, 9am
    • White House energy adviser Heather Zichal participates in API conference on hydraulic fracturing, 9am
    • Public comments due to CFTC on establishing minimum block sizes for certain kinds of swaps, block trades  

WHAT TO WATCH:

  • Yahoo! CEO Thompson steps down after inquiry into his academic credentials; Levinsohn is interim CEO
  • Chesapeake has 8:30am call; Co.’s $3b lifeline heaps pressure on CEO
  • Euro officials begin to consider Greek exit from currency
  • Avon says its board will respond to Coty’s offer within a week
  • LightSquared nearing bankruptcy protection filing; key creditor deadline: WSJ
  • China lowers banks’ reserve requirements to support growth
  • JPMorgan losses lead to moves in swaps indexes
  • JPMorgan executives are said to be preparing departures
  • Concho Resources to buy Permian Basin assets for $1b
  • Economy in U.S. buoyed with autos spurring glass-to-steel growth
  • Shale may double Australia’s nat-gas resources, report says
  • Disney’s “Avengers” sets second-weekend N.A. record with $103m
  • Merkel’s CDU suffers worst postwar result in biggest state
  • Quarterly deadline tomorrow for mutual, hedge funds to disclose holdings 

EARNINGS:

    • Silver Wheaton (SLW CN) 6:30am, $0.43
    • Eastern Platinum (ELR CN) 8am, ($0.01)
    • SouthGobi (SGQ CN) 8am, $0.00
    • Groupon (GRPN) 4pm, $0.01
    • Agilent (A) 4pm, $0.73
    • Air Lease (AL) 4:05pm, $0.28
    • Renren (RENN) post-mkt, $0.04 

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG) 

  • Bullish Wagers Plunge Most in 2012 on Greek Impasse: Commodities
  • Commodities Decline for Ninth Day on Greek Crisis, China Concern
  • Oil Falls to 2012 Low on Greek Debt, Saudi Call for Price Drop
  • Gold Erases This Year’s Gain as Europe Concern Boosts Dollar
  • Copper Reaches Four-Month Low Amid Greek Euro-Exit Speculation
  • Palm Oil Plunges Most in 14 Months as Europe Debt Crisis Deepens
  • Soybeans Drop to Six-Week Low as U.S. Planting Accelerates
  • Cocoa Falls in London on Increased Sales and Weakening Demand
  • Gold VIX Near 10-Month Low Amid Bets Against Stimulus: Options
  • Power Company Bond Risk Climbs on Nuclear Shutdown: Japan Credit
  • Hedge Funds Cut Bets on Oil Before Seaway Shift: Energy Markets
  • China Coal Prices Drop in May for First Time in Three Years
  • Argentina as No Claims-Nation Revealed in Repsol Losses: Energy
  • ICE Adding Grains to Lure Hedge Funds Chasing USDA Price Swings
  • Gold ETF Assets in India Top Record 100 Billion Rupees in April
  • Tanzania Considers Copper-Ore Export Ban to Focus on Processing 

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CURRENCIES


THE HEDGEYE DAILY OUTLOOK - 5

 

 

EUROPEAN MARKETS


ITALY – stocks down another -3.2% this morning puts Italy back into crash mode (down -21% from its March top); Spain is down -24% from its March top and Spanish CDS +24bps to a new record high of +540 this morning. How’s that Keynesian experiment treating everyone out there so far?

 

THE HEDGEYE DAILY OUTLOOK - 6

 

 

ASIAN MARKETS


INDIA – something not so funny happened on the way to India immediately after Bernanke decided to push easy money out to 2014 (Jan 25th Policy To Inflate date) – India started importing more inflation and real growth slowed; Sensex stopped going up in Feb = down -12.1% since; this morning’s inflation report for April was not good at +7.2% vs 6.9% in March.

 

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MIDDLE EAST


THE HEDGEYE DAILY OUTLOOK - 8

 

 

The Hedgeye Macro Team


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."

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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.

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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."

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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.

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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.

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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.

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Got Process? Zero Hedge Sells Fear, Not Truth

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

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REPLAY: Review of $EXAS Earnings Call (A Hedgeye Best Idea Long)

Our Healthcare Team made a monster call to be long EXAS - hear their updated thoughts.

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Capital Brief: 5 Things to Watch Right Now In Washington

Here's a quick look at some key issues investors should keep an eye on from Hedgeye's JT Taylor and our team of Washington Policy analysts in D.C.

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Premium insight

[UNLOCKED] Today's Daily Trading Ranges

“If I could only have one thing of the many things we have it would be my daily ranges." Hedgeye CEO Keith McCullough said recently.

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We'll Say It Again: Leave Your Politics Out of Your Portfolio

If your politics dictates your portfolio positioning, the Democrats and #NeverTrump crowd out there have had a hell of a week.

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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.

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