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
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
CURRENCIES
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?
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.
MIDDLE EAST
The Hedgeye Macro Team