TODAY’S S&P 500 SET-UP – May 15, 2012
As we look at today’s set up for the S&P 500, the range is 37 points or -0.70% downside to 1329 and 2.07% upside to 1366.
SECTOR AND GLOBAL PERFORMANCE
EQUITY SENTIMENT:
- ADVANCE/DECLINE LINE: on 5/14 NYSE -2114
- Down from the prior day’s trading of -637
- VOLUME: on 5/14 NYSE 802.79
- Increase versus prior day’s trading of 2.17%
- VIX: as of 5/14 was at 21.87
- Increase versus most recent day’s trading of 9.95%
- Year-to-date decrease of -6.54%
- SPX PUT/CALL RATIO: as of 05/14 closed at 2.50
- Down from the day prior at 2.72
CREDIT/ECONOMIC MARKET LOOK:
TREASURIES – We shorted the long-bond (TLT) yesterday as our model signaled immediate-term TRADE overbought with the 10yr capitulating intraday at 1.77%. This morning’s bounce is to 1.79% and there’s no mean reversion resistance to 1.89%. Growth Slowing, globally, obviously gets priced in at the most painful pt of the pain trade (which was down).
- TED SPREAD: as of this morning 37
- 3-MONTH T-BILL YIELD: as of this morning 0.09%
- 10-Year: as of this morning 1.80
- Increase from prior day’s trading at 1.76
- YIELD CURVE: as of this morning 1.54
- Up from prior day’s trading of 1.50
MACRO DATA POINTS (Bloomberg Estimates):
- 7:30am/8:55am: ICSC/Redbook weekly sales
- 8:30am: CPI (M/m), Apr., est. 0.0% (prior 0.3%)
- 8:30am: Empire Manuf., May, est. 9 (prior 6.56)
- 8:30am: Advance Retail Sales, Apr., est. 0.1% (prior 0.8%)
- 9am: TIC Flows, Mar. (prior $107.7b)
- 9am: Long-term TIC Flows, Mar., est. $32.5b (prior $10.1b)
- 9:30am: Fed’s Duke speaks on housing in Washington
- 10am: Business Inventories, Mar., est. 0.4% (prior 0.6%)
- 10am: NAHB Housing Market Index, May, est. 26 (prior 25)
- 11am: Fed to sell $8b-$8.75b notes in 2/15/2014 to 5/31/2014 range
- 11:30am: U.S. to sell $30b 4-week bills
- 4:30pm: API inventories
GOVERNMENT:
- GOP presidential primary elections in Nebraska, Oregon
- President Obama delivers remarks at National Peace Officers Memorial Service, U.S. Capitol, 11am
- House, Senate in session:
- Senate Finance holds hearing on effects of tax reform on tribes and territories, 10am
- Trial of EPA lawsuit against Anadarko Petroleum seeking $25b to clean up as many as 2,772 polluted sites, begins in N.Y., 9am
- NRC meets on developing guidance for U.S. nuclear power plants in wake of the Fukushima Dai-Ichi nuclear accident, 9am
- IRS holds hearing on how and when some aspects of Foreign Account Tax Compliance Act will be implemented
- Comment period ends on proposed USDA rules to boost beef exports, 5pm
WHAT TO WATCH:
- Euro-area GDP unchanged in 1Q from prior qtr; est. drop 0.2%
- German first-quarter GDP grew five times more than forecast
- Moody’s cut ratings on 26 Italian banks, kept outlook neg.
- Facebook said to plan to raise IPO price range to $34- $38/shr
- JPMorgan said to weigh bonus clawbacks after $2b loss
- Coty withdraws $10.7b offer for Avon on “lack of engagement”
- China foreign investment falls in sixth monthly drop
- Groupon 1Q profit beat ests. as intl sales expanded
- Hertz’s bid for Dollar Thrifty seen doubling in price
- Eastman Kodak seeks interest in patents by today
- U.S. retail sales probably slowed in April on weather, jobs
- Amylin said to attract interest from Pfizer, AstraZeneca, Sanofi
- Euro chiefs may offer leniency to ‘functioning’ Greek govt.
- MSCI announces index changes, 5pm or later
- Deadline for funds to disclose quarterly holdings in 13-F filings
- Credit-card monthly charge-off data released by banks
- JPMorgan, Morgan Stanley among cos. holding annual meetings
EARNINGS:
- Home Depot (HD) 6am, $0.65 -- Preview
- Dick’s Sporting Goods (DKS) 7:30am, $0.38
- Saks (SKS) 8am, $0.18
- TJX (TJX) 8:34am, $0.54
- Valspar (VAL) 8:40am, $0.82
- Alacer Gold (ASR CN) 9:28am, $0.14
- Carlyle Group (CG) Pre-mkt
- Acxiom (ACXM), $0.20 Pre-mkt
- Nationstar Mortgage Holdings (NSM) Pre-mkt
- JC Penney Co (JCP) 4pm, ($0.08)
- Sina (SINA) 4:30pm, ($0.22)
- SEMAFO (SMF CN) 4:50pm, $0.10
- Ralcorp Holdings (RAH) 5:44pm, $0.85
- Boardwalk REIT (BEI-U CN) 5:46pm, C$0.61
- Centerra Gold (CG CN) Post-mkt, $0.04
- Tumi Holdings (TUMI) Post-mkt
- Pan American Silver (PAA CN), $0.51
COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)
- Lead Shortages Loom on Record Demand for Batteries: Commodities
- Naimi’s $100 Oil Target Challenged by Saudi Heat: Energy Markets
- Oil Trades Near Five-Month Low on Forecast of U.S. Supply Gain
- Copper Seen Gaining on Stronger-Than-Estimated German Expansion
- Gold Seen Gaining as Plunge to Lowest This Year Spurs Investment
- Coffee Nears a Three-Month High as Prices in Vietnam Advance
- Soybeans Rebound From Six-Week Low as U.S., Brazil Exports Rise
- Rubber Declines to Four-Month Low as Greek Impasse Saps Demand
- Japan to Ration Power Coping With Reactor Shutdowns: Energy
- Obama Asked by Environmentalists to Halt Shell’s Arctic Drilling
- Cocoa Grindings in Brazil Advance to Record, Hartmann Says
- Japan Seeks to Buy Most Milling Wheat in 4 Months in Tender
- Biggest Ship Hedge Fund Turns Bullish on Supertankers: Freight
- Palm Oil Gains on Speculation Demand to Climb Ahead of Ramadan
- Sugar-Cane Area in India’s Biggest Producer to Drop This Year
- Chesapeake’s Loan Exceeds Highest Bond Yield: Corporate Finance
CURRENCIES
EUROPEAN MARKETS
EUROPE – covered my Italy short yesterday and have covered both France and Spain shorts as well as we are getting immediate-term TRADE oversold signals in MIB, CAC, and IBEX of 13,629, 3049, and 6726, respectively. Levels and timing matter – Italy’s Stagflation this morning notwithstanding (GDP down -1.3% y/y w/ inflation +3.7%), manage the risk of the bearish range, proactively.
ASIAN MARKETS
JAPAN – capitulation? Nikkei225 down another -0.8% overnight, leading losers in Asia (which stabilized overall on FDI in China slowing at a slower rate in April). The Nikkei is down 20 of the last 27 trading days (down -13.2%) and few in the manic media have even mentioned it. Keep your eyes on the island importer of oil and Keynesian economics.
MIDDLE EAST
The Hedgeye Macro Team