TODAY’S S&P 500 SET-UP – May 18, 2012
As we look at today’s set up for the S&P 500, the range is 41 points or -0.14% downside to 1303 and 3.00% upside to 1344.
SECTOR AND GLOBAL PERFORMANCE
EQUITY SENTIMENT:
- ADVANCE/DECLINE LINE: on 5/17 NYSE -2242
- Down from the prior day’s trading of -1037
- VOLUME: on 5/17 NYSE 945.14
- Increase versus prior day’s trading of 8.33%
- VIX: as of 5/17 was at 24.49
- Increase versus most recent day’s trading of 9.97%
- Year-to-date increase of 4.66%
- SPX PUT/CALL RATIO: as of 05/17 closed at 2.30
- Down from the day prior at 2.34
CREDIT/ECONOMIC MARKET LOOK:
- TED SPREAD: as of this morning 37
- 3-MONTH T-BILL YIELD: as of this morning 0.09%
- 10-Year: as of this morning 1.73
- Increase from prior day’s trading at 1.70
- YIELD CURVE: as of this morning 1.43
- Up from prior day’s trading at 1.40
MACRO DATA POINTS (Bloomberg Estimates):
- 11am: Fed to purchase $4.5b-$5.25b notes in 8/15/2020 to 5/15/2022 range
- Baker Hughes rig count, 1pm
GOVERNMENT:
- President Obama welcomes leaders of Germany, Japan, other nations for two days of meetings at Camp David, Md.
- Obama meets with newly elected French President Francois Hollande at the White House, TBA
- Obama speaks at Chicago Council on Global Affairs agriculture event, 10:15am
- House in session:
- Senate not in session
- House Financial Svcs. panel holds hearing on heightened capital requirements under Dodd-Frank, 9:30am
- CFTC holds closed meeting on enforcement matters, 10am
WHAT TO WATCH:
- Facebook raises $16b in record technology offering, sold 421.2m shrs at $38 each; set to begin trading at 11am
- Facebook underwriters said to split ~$176m in fees
- JPMorgan may lose $5b on derivative trades: WSJ
- Santander, BBVA among Spanish banks downgraded by Moody’s
- Greece’s credit rating downgraded 1 level by Fitch
- Tsipras tells the WSJ he sees little chance EU stops funding for Greece, but if it does, country would have to stop paying creditors
- Warren Buffett said to have pursued ResCap purchase before bankruptcy
- American Airlines merger with US Airways is inevitable, a union expert says
- China home prices fell in a record number of cities last month, car dealers posted inventory levels that foreshadowed deeper price cuts
- Obama meets today for the 1st time with new French president Francois Hollande ahead of G-8 summit
- No IPOs expected to price today
- NATO Summit, China, JPMorgan, Formula 1: Week Ahead May 19-26
EARNINGS:
- Hibbett Sports (HIBB) 6:30am, $0.92
- Donaldson (DCI) 7am, $0.43
- Foot Locker (FL) Pre-mkt, $0.74
- ANN (ANN) 8am, $0.89
- Raven Industries (RAVN) 9:10am $0.89
COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)
OIL – get the US Dollar right, you’ll get everything else big beta right. We’ve been making this call (Deflating The Inflation) since March and now you’re seeing Oil (Brent in particular) capitulate on the downside (Brent $106.79 = down -15% in a straight line w/ the USD having a record 12 consecutive up day move). Major perf problems in the commodity hedge fund business.
- Corn Traders Most Bullish Since March on U.S. Heat: Commodities
- Gold Advances a Second Day as Europe Debt Concern Boosts Demand
- Oil Heads for Weekly Loss on Debt Crisis; Brent Spread Narrows
- Japan Aluminum Buyers Said to Face Highest Premiums Since 1996
- Copper Narrows Third Weekly Drop on Speculation About a Rebound
- Wheat Seen Declining as Harvest in U.S. May Increase Supplies
- Robusta Coffee Climbs as Vietnamese Beans Reach Seven-Month High
- U.S. Farmers Union Demands 30-Day Review of CME Trading Plan
- YPF Bonds Sink as Buyback Called Into Doubt: Argentina Credit
- Seaborne Trade in Coal is Seen by SSY Expanding 6.7% This Year
- Chesapeake Turns to Jefferies’ Eads in $28 Billion Deals: Energy
- Hong Kong Bourse Should Lose Monopoly If It Wins LME, Rival Says
- LNG Peak Seen as Mideast Return Meets Japan Need: Energy Markets
- Corn Traders Bullish on U.S. Heat Concern
- Soybean Trendline Signals Rally Near Record: Technical Analysis
CURRENCIES
EUROPEAN MARKETS
EUROPE – it’s a race to the bottom now between the biggest Petro-Dollar equity market in the world (Russia) and Spain – both are crashing obviously, and both are down -26% since March. We have immediate-term TRADE oversold signals in pretty much everything that ticks in Europe (other than Greece and Hungary), including the EUR/USD.
ASIAN MARKETS
JAPAN – Japanese Equities hammered again last night (down another -3% making it a -16% draw-down from the down Yen is good for Exports thing?); we still think that the sovereign debt and fiscal crisis in Japan will be consensus news by year-end.
MIDDLE EAST
The Hedgeye Macro Team
