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TODAY’S S&P 500 SET-UP – May 22, 2012


As we look at today’s set up for the S&P 500, the range is 42 points or -2.13% downside to 1288 and 1.06% upside to 1330. 

                                            

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 5/21 NYSE 2143
    • Up from the prior day’s trading of -1586
  • VOLUME: on 5/21 NYSE 798.10
    • Decrease versus prior day’s trading of -31.32%
  • VIX:  as of 5/21 was at 22.01
    • Decrease versus most recent day’s trading of -12.31%
    • Year-to-date decrease of -5.94%
  • SPX PUT/CALL RATIO: as of 05/21 closed at 1.58
    • Down from the day prior at 2.08 

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: as of this morning 39
  • 3-MONTH T-BILL YIELD: as of this morning 0.08%
  • 10-Year: as of this morning 1.76
    • Increase from prior day’s trading at 1.74
  • YIELD CURVE: as of this morning 1.47
    • Up from prior day’s trading at 1.46

MACRO DATA POINTS (Bloomberg Estimates):

  • 6:15am: Atlanta Fed President Lockhart talks in Hong Kong
  • 7:45am/8:55am: ICSC/Redbook retail sales
  • 10am: Richmond Fed, May, est. 11 (prior 14)
  • 10am: Existing Home Sales, Apr., est. 4.62m (prior 4.48m)
  • 10am: Existing Home Sales (M/m), Apr., est. 3.0% (prior -2.6%)
  • 11:30am: U.S. to sell 4-week bills
  • 1pm: U.S. to sell $35b 2-yr notes
  • 4:30pm: API inventories 

GOVERNMENT:

    • Republican presidential primaries in Arkansas, Kentucky
    • Senate in session, House meets in pro forma session, 10am
    • Senate Banking holds a hearing on derivatives rules required by Dodd-Frank; CFTC Chairman Gary Gensler, SEC Chairman Mary Schapiro will testify
    • Treasury Secretary Tim Geithner attends Financial Stability
    • Oversight Council mtg
    • Interior Secretary Ken Salazar, Bureau of Safety and
    • Environmental Enforcement Chief Jim Watson conduct forum on oil-well blowout preventers, federal oversight, 8am
    • NRC advisory panel subcommittee on Fukushima meets to review guidance documents on task force recommendations, 8:30am
    • FDIC Acting Chairman Martin Gruenberg speaks at American
    • Securitization Forum’s annual meeting, 9am

 WHAT TO WATCH: 

  • OECD said Europe’s debt crisis risks spiraling, damaging world economy; cuts 2012 euro-area GDP forecast to -0.1% from 0.2%
  • Facebook fell 11% to $34.03 in 2nd day of trading
  • U.S. antitrust regulators told EBay, Yelp to provide information on whether Google is competing unfairly, speeding up a probe that began a year ago, people familiar said
  • Accor agreed to sell Motel 6 hotel chain to Blackstone- managed fund for $1.9b
  • Fitch cuts Japan L-T ratings to A+; outlook negative
  • U.S. sales of existing homes probably rose in April for 1st time in 3 months to 4.61m annual rate
  • CFTC to release clearing proposal for index swaps, Gensler says
  • Merkel, Hollande head for showdown on debt at EU summit
  • U.K. inflation slowed more than economists forecast in April
  • IMF says U.K. needs more monetary stimulus, possible tax cuts
  • Former Yahoo! executive, former mutual fund manager at a unit of Ameriprise pleaded guilty to insider trading, the U.S. said
  • MetLife seen scaling back annuities as CEO Kandarian unveils his plan to improve returns
  • Spain borrowing costs rise at 6-month bill auction
  • KKR said to be close to raising $2b for second Asia fund
  • IAEA, Iran reach agreement on atomic inspections
  • No IPOs expected to price today 

EARNINGS:

    • Williams-Sonoma (WSM) 6am, $0.32
    • Express (EXPR) 7am, $0.49
    • AutoZone (AZO) 7am, $6.25
    • DSW (DSW) 7am, $0.90
    • Cracker Barrel Old Country Store (CBRL) 7am, $0.75
    • Medtronic (MDT) 7:15am, $0.98
    • Best Buy (BBY) 8am, $0.59
    • Ralph Lauren (RL) 8am, $0.85
    • Collective Brands (PSS) 4pm, $0.44
    • Analog Devices (ADI) 4pm, $0.51
    • Universal (UVV) 4pm, NA
    • Dell (DELL) 4:01pm, $0.46
    • PetSmart (PETM) 4:02pm, $0.73
    • Guess? (GES) 4:04pm, $0.26
    • Take-Two Interactive Software (TTWO) 4:05pm, $(0.54)
    • Avago Technologies (AVGO) 4:05pm, $0.63
    • Compuware (CPWR) 4:13pm, $0.14
    • HEICO (HEI) 4:30pm, $0.37
    • Qihoo 360 (QIHU) 5pm $0.15 

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG) 

  • Diamond-Seller Choksi Takes on World With Bollywood: Commodities
  • Wheat Falls as Rain in Russia and Ukraine May Aid Parched Crops
  • Oil Drops as OECD Cuts Europe Growth, Iran Agrees to Inspection
  • Gold Declines as Rally Prompts Sales and Physical Demand Falls
  • Copper Falls 0.5% in New York Trading, Declines 0.2% in London
  • Palm Oil Climbs for Fourth Day as 10% Drop Lures Investor Demand
  • Robusta Coffee Falls in London on Speculation Price Rose Too Far
  • U.S. Said to Oppose Easing Oil Sanctions at Iran Nuclear Talks
  • Oil Supplies Grow as Seaway Relief Valve Looms: Energy Markets
  • GrainCorp Climbs After Raising Full-Year Forecast to Record
  • Cotton May Drop 23% by Year-End on Inventories: Chart of the Day
  • Flint Hills Has Release at Corpus Christi Plant, NRC Filing Says
  • BHP ‘Chopping Block’ Looms for Nickel, Aluminum Assets Amid Cuts
  • Ships Deter Pirate Stalkers by Signaling Armed Guards’ Presence
  • Indonesia May Cut June Palm Oil Export Tax to 18%: Association
  • Brazil Set to Lose Out as Thailand Meets Chinese Sugar Demand 

THE HEDGEYE DAILY OUTLOOK - 4

CURRENCIES


US DOLLAR – we bought back our bullish position in the US Dollar on red yesterday and still think it offers the most asymmetry to the upside of almost any big Global Macro trade; the fallout, if we continue to be right on that, will be in the Commodities – we re-shorted Gold yesterday as its immediate-term correlation to the USD is -0.89.

THE HEDGEYE DAILY OUTLOOK - 5

EUROPEAN MARKETS

THE HEDGEYE DAILY OUTLOOK - 6

 

 

ASIAN MARKETS


JAPAN – our bearish call on Japan is starting to pick up a broader audience (launched it in March); Fitch downgrades Japan to A+ this morning for some of the wrong reasons, but who actually reads what they say anyway? bottom line is that Japan has huge fiscal/debt issues; we re-shorted Yen on Friday and that’s reacting negatively on the Fitch headline, down -0.54% (vs USD).

INDIA – nope, it’s not all about Greece/Europe folks – India’s stock market stopped going up in February and now their fiat currency is in freefall (Rupee); Sensex failed at its 1st line of (16341) resistance last night and is down -12% from its Feb top. India is not China.

THE HEDGEYE DAILY OUTLOOK - 7

 

 

MIDDLE EAST


THE HEDGEYE DAILY OUTLOOK - 8

The Hedgeye Macro Team