THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – May 30, 2012


As we look at today’s set up for the S&P 500, the range is 21 points or -1.23% downside to 1316 and 0.34% upside to 1337. 

                                            

SECTOR AND GLOBAL PERFORMANCE

 

THE HEDGEYE DAILY OUTLOOK - 1

 

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EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: on 5/29 NYSE 1709
    • Up from the prior day’s trading of 114
  • VOLUME: on 5/29 NYSE 714.24
    • Increase versus prior day’s trading of 19.91%
  • VIX:  as of 5/29 was at 21.03
    • Decrease versus most recent day’s trading of -3.35%
    • Year-to-date decrease of -10.13%
  • SPX PUT/CALL RATIO: as of 05/29 closed at 1.71
    • Down from the day prior at 2.03 

CREDIT/ECONOMIC MARKET LOOK:


GROWTH – 1st Commodities, then Bonds, and now Stocks getting it; the Old Wall’s economists do not, yet – but they will; we’ve yet to see Hyman or Hatzius cut their US GDP Growth estimates to where we or the bond market has them (1.7-1.9% US GDP is our best case, for now). Looking for that consensus capitulation, blaming Europe.

 

  • TED SPREAD: as of this morning 39
  • 3-MONTH T-BILL YIELD: as of this morning 0.08%
  • 10-Year: as of this morning 1.68
    • Decrease from prior day’s trading at 1.74
  • YIELD CURVE: as of this morning 1.40
    • Down from prior day’s trading at 1.46 

MACRO DATA POINTS (Bloomberg Estimates):

  • 7am: MBA Mortgage Applications, week of May 25
  • 7:45am/8:55am: ICSC/Redbook weekly sales
  • 10am: Pending Home Sales (M/m), Apr., est. 0.0% (prior 4.1%)
  • 10am: Pending Home Sales (Y/y), Apr., est. 22.0% (prior 10.8%)
  • 11am: Fed to purchase $4.5b-$5.25b notes in 8/15/2020 to 5/15/2022 range
  • 11:30am: U.S. to sell $25b 52-week bills
  • 11:30am: U.S. to sell 4-week bills
  • 1:20pm: Fed’s Fisher speaks on economy in San Antonio, Texas
  • 1:30pm: Fed’s Dudley to speak on regional economy in New York
  • 4:30pm: Fed’s Rosengren speaks in Worcester, Mass
  • 5pm: API weekly petroleum inventories

GOVERNMENT:

    • House returns to work following recess; Senate out until Jun 4
    • President Obama signs U.S. Export-Import Bank reauthorization
    • Commerce Dept. announces level of wind tower import tariffs
    • Mitt Romney wins Texas, giving him enough delegates to clinch Republican nomination

WHAT TO WATCH:

  • Euro-area economic confidence dropped more than est. in May
  • America Movil discussed cooperation with KPN before offer
  • Spain’s Ordonez says Bankia bailout terms still unknown
  • Pep Boys terminates $1b merger with Gores Group
  • Fiat to list in NY after CNH unit merger
  • Apple’s CEO says focus is TV, sees closer Facebook ties
  • Euro-area loans grew at slowest pace in 2 yrs. in April
  • Atlantic Broadband said to seek $1.4b sale
  • RIM shares plummet after surprise 1Q op loss
  • BankAtlantic must face SEC disclosure fraud lawsuit
  • Facebook’s Zuckerberg drops off Billionaires Index

EARNINGS:

    • Fresh Market (TFM) 6am, $0.36
    • Yingli Green (YGE) 6am, $(0.22)
    • CorVel (CRVL) 6:15am
    • Booz Allen Hamilton (BAH) 7am, $0.40
    • Daktronics (DAKT) 7am, $0.03
    • RBC Bearings (ROLL) Bef-mkt, $0.63
    • TiVo (TIVO) Aft-mkt, $(0.16)
    • Lions Gate Entertainment (LGF) Aft-mkt, $0.22

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • Marubeni Follows Glencore to Boost Grain Trading: Commodities
  • Brent Falls to 5-Month Low as U.S. Supplies Seen at 22-Year High
  • Gold Falls a Second Day as Europe’s Debt Crisis Boosts Dollar
  • Copper Drops as Spain’s Credit Rating Revives Crisis Concern
  • Wheat Slides as U.S. Harvest Accelerates While Soybeans Decline
  • Cocoa Falls as Ivory Coast’s Mid-Crop Harvesting Gathers Pace
  • Felda Said to Seek $3.2 Billion in Year’s Second-Biggest IPO
  • Iraq Begins First Oil, Gas Exploration Auction Since Saddam Era
  • Japan Aluminum Buyers Said to Agree to Record Quarterly Fee
  • Standard & Poor’s GSCI Index Drops to Lowest Since October
  • Dollar’s Gold Backing Drops With Metal’s Price: Chart of the Day
  • Pakistan Seen Shipping 100,000 Tons Sugar by September on Prices
  • ONGC Plans Shale, Deepwater Strategy in Bid to Double Production
  • Oil Drops as U.S. Stockpiles Seen Rising
  • Rubber Inventory Climbing in China as Slowdown Cuts Demand
  • Rubber Drops as Rising Thai Supply Adds to Chinese Stockpiles
  • Palm Oil Set for Worst Monthly Loss Since 2009 on China Outlook

THE HEDGEYE DAILY OUTLOOK - 4

 

 

CURRENCIES

 

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EUROPEAN MARKETS


SPAIN – still crashing. IBEX down another -1.4% (immediate-term TRADE oversold) to a fresh new low (down -31% from the Feb top when Global Growth Slowing became readily apparent in our models); Russia down -27% from the March top and Italian bond yields ripping a move > 6.00% this morning; there is no “de-coupling” from this.

 

THE HEDGEYE DAILY OUTLOOK - 6

 

 

ASIAN MARKETS


CHINA – but the rumors of Chinese stimulus have, at least for today; the Shanghai Comp backed off at an important TRADE line of resistance (2393) last night and the Hang Seng got crushed again, down -1.9% - no follow through from the USA day of no volume US Equity buying (US volumes down -26% vs our composite avg of the down days in May).

 

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MIDDLE EAST


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The Hedgeye Macro Team


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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'

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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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