THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – June 15, 2012


As we look at today’s set up for the S&P 500, the range is 34 points or -1.44% downside to 1310 and 1.12% upside to 1344. 

                                            

SECTOR AND GLOBAL PERFORMANCE

 

THE HEDGEYE DAILY OUTLOOK - 1

 

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EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: on 6/14 NYSE 1229
    • Up from the prior day’s trading of -1219
  • VOLUME: on 6/14 NYSE 779.39
    • Increase versus prior day’s trading of 10.22%
  • VIX:  as of 6/14 was at 21.68
    • Decrease versus most recent day’s trading of -10.67%
    • Year-to-date decrease of -7.35%
  • SPX PUT/CALL RATIO: as of 6/14 closed at 1.23
    • Down from the day prior at 2.08 

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: as of this morning 37
  • 3-MONTH T-BILL YIELD: as of this morning 0.10%
  • 10-Year: as of this morning 1.61
    • Decrease from prior day’s trading at 1.64
  • YIELD CURVE: as of this morning 1.32
    • Down from prior day’s trading at 1.35 

MACRO DATA POINTS (Bloomberg Estimates):

  • 8:30am: Empire Manufacturing, June, est. 13 (prior 17.09)
  • 9am: Total Net TIC flows, April, no est. (prior -$49.9b)
  • 9am: Net Long-Term TIC Flows, April, est. $45b (prior $36.2b)
  • 9:15am: Industrial Production, May, est. 0.1% (prior 1.1%)
  • 9:15am: Capacity Utilization, May, est. 79.2% (prior 79.2%)
  • 9:15am: Manufacturing Production, May, est. -0.1% (prior 0.6%)
  • 9:55am: University of Michigan Confidence, June, est. 77.5 (prior 79.3)
  • 1pm: Baker Hughes rig count 

GOVERNMENT:

    • President Obama travels to Chicago
    • Mitt Romney begins bus tour in New Hampshire
    • EPA, following court order, expected to announce proposal for new rule on soot pollution
    • House meets in pro forma session; Senate in session
    • Senate Finance meets on tax reform, energy policy, 10am
    • FERC, NRC meet on nuclear power, cybersecurity, station blackout rulemaking and power-grid reliability, 9:30am

WHAT TO WATCH:  

  • EU Leaders to call for “further urgent measures” to aid growth
  • Yammer agrees to be bought by Microsoft for >$1b: WSJ
  • Hong Kong Exchanges agrees to buy LME for $2.2b
  • Russell Indexes posts updates to list of additions/deletions for reconstitution
  • U.S. industrial production probably cooled in May
  • Safeway to hold call today on financial strategy
  • Greek Election, G-20 Summit, Fed Meeting: Week Ahead June 16-23  

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

 

COMMODITIES – thank God we covered all our shorts there ahead of proactively predictable central planning behavior; rallies in Oil, Gold, Copper look like those in European Equities, right to the walls of immediate-term TRADE resistance as the USD moves to immediate-term TRADE oversold at $81.83; very dangerous spot for Correlation Risk to come back on in a hurry. 

  • Gold Traders Bullish as Hedge Funds Increase Wagers: Commodities
  • HKEx to Buy LME for $2.15 Billion in First Commodity Venture
  • Copper Set for First Weekly Gain in Seven on Stimulus Outlook
  • Oil Gains a Second Day on Stimulus Speculation, OPEC Output Call
  • Gold Set for Best Run Since August on Stimulus Bet, Greece Vote
  • Soybeans Rise on Demand Gain From U.S. Processors and Importers
  • Cocoa at a Four-Month High as Ivory Coast Supply May Be Limited
  • Malaysia Rejects Bid to Cancel Lynas Rare-Earth Refining Permit
  • China Said to Buy 1 Million Tons of U.S. Cotton for Reserves
  • Bernanke’s Inflation Validated as Commodities Retreat With Hawks
  • Petrobras Worst Big Oil Bet on Deepwater Disappointments: Energy
  • Iron Ore to Slump as China Slows, Eurofer Says: Chart of the Day
  • Oil Rout Has China Hoarding Most Since Olympics: Energy Markets
  • Hedge Funds Increase Wagers on Gold Rally
  • OPEC Decision Puts Onus on Saudi Arabian Cuts If Prices Fall

THE HEDGEYE DAILY OUTLOOK - 4

 

 

CURRENCIES

 

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EUROPEAN MARKETS


EUROPE – now that the central planning “smoothing” mechanism has backstopped markets for another 12 hrs of trading, pretty much every single European squeeze index (Spain, Italy, Greece, etc.) has rallied right back to a wall of immediate-term TRADE resistance, and so has the Euro at 1.26; into the “event” we are at the end of the runway; not good.

 

THE HEDGEYE DAILY OUTLOOK - 6

 

 

ASIAN MARKETS


ASIA – interestingly, but maybe not surprisingly, Japan didn’t go up on that “news” – what will be left over for them after Geithner, the IMF, and Europe blows whatever bullets they have left on Greece/Spain/Italy? Rest of Asia was eerily mixed (China +0.5%, KOSPI -0.7%).

 

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MIDDLE EAST


THE HEDGEYE DAILY OUTLOOK - 8

 

 

 

The Hedgeye Macro Team


Did the US Economy Just “Collapse”? "Worst Personal Spending Since 2009"?

This is a brief note written by Hedgeye U.S. Macro analyst Christian Drake on 4/28 dispelling media reporting that “US GDP collapses to 0.7%, the lowest number in three years with the worst personal spending since 2009.”

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7 Tweets Summing Up What You Need to Know About Today's GDP Report

"There's a tremendous opportunity to educate people in our profession on how GDP is stated and projected," Hedgeye CEO Keith McCullough wrote today. Here's everything you need to know about today's GDP report.

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Cartoon of the Day: Crash Test Bear

In the past six months, U.S. stock indices are up between +12% and +18%.

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GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist

“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.

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Exact Sciences Up +24% This Week... What's Next? | $EXAS

We remain long Exact Sciences in the Hedgeye Healthcare Position Monitor.

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Inside the Atlanta Fed's Flawed GDP Tracker

"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.

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Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

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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'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

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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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