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THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – June 21, 2012


As we look at today’s set up for the S&P 500, the range is 29 points or -1.67% downside to 1333 and 0.47% upside to 1362. 

                                            

SECTOR AND GLOBAL PERFORMANCE

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EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: on 6/20 NYSE 10
    • Down from the prior day’s trading of 2074
  • VOLUME: on 6/20 NYSE 751.15
    • Decrease versus prior day’s trading of -2.71%
  • VIX:  as of 6/20 was at 17.24
    • Decrease versus most recent day’s trading of -6.20%
    • Year-to-date decrease of -26.32%
  • SPX PUT/CALL RATIO: as of 6/20 closed at 1.90
    • Up from the day prior at 1.54 

CREDIT/ECONOMIC MARKET LOOK:


2YR – this came up last night; we talked about it as the leading indicator for the US Fiscal Cliff; this morning, the 2yr popped above our intermediate-term TREND line of resistance of 0.30%. This will be very interesting to watch as US GDP Growth continues to slow (the denominator in deficit/GDP drives the #1 fundamental risk ratio higher). 

  • TED SPREAD: as of this morning 39
  • 3-MONTH T-BILL YIELD: as of this morning 0.08%
  • 10-Year: as of this morning 1.64
    • Decrease from prior day’s trading at 1.66
  • YIELD CURVE: as of this morning 1.34
    • Down from prior day’s trading at 1.35 

MACRO DATA POINTS (Bloomberg Estimates):

  • 8:30 am: Initial Jobless Claims, June 16, est. 383k (prior 386K)
  • 8:30 am: Continuing Claims, June 9, est. 3278k (prior 3278k)
  • 9:45 am: Bloomberg Consumer Comfort, June 17 (prior -36.4)
  • 9:45 am: Bloomberg Economic Expectations, June (prior -1)
  • 10am: Philadelphia Fed, June, est. 0.0 (prior -5.8)
  • 10am: Existing Home Sales, May, est. 4.57m (prior 4.62m)
  • 10am: House Price Index M/m, April, 0.4% (prior 1.8%)
  • 10am: Leading Indicators, May, 0.1% (prior -0.1%)
  • 10am: Freddie Mac mortgage rates
  • 10:30am: EIA natural gas change
  • 11am: Fed to purchase $4.25b-$5.25b notes in 6/30/2018-5/15/2020 range
  • 1pm: U.S. to sell $7b 30-yr TIPS (reopening) 

GOVERNMENT:

    • Supreme Court issues decisions today
    • CFTC holds open meeting on regulation of swaps, derivatives
    • House, Senate in session
    • Senate Banking hears from SEC Chairman Schapiro on proposals to overhaul money market mutual funds, 10am
    • House Financial Services panel holds hearing on supervision of money services businesses, 9:30am 

WHAT TO WATCH: 

  • Samaras to name new Greek govt., Vassilios Rapanos, chairman of National Bank of Greece, to become finance minister
  • WTI crude oil falls below $80 for first time since Oct.
  • Spain 2014 bonds avg yield 4.706% vs 2.069% in March sale
  • Sales of previously owned U.S. homes probably fell in May
  • U.K. retail sales rose 1.4%, beating est. 1.2%
  • SEC said to depose SAC’s Cohen in insider-trading probe
  • Philip Morris cuts 2012 EPS forecast on currency swings
  • Onyx wins FDA advisory panel backing for blood-cancer drug
  • Invensys says it’s no longer in any discussions after approach by Emerson
  • BlueMountain said to help unwind JPMorgan’s losing trades
  • MSCI puts Greece on review for potential reclassification as Emerging Market
  • China manufacturing may shrink for an eighth month in June
  • EMA expected to make drug-safety/approval decisions today/tmw
  • UPS to begin offer in $6.5b TNT Express takeover tomorrow
  • New Zealand GDP rises 1.1% Q/q, fastest in five years
  • Euro-area finance ministers meet in Luxembourg to discuss financial transaction and energy taxes and the debt crisis 

EARNINGS:

    • Rite Aid (RAD) 7am, $(0.04)
    • ConAgra Foods (CAG) 7:30am, $0.50
    • CarMax (KMX) 7:35am, $0.53    

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG

 

OIL – is it a bird, a plane, or demand? Or is it the Dollar? Or supply? The crash in oil (WTIC -26% from $108) is highly correlated to the USD. Currently, on a 2-mth duration, USD/WTIC = -0.94. Get the Dollar right, you get oil right. Immediate-term TRADE oversold lines for WTIC and Brent at $80.57 and $91.20. Sell all bounces. It’s a Bernanke Bubble. 

  • Founder of $125 Billion Gold ETPs Stymied on Copper: Commodities
  • Oil Drops Below $80 to Eight-Month Low on U.S. Supply, Europe
  • Commodities Slump to 19-Month Low as U.S. Growth Outlook Weakens
  • Copper Reaches One-Week Low on China Index and Fed Forecast Cut
  • Gold Drops for Third Day as Fed Opts to Extend Operation Twist
  • Sugar Falls as Rains May Ease in Top Grower Brazil; Coffee Drops
  • Corn Drops as Slowing U.S. Economic Growth May Cut Ethanol Use
  • Marcellus Gas Cuts Price Premiums to Decade Lows: Energy Markets
  • Gazprom Bond Sale Biggest Since ’09 as Yields Dip: Russia Credit
  • China Looks to Build Rare-Earths Reserves to Stabilize Prices
  • Coffee Harvest in India Seen Falling From Record on Dry Weather
  • Subsidies Boost Ambani With Record Diesel Sales: Corporate India
  • China’s Hungry Pigs Lead to Surfeit of Soy Oil: Chart of the Day
  • Crude Drops Below $80 to Eight-Month Low
  • Bauxite, Nickel-Ore Imports by China Climb to Record in May
  • Palm Oil Declines From Three-Week High on Fed’s Operation Twist
  • Chinese Seek Duty on U.S. Silicon Expanding Trade Fight: Energy

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CURRENCIES

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EUROPEAN MARKETS

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ASIAN MARKETS


CHINA – down another -1.4% last night after another bad PMI number and ongoing #GrowthSlowing signals on the East side of the world. Germany’s PMI print of 44.7 for June reflects this global slowing; so does the long end of the UST curve. It’s only a matter of time before Equities mean revert lower.

 

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MIDDLE EAST


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The Hedgeye Macro Team