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TODAY’S S&P 500 SET-UP – June 25, 2012


As we look at today’s set up for the S&P 500, the range is 17 points or -1.27% downside to 1318 and 0.00% upside to 1335. 

                                            

SECTOR AND GLOBAL PERFORMANCE

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EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: on 6/22 NYSE 1140
    • Up from the prior day’s trading of -1901
  • VOLUME: on 6/22 NYSE 1577.41
    • Increase versus prior day’s trading of 82.18%
  • VIX:  as of 6/22 was at 18.11
    • Decrease versus most recent day’s trading of -9.81%
    • Year-to-date decrease of -22.61%
  • SPX PUT/CALL RATIO: as of 6/22 closed at 1.65
    • Down from the day prior at 1.81 

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: as of this morning 38
  • 3-MONTH T-BILL YIELD: as of this morning 0.08%
  • 10-Year: as of this morning 1.62
    • Decrease from prior day’s trading at 1.67
  • YIELD CURVE: as of this morning 1.33
    • Down from prior day’s trading at 1.37 

MACRO DATA POINTS (Bloomberg Estimates):

  • 8:30am: Chicago Fed Nat Activity Index, May (prior 0.11)
  • 10am: New Home Sales, May, est. 345k (prior 343k)
  • 10:30am: Dallas Fed Manf. Activity, June (prior -5.1)
  • 11am: Fed to sell $8-8.75b notes in 3/15/2014-10/31/2014 range
  • 11:30am: Treasury to sell $30m 3-mo. bills, $27m 6-mo.
  • 4pm: USDA crop progress report 

GOVERNMENT:

    • Washington Week Ahead: Supreme Court may rule on health law
    • Supreme Court may rule on challenge to health-care law
    • House, Senate in session
    • Senate to take up long-term flood insurance reauthorization
    • Heather Zichal, White House energy and climate adviser, speaks on hydraulic fracturing at New Policy Institute, 12pm
    • Export-Import Bank President Fred Hochberg speaks at Center for American Progress, 12pm
    • Treasury Undersecretary for International Affairs Lael Brainard  speaks at Women’s Foreign Policy Group discussion on “International Financial Diplomacy,” 1pm
    • George Walz, VP at Financial Industry Regulatory Authority’s Office of Risk, joins panel discussion on “FINRA Examination Data Collection Process,” 1:30pm
    • HHS, CMS advisory panel meets on Medicare Economic Index price, productivity measurements, 8:30am
    • WTO dispute settlement body meets in Geneva
    • International Trade Commission to say whether it will review findings by 2 of its judges that MSFT, AAPL infringed Motorola Mobility patents
    • Governmental Accounting Standards Board meets in Conn. to vote on state, local pension-reporting rules that would reduce funded levels of plans  

WHAT TO WATCH:  

  • AB Inbev said to near Modelo takeover for more than $12b
  • Supreme Court announces decisions; may rule on challenge to health-care law: preview
  • ITC to say whether it will review findings that MSFT, AAPL infringed Motorola Mobility patents
  • Fitch downgrades Republic of Cyprus to junk
  • European leaders prepare for summit on currency union
  • Tropical Storm Debby may spare Gulf of Mexico oilfields
  • Russell Indexes to post final membership lists for indexes
  • Shire falls after FDA unexpectedly approved a generic version of its hyperactivity medicine Adderall
  • Pixar’s “Brave” opens at No. 1 in U.S./Canada theaters with $66.7m for parent Walt Disney
  • JPMorgan to let CIO make potentially risky investments: WSJ
  • Sales of new homes probably rose in May for 2nd month to 346k annual rate, according to median forecast by Bloomberg News
  • New York settled a lawsuit for $410m with J. Ezra Merkin over claims that Merkin funds secretly placed client money with Bernard L. Madoff
  • Banks need “healthy push” to avoid prolonging crisis: BIS
  • Vivendi, whose mgmt met during the weekend to discuss strategy, said it had nothing to update investors with
  • Bain said to pay $1b for 50% stake in Japanese TV company
  • India plans measures to support rupee, spurring inflation
  • No IPOs expected to price today: Bloomberg data
  • Weekly Industry Agendas: Finance, Media/Entertainment, Industrials, Energy, Real Estate, Consumer, Health, Transports, Technology, IPOs, Canada Oil & Gas, Canada Mining
  • U.S. Health Care, EU Summit, Google: Week Ahead June 23-30 

EARNINGS:

    • HB Fuller (FUL) After-mkt, $0.55
    • Synnex (SNX) 4:01pm, $0.90
    • Apollo Group (APOL) 4:05pm, $0.97  

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG 

  • Bulls Proven Wrong as Prices Slump Into Bear Market: Commodities
  • Gold Set to Decline in London as Stronger Dollar Curbs Demand
  • Oil Trades Below $80 for a Third Day Amid European Debt Concern
  • Grains Climb as Dry Weather Wilts U.S. Crops, Threatening Supply
  • Copper Seen Advancing for First Day in Four Before EU Meeting
  • Sugar Rebounds on Speculation Prices Fell Too Far; Coffee Slides
  • Fonterra Farmers Approve Plan to Open Exporter to Equity Markets
  • Morgan Stanley Expects Corn, Soybean Prices to Advance on Supply
  • Hong Kong’s LME Deal Spurs Industry’s Steepest Slump: Real M&A
  • Coal Plant Plunge Threatens Billions in Pollution Spend: Energy
  • Hedge Funds Turning Bearish Push Oil Below $80: Energy Markets
  • Florida Orange Trees Threatened on Tropical Storm Debby Floods
  • Oil to End Commodity Currencies’ Divergence: Chart of the Day
  • China Faces Summer Steel Output Cut on Prices: Chart of the Day
  • Silver Seen Extending Drop as Support Breaks: Technical Analysis

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CURRENCIES

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EUROPEAN MARKETS


RUSSIA – get the Dollar and the Petro price right, and you get the Petro-Dollar equities right – this is obvious in Russian stocks (next to Egypt’s -9% drop last wk, the RTSI led losers at -5% and has now eclipsed Spain on my drawdown sheet for 2012 at -27% from YTD top vs Spain and Italy at -24% and -22%).

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ASIAN MARKETS


CHINA  – Shanghai Composite starting to lead losers in Global Equities as #GrowthSlowing accelerates on the downside (down another -1.6% overnight; down -9.2% since beginning of May) – we highly doubt Bernanke or Geithner have a central plan for China, but you never know…

INDIA – Keynesian economic disasters tend to end with currency debauchery, then local crisis – India’s Rupee is in the middle of one of those and it’s a huge problem domestically as inflation is priced in local FX; but do not worry, India is now saying they are unveiling a “dozen steps to save the Rupee” – almost like a Tony Robbins thing I guess…

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MIDDLE EAST


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The Hedgeye Macro Team