THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – July 3, 2012


As we look at today’s set up for the S&P 500, the range is 36 points or -2.09% downside to 1337 and 0.55% upside to 1373. 

                                            

SECTOR AND GLOBAL PERFORMANCE


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EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: on 07/02 NYSE 1255
    • Down from the prior day’s trading of 2281
  • VOLUME: on 07/02 NYSE 736.11
    • Decrease versus prior day’s trading of -32.74%
  • VIX:  as of 07/02 was at 16.80
    • Decrease versus most recent day’s trading of -1.64%
    • Year-to-date decrease of -28.21%
  • SPX PUT/CALL RATIO: as of 07/02 closed at 1.65
    • Up from the day prior at 1.35 

CREDIT/ECONOMIC MARKET LOOK:


TREASURIES – the bond market doesn’t have to chase performance like the entire equity community seems to; Treasuries saw yesterday’s ISM bomb (49.7 June vs 53.5 in May) for what it was #GrowthSlowing; that’s our only big Macro long position right now – long the Long Bond (TLT). 

  • TED SPREAD: as of this morning 37
  • 3-MONTH T-BILL YIELD: as of this morning 0.09%
  • 10-Year: as of this morning 1.60
    • Increase from prior day’s trading at 1.59
  • YIELD CURVE: as of this morning 1.31
    • Up from prior day’s trading at 1.30 

MACRO DATA POINTS (Bloomberg Estimates):

  • 7:45am/8:55am: ICSC/Redbook retail sales
  • 9:45am: ISM New York, June (prior 49.9)
  • 10am: Factory Orders, May, est. 0.1% (prior -0.6%)
  • 11:30am: U.S. to sell 4-week bills
  • 4:30pm: API inventories
  • 5pm: Total Vehicle Sales, June, est. 13.9m (prior 13.73m)
  • 5pm: Domestic Vehicle Sales, June, est. 10.87m (prior 10.75m) 

GOVERNMENT:

    • House, Senate not in session
    • President Obama returns to White House from Camp David
    • IMF issues statement for annual report on U.S. economy, 10am 

WHAT TO WATCH: 

  • Barclays CEO Diamond Quits After Record Libor-Rigging Fine
  • Regulators Grappling With Libor Probe Said to Seek More Time
  • Banks required to submit so-called living wills to FDIC, Federal Reserve by yday, summaries available by today: JPM, BAC, C, GS, MS, BCS, DB, CS, UBS
  • SEC’s Schapiro has deadline of today to respond to House questions on Facebook IPO
  • Microsoft writing down $6.2b after AQuantive deal struggles
  • U.S. June auto sales: June SAAR could match May’s 13.8m pace
  • Fiat to Raise Chrysler Stake to 61.8% in Push Toward Full Merger
  • Ireland Plans Market Return With EU500 Million T-Bill Sale
  • Boeing Sees Jet-Market Growth Slowing as Jumbo Demand Dwindles
  • Slovenia Heads for Sixth Euro Bailout Request to Aid Banks 

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG) 

  • France Beating U.S. in Wheat Exports After Drought: Commodities
  • Europe Burns Coal Fastest Since ’06 Boosting U.S., EON: Energy
  • Gasoline Set for $3 Fuels Obama Election Defense: Energy Markets
  • Commodities Advance to One-Month High on Stimulus Speculation
  • Oil Rises on Global Stimulus Speculation, Iran Supply Concern
  • Copper Reaches Seven-Week High as Central Banks May Add Stimulus
  • Japan May Reduce LNG Spot Purchases in July on Surge in Price
  • U.K. Natural Gas Advances for a Third Day as Dutch Flows Decline
  • Saudi Arabia Set to Cut Extra Light Oil Premium to Heavy Crude
  • Sugar Rises on Speculation Supply Will Be Limited; Cocoa Gains
  • Deutsche Bank Cuts Oil-Price Forecasts on Demand Outlook
  • Silver Futures May Rise 25% on Double Bottom: Technical Analysis
  • New Life for North Sea Oil Hinges on Coal Gas in $8 Billion Bet
  • Tanker Glut Expands as U.S. Drives Billion Fewer Miles: Freight
  • Oil Rebounds on Stimulus Speculation, Iran
  • Gold Climbs on Speculation Central Banks to Seek to Spur Growth
  • Corn Rallies as Heat Wave Hurts Crop Conditions Across Midwest

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CURRENCIES


EURO – this $1.25 line is an important one to keep your eyes on; we’re either going to see another drop to $1.23 or a rip to $1.27 – either should happen in a hurry. We have no idea what the next central planning catalyst is, but clearly bailouts are the new bull case.

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EUROPEAN MARKETS


GERMANY – the DAX and MIB Indexes look like better shorts than Spain’s IBEX right here and now. We aren’t short either, but may be by day’s end as both the DAX and MIB are testing my intermediate-term TREND lines of 6581 and 14,498, respectively. We’d like to see them both fail there before we move.

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ASIAN MARKETS


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MIDDLE EAST


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The Hedgeye Macro Team