THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – July 5, 2012

As we look at today’s set up for the S&P 500, the range is 15 points or -0.66% downside to 1365 and 0.44% upside to 1380.

SECTOR AND GLOBAL PERFORMANCE

 

 

 

EQUITY SENTIMENT:

• ADVANCE/DECLINE LINE: on 7/3 NYSE: +1773
  • Versus prior  trading day +1255
• VOLUME: on 7/3 NYSE 466.46
  • Versus prior trading day 736.11
• VIX:  on 7/5 closed at 16.66
  • Change versus most recent trading -0.8%
  • Year-to-date change of -28.8%
• SPX PUT/CALL RATIO: as of 7/3 closed at 1.40
  • Versus prior trading day 1.68                     

 

CREDIT/ECONOMIC MARKET LOOK:

TREASURIES – if you asked the bond market for US Growth’s slope for the last 5 yrs, she’d have given you all you need to know over the intermediate-term TREND. Breaking down to 1.59% this morning, the 10yr is already down -5bps this wk and the Yield Spread (10s minus 2s) is hitting a new low of +129bps wide. Very bearish for the financials (and US growth assumptions).

 

• TED SPREAD: as of this morning: 37.85
• 3-MONTH T-BILL YIELD: as of this morning 0.08%
• 10-Year yield: as of this morning 1.62
  • Versus prior trading day 1.63
• YIELD CURVE: as of this morning 1.33
  • Versus prior trading day 1.33

 

MACRO DATA POINTS

• 7am: MBA Mortgage Applications, June 29 (prior -7.1%)
• 7am: Bank of England announces interest rates
• 7:30am: Challenger Job Cuts Y/y, June (prior 66.7%)
• 7:45am: ECB announces interest rates
• 8am: RBC Consumer Outlook Index, July (prior 46.1)
• 8:15am: ADP Employment Change, June, est. 100k (prior 133k)
• 8:30am: Initial Jobless Claims, June 30, est. 385k (prior 386k)
• 9:45am: Bloomberg Consumer Comfort, July 1 (prior -36.1)
• 10am: ISM Non-Manf. Composite, June, est. 53 (prior 53.7)
• 10am: Freddie Mac mortgage rates
• 11am: Fed to purchase $4.5b-$5.5b notes in 8/15/2020 to 5/15/2022 range
• 11am: U.S. Treasury to announce 3-, 10-, 30-yr auction sizes
• 11am: DoE Inventories
• TBA: ICSC Chain Store Sales Y/y, June (prior 1.7%)

 

GOVERNMENT

• President Obama begins 2-day bus trip through Penn., Ohio
• House, Senate in recess

 

WHAT TO WATCH

• Volkswagen to buy remaining stake in Porsche for $5.6b
• Retailers issue monthly sales reports
• Bank of England, European Central Bank announce rates
• Euro fell yday as German svcs dropped bef. ECB; copper slid
• Canada Competition Bureau approves Maple’s TMX purchase
• Japan regulator OKs merger of nation’s 2 biggest bourses
• Exxon Mobil said to explore sale of German Esso gas stations
• ‘Spider-Man’ generated $35m in ticket sales in opening day
• Service Industries in U.S. Probably Expanded at Slower Pace
• China Seen Entering Deflation, Credit Suisse Says
• France Sells EU7.8b at Bond Auction, Yields Rise

 

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

• Milk Rallying as New Zealand-to-U.S. Weather Sours: Commodities
• Copper Gains as Chinese, European Central Banks Reduce Rates
• Brent Oil Rallies to 1-Month High as Statoil Set to Halt Output
• Paris Wheat Jumps as Dry Weather Cuts Supply From U.S. to Russia
• Food Prices Seen Climbing This Month by FAO After June Decline
• Biggest Wheat Sale From India Since 2004 Seen Halting Rally
• Gold Futures Drop in New York After ECB Cuts Interest Rates
• Putin Gains From Iran Pain as Russian Oil Surges: Energy Markets
• Baltic Exchange Seeks to Double Asian Membership as Trade Shifts
• Japan Reduces Spot LNG Purchases as Prices Soar to Near a Record
• Palm Oil Climbs as Much as 0.9% to a One-Month High
• Ukraine Lowers Corn Crop Forecast 8% as Fields Scorched by Heat
• Commodities Seen Advancing as Much as 10%: Technical Analysis
• Oil Drops in New York on Europe, U.S. Data
• Repsol Junk Prospect Risks Alaska to Angola Expansion: Energy
• Ghana Expects to Invest $20 Billion in Oil With Tullow, Anadarko
• Rubber Declines From Five-Week High as Oil’s Drop Reduces Appea

CURRENCIES

 

 

EUROPEAN MARKETS

SPAIN – the IBEX rallied from its crashing lows to -20% here from its YTD high; failing here would be a very bearish signal; the intermediate-term TREND line for the IBEX = 7141, so watch that and Germany’s (6567 DAX) closely today/tomorrow.

 

 

 

ASIAN MARKETS

CHINA – Shanghai Comp down another -1.2% overnight, so it looks like American and European central planners are going to need a bigger bailout. Don’t forget China’s GDP slowdown report for July is on the 17^th. By that time Global Growth and company earnings slowing will be what drives this market’s decision (volume should be real then too)

 

 

 

MIDDLE EAST (HEADLINES FROM BLOOMBERG)

• Dubai’s Stocks Complete Biggest Weekly Gain Since March on Emaar
• GCC Bank Yields Drop as Capital Can Withstand Risks: Arab Credit
• REITs at Records on Payouts Set to Beat Stocks: Islamic Finance
• Dubai Duty Free Gets $1.75 Billion in 6-Year Syndicated Loan
• Qatar National Bank Is Set for Highest Close Since May on Profit
• Emaar Posts Biggest Weekly Gain in Five Months: Dubai Mover
• Qatar Said to Start Investor Meetings July 9 for Sukuk Sale
• Iran Oil Tankers Signal China in Sign Storage May Be Concluding
• No Apology Needed as Contraction Boosts Bonds: Turkey Credit
• Egypt Pound Set for First Weekly Gain in Five; Dollar Bonds Gain
• Brent Oil Exceeding $100 a Barrel ‘Sustainable,’ Mirae Says
• Wall Street Bank Investors in Dark on Liability of Libor Probes

The Hedgeye Macro Team