THE HEDGEYE DAILY OUTLOOK

07/09/12 07:19AM EDT

TODAY’S S&P 500 SET-UP – July 9, 2012


As we look at today’s set up for the S&P 500, the range is 14 points or -0.64% downside to 1346 and 0.39% upside to 1360. 

                                            

SECTOR AND GLOBAL PERFORMANCE


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EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: on 07/06 NYSE -1048
    • Down versus the prior day’s trading of -371
  • VOLUME: on 07/06 NYSE 596.39
    • Decrease versus prior day’s trading of -12.82%
  • VIX:  as of 07/06 was at 17.10
    • Decrease versus most recent day’s trading of -2.29%
    • Year-to-date decrease of -26.92%
  • SPX PUT/CALL RATIO: as of 07/06 closed at 2.31
    • Up from the day prior at 1.50 

CREDIT/ECONOMIC MARKET LOOK:


10yr – US Treasuries have told you all you need to know about growth throughout another US Equity no-volume rally; at 1.51% this morning, the 10yr bond is immediate-term TRADE overbought (we’re long it). New risk range = 1.51-1.62% for the immediate-term as Treasuries remain in a Bullish Formation on the long end. 

  • TED SPREAD: as of this morning 39
  • 3-MONTH T-BILL YIELD: as of this morning 0.07%
  • 10-Year: as of this morning 1.52%
    • Decrease from prior day’s trading at 1.55%
  • YIELD CURVE: as of this morning 1.26
    • Down from prior day’s trading at 1.28 

MACRO DATA POINTS (Bloomberg Estimates):

  • 11 am: Fed to purchase $1.5-2b coupon securities maturing 2/15/2036-05/15/2042
  • 11:30 am: U.S. to sell $30b 3-mo bills; $27b 6-mo bills
  • 11:55 am: Fed’s Williams speaks in Couer d’Alene, Idaho
  • 3pm: Consumer Credit, May, est. $8.5b (prior $6.5b) 

GOVERNMENT:

    • House, Senate in session 

WHAT TO WATCH: 

  • Euro drops to two-yr low ahead of EU regional finance meeting
  • Alcoa releases earnings after the close
  • Bank of England’s Tucker to testify on Barclays Libor scandal
  • Sony’s ‘Spider-Man’ tops N.A. box office with $65m in sales
  • Boeing set to win GE jet order of 100 narrow-body 737s
  • Farnborough Air Show coverage
  • Monsanto trial against DuPont over Roundup-Ready crops to start
  • Media moguls gather in Sun Valley, Idaho this week
  • China GDP, JPMorgan, Air Show, Hollande: Week Ahead July 9-14 

EARNINGS:

    • Alcoa (AA) 4:03pm, $0.06
    • WD-40 (WDFC), 4pm, $0.82
    • Pricesmart (PSMT) After-mkt, $0.59 

 COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG) 

  • Chavez Buys Enemy U.S.’s Fuel While Lauding Iran: Energy Markets
  • Alcoa Profit Seen Plunging 81% on Aluminum Smelting Surplus
  • JPMorgan Probe Shows FERC Priority on Policing Energy Markets
  • U.S. Corn Growers Farming in Hell as Heat Spreads: Commodities
  • Oil Rebounds From Biggest Drop in Two Weeks as Norway Halt Looms
  • Corn Jumps While Soybeans Rally to 2008 High on U.S. Dry Weather
  • Gold Set to Decline a Fourth Day as Stronger Dollar Cuts Demand
  • Copper Advances 0.6% to $3.4305 a Pound in New York Trading
  • LME Shareholders to Vote on $2.2 Billion Takeover on July 25
  • El Nino May Widen Indian Rain Deficit as U.S. Flood Risk Gains
  • Palm Oil Gains as Concerns Mount Over El Nino, U.S. Heat Wave
  • Total Said to Buy 35,000 Tons of Naphtha From Bharat Petroleum
  • Farms Break Subsidy Reliance With Record Exports: BGOV Barometer
  • World to Dodge El Nino’s Spur to Cost of Food: Chart of the Day
  • Rain Deficit in India Narrows to 25% as Monsoon Gathers Pace
  • Rubber Declines Most in Two Weeks as Demand Concerns Strengthen 

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CURRENCIES

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EUROPEAN MARKETS


SPAIN – stocks and bonds are just a mess; after failing at TREND line resistance last week, the IBEX leads losers this morning, -1.6%, remaining solidly in crash mode at -25% from its YTD high. Central planners cannot change growth slowing; instead, more debt schemes perpetuate it.

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ASIAN MARKETS


CHINA – growth slowing in China is evidently not yet fully priced in; the Shanghai Comp got crushed again last night -2.4% and the Hang Seng was down -1.9% after failing at intermediate-term TREND resistance (20,091). Chinese inflation (CPI) hit a 29mth low in June (that’s good, but it all came pre the +9% rip in Commodities into 1st wk of July).

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MIDDLE EAST


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The Hedgeye Macro Team

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