THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – July 24, 2012


As we look at today’s set up for the S&P 500, the range is 25 points or -1.45% downside to 1331 and 0.41% upside to 1356. 

                                            

SECTOR AND GLOBAL PERFORMANCE


THE HEDGEYE DAILY OUTLOOK - one

 

THE HEDGEYE DAILY OUTLOOK - two

 

THE HEDGEYE DAILY OUTLOOK - three

 

 

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: on 07/23 NYSE -1601
    • Down versus the prior day’s trading of -1007
  • VOLUME: on 07/23 NYSE 742.90
    • Decrease versus prior day’s trading of -25.90%
  • VIX:  as of 07/23 was at 18.62
    • Increase versus most recent day’s trading of 14.44%
    • Year-to-date decrease of -20.43%
  • SPX PUT/CALL RATIO: as of 07/23 closed at 1.23
    • Down from the day prior at 1.99 

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: as of this morning 36
  • 3-MONTH T-BILL YIELD: as of this morning 0.09%
  • 10-Year: as of this morning 1.43%
    • Unchanged from prior day’s trading
  • YIELD CURVE: as of this morning 1.22
    • Unchanged from prior day’s trading

MACRO DATA POINTS (Bloomberg Estimates):

  • 7:45am/8:55am: ICSC/Redbook retail sales
  • 8:45am: Fed’s Bernanke speaks to the Children’s Defense Fund National Conference on early childhood education via prerecorded video
  • 10am: Markit US PMI Preliminary, July, est. 52 (prior 52.9)
  • 10am: Richmond Fed Manuf Index, July, est. -1 (prior -3)
  • 10am: FHFA House Price Index M/m, May, est. 0.4% (prior 0.8%
  • 11am: Fed to purchase $1.5b-$2b notes due 2/15/36-5/15/42
  • 11:30am: U.S. to sell 4-wk, 52-wk bills
  • 1pm: U.S. to sell $35b 2-yr notes
  • 4:30pm: API inventories 

GOVERNMENT:

    • House, Senate in session
    • Senate hearing on consumer impact of broadcast-cable disputes: CBS, TWC
    • Senate Judiciary holds hearing on super PACs, 2:30pm
    • Senate Energy holds hearing on natural gas and transportation, 10am
    • House Energy hears from Chairman Allison Macfarlane, three NRC commissioners at oversight hearing, 10am
    • House Financial Services’ Consumer Credit subcommittee hearing on legislation to create a federal charter for non- depository lenders, 10am
    • House Financial Services Insurance Subcommittee hearing on Dodd-Frank Act’s impact on insurance industry, 2pm
    • Senate Banking Subcommittee on Financial Institutions and Consumer Protection holds hearing “Private Student Loans: Providing Flexibility and Opportunity to Borrowers;” Sallie Mae President Jack Remondi to testify, 2:30pm
    • NHTSA hearing on proposal to mandate anti-rollover technology in heavy-duty trucks, 10am
    • U.S. Chemical Safety Board releases preliminary findings from the investigation into BP’s 2010 Macondo well explosion in the Gulf of Mexico, 9:05am
    • International Swaps and Derivatives Association holds a Dodd-Frank Transaction Reporting Conference to review requirements’ impact on participants in the $648t global swaps market, 8:15am in New York
    • CFA exam level I & II results are e-mailed after 9am 

WHAT TO WATCH: 

  • Germany pushes back after Moody’s lowers rating outlooks
  • Goldman Sachs, Bain Capital and Carlyle urged federal judge to dismiss lawsuit accusing largest investment banks, P/E firms of conspiring to rig bids on leveraged buyouts
  • Treasury Secretary Timothy Geithner said President Obama “absolutely committed” to letting tax cuts for wealthiest Americans expire as scheduled, in interview on “Charlie Rose” show yesterday
  • Apple lost Dusseldorf appeals court bid to ban sales of Samsung Electronics’s Galaxy 10.1N tablet computer
  • Rosneft starts talks with BP on buying stake in Russia venture
  • Compensation consultant to Best Buy’s board quit after company awarded more than 100 managers retention bonuses without tying them to performance
  • China manufacturing gauge shows slowdown may be ebbing
  • Spain’s borrowing costs rise at 3-mo. bill auction
  • Home values posted first Y/y increase since 2007 in 2Q as U.S. property market began to lift off bottom, Zillow said
  • Apple plans to send security manager to Black Hat USA 2012 to discuss iPhone, iPad, making first appearance at one of the hacking world’s largest conferences
  • U.S. Chemical Safety Board releases preliminary results from BP/Macondo investigation 

EARNINGS:

    • Spirit Airlines (SAVE)  5:45am, $0.47
    • RF Micro Devices (RFMD) 4pm, $0.01
    • Whirlpool (WHR) 6am, $1.69
    • Total System Services (TSS) 4pm, $0.32
    • EI du Pont de Nemours (DD) 6am, $1.46
    • FMC Technologies (FTI) 4pm, $0.48
    • Polaris Industries (PII) 6am, $0.91
    • Edwards Lifesciences (EW) 4pm, $0.65
    • Synovus Financial (SNV) 6am, $0.02
    • Buffalo Wild Wings (BWLD) 4pm , $0.68
    • Centene Corp (CNC) 6am, $(0.10)
    • Panera Bread (PNRA) 4pm, $1.43
    • NorthWestern (NWE) 6am, $0.29
    • Hatteras Financial (HTS)  4pm, $0.89
    • Potlatch (PCH) 6:45am, $0.09
    • Robert Half International (RHI) 4pm, $0.35
    • Rogers Communications (RCI/B CN) 6:47am, C$0.86
    • Norfolk Southern (NSC) 4:01pm, $1.53
    • Altria Group (MO) 6:58am, $0.57
    • Nabors Industries (NBR) 4:01pm, $0.37
    • Reynolds American (RAI) 6:58am, $0.76
    • Illumina (ILMN) 4:01pm, $0.37
    • EMC (EMC) 7am, $0.39
    • American Campus Com. (ACC) 4:01pm, $0.49
    • Simon Property Group (SPG) 7am, $1.81
    • Ezcorp (EZPW) 4:01pm, $0.62
    • Biogen Idec (BIIB) 7am, $1.56
    • Questcor Pharmaceuticals(QCOR) 4:02pm, $0.65
    • Lexmark International (LXK) 7am, $0.88
    • Thoratec (THOR)  4:02pm, $0.44
    • Penn National Gaming (PENN) 7am, $0.64
    • TripAdvisor (TRIP) 4:03pm, $0.41
    • Western Union (WU) 7am, $0.43
    • Broadcom (BRCM) 4:05pm, $0.67
    • Ametek (AME) 7am, $0.46
    • Netflix (NFLX) 4:05pm, $0.05
    • Regions Financial (RF) 7am, $0.14
    • Juniper Networks (JNPR) 4:05pm, $0.16
    • Husky Energy (HSE CN) 7am, $0.36
    • Tempur-Pedic International (TPX) 4:05pm, $0.38
    • Under Armour (UA) 7am, $0.05
    • Riverbed Technology (RVBD) 4:05pm, $0.21
    • Pentair (PNR) 7am, $0.80
    • Polycom (PLCM) 4:05pm, $0.20
    • Waters (WAT) 7am, $1.16
    • Aflac (AFL) 4:07pm, $1.61
    • AT&T (T) 7:25am, $0.63
    • Compuware (CPWR) 4:13pm, $0.07
    • Rockwell Collins (COL) 7:30am, $1.15
    • Aaron’s Inc (AAN) 4:15pm, $0.47
    • Domino’s Pizza (DPZ) 7:30am, $0.46
    • CH Robinson Worldwide (CHRW) 4:15pm, $0.71
    • Anixter International Inc (AXE) 7:30am, $1.50
    • International Game Tech. (IGT) 4:15pm, $0.29
    • FirstMerit (FMER) 7:30pm, $0.28
    • Altera Corp (ALTR) 4:15pm, $0.39
    • PrivateBancorp (PVTB) 7:30am, $0.16
    • Cymer (CYMI) 4:25pm, $0.04
    • Lockheed Martin (LMT) 7:30am, $1.91
    • WR Berkley (WRB) 4:29pm, $0.61
    • United Parcel Service (UPS) 7:45am, $1.17
    • Apple (AAPL) 4:30pm, $10.37
    • Ryder System (R) 7:55am, $0.93
    • Unisys (UIS) 4:30pm, $0.51
    • Illinois Tool Works (ITW) 8am, $1.10
    • Trustmark (TRMK) 4:30pm, $0.44
    • Sigma-Aldrich (SIAL) 8am, $0.97
    • Linear Technology (LLTC) 5pm, $0.45
    • Paccar (PCAR) 8am, $0.81
    • Ctrip.com (CTRP) 5pm, $0.20
    • Peabody Energy (BTU) 8am, $0.53
    • Range Resources (RRC) 5pm, $0.06
    • Six Flags Entertainment (SIX) 8am, $0.73
    • Bell Aliant (BA CN) 5pm, $0.43
    • Gentex (GNTX) 8am, $0.29
    • Acadia Realty Trust (AKR) 5pm, $0.24
    • Lennox International (LII) 8am, $0.96
    • Valmont Industries (VMI) 5:30pm , $2.16
    • Liberty Property Trust (LRY) 8am, $0.63
    • Cabot Oil & Gas (COG) 5:31pm, $0.06
    • Wabtec (WAB) 8:05am, $1.23
    • Suncor Energy (SU CN) After-mkt, $0.73
    • Avery Dennison (AVY) 8:30am, $0.54
    • Community Bank System (CBU) Aft-mkt, $0.50
    • Neogen (NEOG) 8:45am, $0.26
    • Newfield Exploration (NFX) Aft-mkt, $0.64
    • Carlisle (CSL) Bef-mkt, $1.28
    • UMB Financial (UMBF) Aft-mkt, $0.69
    • Jarden Corp (JAH) Bef-mkt, $1.10
    • Rock-Tenn (RKT) Aft-mkt, $1.02 

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

 

OIL – bearish TREND; bullish TRADE; we’ll stay short it with a wall of TREND line resistance up at $108.37 Brent. The only thing that can get US and Chinese Growth back on track is a sustainable drop in Brent back below $90. With Qe drug addictions in this market’s whisper, good luck with that. 

  • Europe Heat Wave Wilting Corn Adds to U.S. Drought: Commodities
  • China Ousts U.S. in Canada Oil Market With Bid for Nexen: Energy
  • Investors Plow Cash Into Crops as Gold Jilted: Chart of the Day
  • Crude Trades Near One-Week Low on Worsening European Crisis
  • Copper Seen Rising as China Factory Contraction May Be Slowing
  • Corn, Soybeans Tumble on European Risk, Forecast for Some Rains
  • LNG Goes Extra 9,800 Miles as Europe Spurs Record Rates: Freight
  • Cocoa Climbs on Speculation El Nino Will Cut Output; Sugar Falls
  • U.S. Gas Futures Near Seven-Month High on Warm Weather Forecasts
  • U.K. Natural Gas for Today Advances as Norwegian Imports Decline
  • Illinois Corn, Soy Yields Drop From 2011, Doane Crop Tour Shows
  • South Korea Buys 6,000 Tons of High-Grade Aluminum in Tenders
  • Cocoa Usage Seen Falling as Processors Erode World Butter Glut
  • Copper Gain Seen as New-Home Sales Spur Demand: Chart of the Day
  • Gold Set to Decline in London as Europe Concern Bolsters Dollar
  • Morgan Stanley Increases 2012 U.S. Gas Price Forecast by 14% 

THE HEDGEYE DAILY OUTLOOK - four

 

 

CURRENCIES

 

THE HEDGEYE DAILY OUTLOOK - five

 

 

EUROPEAN MARKETS


GERMANY – for once we actually agree with a Moody’s move on the margin; Germany’s #GrowthSlowing slope has accelerated on the downside in the last 6 weeks, and that matters. This morning’s PMI print of 43.3 for July in Germany is an absolute bomb (45.0 in June) – German GDP growth could easily go negative y/y in Q3 (consensus has it up +0.5%).

 

THE HEDGEYE DAILY OUTLOOK - six

 

 

ASIAN MARKETS


HANG SENG – nasty 2-day 4% drop in a major leading indicator in our model that certainly trumps whatever flash there was in the made-up HSBC PMI print of 49.5; Hang Seng, like KOSPI, is now back into a Bearish Formation (both of these indexes have led the SP500 and German DAX since March, so watch them both closely – Asian Growth is Too Big to Bail).

 

THE HEDGEYE DAILY OUTLOOK - seven

 

 

MIDDLE EAST

 

THE HEDGEYE DAILY OUTLOOK - eight

 

 

 

The Hedgeye Macro Team

 


Did the US Economy Just “Collapse”? "Worst Personal Spending Since 2009"?

This is a brief note written by Hedgeye U.S. Macro analyst Christian Drake on 4/28 dispelling media reporting that “US GDP collapses to 0.7%, the lowest number in three years with the worst personal spending since 2009.”

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7 Tweets Summing Up What You Need to Know About Today's GDP Report

"There's a tremendous opportunity to educate people in our profession on how GDP is stated and projected," Hedgeye CEO Keith McCullough wrote today. Here's everything you need to know about today's GDP report.

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Cartoon of the Day: Crash Test Bear

In the past six months, U.S. stock indices are up between +12% and +18%.

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GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist

“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.

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Exact Sciences Up +24% This Week... What's Next? | $EXAS

We remain long Exact Sciences in the Hedgeye Healthcare Position Monitor.

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Inside the Atlanta Fed's Flawed GDP Tracker

"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.

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Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

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People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

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UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

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Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

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Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

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An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

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