Hedgeye - 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

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%

CURRENCIES

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%).

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).

MIDDLE EAST

The Hedgeye Macro Team