THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – July 26, 2012


As we look at today’s set up for the S&P 500, the range is 17 points or -0.51% downside to 1331 and 0.76% upside to 1348. 

                                            

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 07/25 NYSE 226
    • Up versus the prior day’s trading of -1477
  • VOLUME: on 07/25 NYSE 783.50
    • Decrease versus prior day’s trading of -3.08%
  • VIX:  as of 07/25 was at 19.3
    • Decrease versus most recent day’s trading of -5.52%
    • Year-to-date decrease of -17.35%
  • SPX PUT/CALL RATIO: as of 07/25 closed at 1.23
    • Down from the day prior at 2.08

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: as of this morning 35
  • 3-MONTH T-BILL YIELD: as of this morning 0.10%
  • 10-Year: as of this morning 1.42%
    • Increase from prior day’s trading at 1.40%
  • YIELD CURVE: as of this morning 1.20
    • Up from prior day’s trading at 1.18 

MACRO DATA POINTS (Bloomberg Estimates):

  • 8:30 am: Durable Goods Orders, June, est. 0.3% (prior 1.3%)
  • 8:30 am: Initial Jobless Claims, July 21, est. 380k (prior 386k)
  • 8:30 am: Continuing Claims, July 14, est. 3.3m (prior 3.314m)
  • 9:45 am: Bloomberg Consumer Comfort, July 22 (prior -37.9)
  • 10am: Pending Home Sales M/m, June, est. 0.3% (prior 5.9%)
  • 10am: Pending Home Sales Y/y, June, est. 12.1% (prior 15.3%)
  • 10am: Freddie Mac mortgage rates
  • 10:30am: EIA natural gas change
  • 11am: Kansas City Fed Manf. Activity, July, est. 4 (prior 3)
  • 11am: U.S. to purchase $1.5-$2b notes due 2/15/36-5/15/42
  • 1pm: U.S. to sell $29b 7-yr notes

GOVERNMENT:

    • House, Senate in session
    • First Lady Michelle Obama arrives in U.K. in evening, leading presidential Olympics delegation
    • Treasury Secretary Timothy Geithner testifies at a Senate Banking, Housing and Urban Affairs Committee hearing on the Financial Stability Oversight Council Annual Report to Congress and the London interbank offered rate, 10am
    • House Financial Services subcommittee hearing on the 10th anniversary of the Sarbanes-Oxley Act, 9:30am
    • Senate Judiciary Committee holds hearing on the nomination of William Baer to be an assistant attorney general for the Justice Department’s Antitrust Division, 1pm
    • CFTC’s Technology Advisory Committee meets to develop methods for the CFTC, self-regulatory organizations and futures customers to verify the location and status of funds in segregated accounts, 10am
    • House Ways and Means Committee debates, revises legislation on Russia permanent normal trade relations, matching bill approved by a Senate panel
    • State Dept. advisory panel meets on defense trade, 1:30pm
    • Woodrow Wilson Center holds discussion on U.S.-Canadian efforts to enhance economies in agriculture and food, health and consumer products, transportation and the environment

WHAT TO WATCH: 

  • Carlyle, BC Partners agreed to buy United Technologies’s Hamilton Sundstrand industrial unit for $3.46b
  • Rambus lost case against LSI, STMicroelectronics over controllers used in electronics, ITC said
  • Phil Gramm, former senator who helped write 1999 law that enabled creation of financial giants, told Bloomberg News his legislation didn’t make the system any riskier
  • Durable goods orders may climb 0.3%
  • Zynga plunged after cutting yr forecast
  • BTIG analyst apologizes after results, cuts Zynga to neutral
  • Facebook implied volatility plunged 10% on July 24 from record high, falling at the fastest rate ever, trading in options market shows; reports today
  • Large-city foreclosure filings climbed almost 60% in 1H 2012: RealtyTrac
  • J.C. Penney ready to make deep price cuts to most goods: WSJ
  • Alcatel-Lucent to slash 5,000 jobs after slumping to loss
  • International Grains Council monthly crop report (9:30am ET)
  • Apple senior executives Scott Forstall, Phil Schiller among officials the company said will be called to testify at patent trial against Samsung Electronics set to begin July 30
  • Samsung sought court order to prevent Apple from presenting evidence of Samsung’s overall rev., profits and wealth at trial
  • Facebook said to be working with HTC to build its own smartphone for release as soon as mid-2013
  • BlackRock, Fidelity and Vanguard gauging how their clients hurt by Libor manipulation, whether to take legal action as at least a dozen banks being investigated for rate-rigging
  • GenOn Energy, NRG Energy sued by shareholder claiming the $1.7b all-stock deal to acquire GenOn undervalues the co.
  • U.S. Navy underestimating cost of its proposed 30-year shipbuilding program by 19%, Congressional Budget Office said in report yesterday

EARNINGS:

    • Iron Mountain (IRM) 6am, $0.31
    • Patterson-UTI Energy (PTEN) 6am, $0.44
    • Starwood Hotels & Resorts Worldwide (HOT) 6am, $0.62
    • Ball (BLL) 6am, $0.87
    • MetroPCS Communications (PCS) 6am, $0.21
    • Covidien (COV) 6am, $1.06
    • Potash of Saskatchewan (POT CN) 6am, $1.02; Preview
    • Mylan (MYL) 6am, $0.55
    • Ashland (ASH) 6:01am, $1.80
    • PulteGroup (PHM) 6:30am, $0.05; Preview
    • Bunge Ltd (BG) 6:30am, $1.36
    • L-3 Communications Holdings (LLL) 6:30am, $1.88
    • Barrick Gold (ABX CN) 6:55am, $0.93; Preview
    • United Technologies (UTX) 6:59am, $1.42; Preview
    • AmerisourceBergen (ABC) 7am, $0.69; Preview
    • Moody’s (MCO) 7am, $0.71
    • Raytheon Co (RTN) 7am, $1.22
    • Zimmer Holdings (ZMH) 7am, $1.32
    • Boston Scientific (BSX) 7am, $0.11; Preview
    • Sprint Nextel (S) 7am, $(0.41); Preview
    • Hershey (HSY) 7am, $0.61
    • Colgate-Palmolive Co (CL) 7am, $1.33; Preview
    • CME Group (CME) 7am, $0.83
    • Consol Energy (CNX) 7am, $0.32
    • Dow Chemical (DOW) 7am, $0.64
    • National Oilwell Varco (NOV) 7am, $1.40
    • Interpublic Group of (IPG) 7am, $0.21
    • International Paper (IP) 7am, $0.46
    • EQT (EQT) 7am, $0.31
    • Lazard (LAZ) 7am, $0.25
    • Watson Pharmaceuticals (WPI) 7am, $1.38
    • Ventas (VTR) 7:02am, $0.92
    • McGraw-Hill (MHP) 7:10am, $0.76
    • 3M (MMM) 7:30am, $1.65; Preview
    • Celgene (CELG) 7:30am, $1.18
    • Mead Johnson Nutrition Co (MJN) 7:30am, $0.77
    • Invesco Ltd (IVZ) 7:30am, $0.43
    • Imax (IMX CN) 7:30am, $0.21
    • Kimberly-Clark (KMB) 7:30am, $1.28
    • Noble Energy (NBL) 7:30am, $0.93
    • Waste Management (WM) 7:30am, $0.52
    • Occidental Petroleum (OXY) 7:30am, $1.61
    • CMS Energy (CMS) 7:30am, $0.38
    • United Continental (UAL) 7:30am, $1.66
    • NextEra Energy (NEE) 7:31am, $1.16
    • Exxon Mobil (XOM) 8am, $1.95
    • BorgWarner (BWA) 8am, $1.37
    • Dr Pepper Snapple Group (DPS) 8am, $0.82
    • Prologis (PLD) 8am, $0.42
    • Marriott Vacations Worldwide (VAC) 8am
    • Precision Castparts (PCP) 8am, $2.36
    • Vulcan Materials (VMC) 8am, $0.06
    • Cameron International (CAM) 8:10am, $0.72
    • New York Times Co (NYT) 8:30am, $0.13
    • Royal Caribbean (RCL) 8:35am, $0.03
    • Imperial Oil (IMO CN) 9am, C$0.81
    • Goldcorp (G CN) Pre-mkt, $0.42; Preview
    • Maxim Integrated Products (MXIM) 4pm, $0.39
    • Facebook (FB) 4pm, $0.11
    • Federated Investors (FII) 4pm, $0.40
    • Principal Financial Group (PFG) 4pm, $0.74
    • Expedia (EXPE) 4pm, $0.72
    • CBL & Associates (CBL) 4pm, $0.49
    • Amazon.com (AMZN) 4:01pm, $0.03
    • Amgen (AMGN) 4:01pm, $1.55; Preview
    • Chubb (CB) 4:01pm, $1.15
    • Cincinnati Financial (CINF) 4:01pm, $0.11
    • Cerner (CERN) 4:01pm, $0.54
    • Global Payments (GPN) 4:01pm, $0.95
    • Coinstar (CSTR) 4:01pm, $1.16
    • Starbucks (SBUX) 4:03pm, $0.45
    • Leggett & Platt (LEG) 4:05pm, $0.36
    • CA (CA) 4:05pm, $0.60
    • Republic Services (RSG) 4:05pm, $0.49
    • Gilead Sciences (GILD) 4:05pm, $0.95
    • McKesson (MCK) 4:10pm, $1.48
    • KLA-Tencor (KLAC) 4:15pm, $1.32
    • Tellabs (TLAB) Post-Mkt 

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

 

GOLD – Hilsenrath got some Gold and Oil bulls lathered up with some Qe rumoring, but the US Dollar and TREND levels in both Gold/Oil are saying Bernanke disappoints #BailoutBulls again. If all Bernanke does is more twisting of the curve, that only perpetuates one of the biggest risks I see out there right now, Yield Curve compression.

  • Mr. Titanic Mistry Predicts Sinking Palm-Oil Prices: Commodities
  • Crude Oil Advances in New York After ECB Says Euro Will Survive
  • China Said to Tell Edible-Oil Suppliers to Keep Price Stable
  • Gold Climbs in New York as Draghi Comments Give Boost to Euro
  • Soybeans Decline as Rains Set to Relieve Parched U.S. Fields
  • Sugar Falls to One-Week Low on Brazil Area’s Crop; Coffee Rises
  • Copper Rises as ECB’s Draghi Says the Euro Will Be Supported
  • Hong Kong’s Largest Bullion Vault Signals Rising Asia Wealth
  • Cocoa Getting Boost by Year-End as Factories Erode Butter Glut
  • Western Iowa Corn Yields Seen Plunging 30%: Doane Tour Samples
  • Goldcorp Second-Quarter Profit Misses Estimates as Costs Rise
  • Shell May Have to Trim 2012 Arctic Drilling Amid Delays: Energy
  • Vietnam Coffee Exports May Rise to 130,000 Tons This Month
  • North Dakota Spring, Durum Crops Seen Topping Last Year on Rains
  • Farmers May See Gains Amid Drought With U.S.-Backed Insurance
  • Barrick Gold Quarterly Earnings Miss Estimates as Output Falls

THE HEDGEYE DAILY OUTLOOK - four

 

 

CURRENCIES

 

THE HEDGEYE DAILY OUTLOOK - five

 

 

EUROPEAN MARKETS


SPAIN – both the IBEX and MIB indexes are now slicing through their May closing lows; they are both crashing (so is Russia, Brazil, etc), but Spain’s is the nastiest, down -33% since March. How’s that short selling ban going?

 

THE HEDGEYE DAILY OUTLOOK - six

 


ASIAN MARKETS


CHINA – they’re not going to cut rates w/ food/oil prices up here; at least, that’s what the Shanghai Comp thinks, trading down another -0.5% overnight to fresh YTD lows (down -13.7% since May when growth really started slowing faster).

 

THE HEDGEYE DAILY OUTLOOK - seven

 

 

MIDDLE EAST

 

THE HEDGEYE DAILY OUTLOOK - eight

 

 

The Hedgeye Macro Team


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

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Todd Jordan on Las Vegas Sands Earnings

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"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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