Hedgeye - THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – July 31, 2012

As we look at today’s set up for the S&P 500, the range is 35 points or -1.61% downside to 1363 and 0.92% upside to 1398.

SECTOR AND GLOBAL PERFORMANCE

EQUITY SENTIMENT:

ADVANCE/DECLINE LINE: on 07/30 NYSE -88
- Down versus the prior day’s trading of 2012
VOLUME: on 07/30 NYSE 658.58
- Decrease versus prior day’s trading of -27.85%
VIX: as of 07/30 was at 18.03
- Increase versus most recent day’s trading of 7.96%
- Year-to-date decrease of -22.95%
SPX PUT/CALL RATIO: as of 07/30 closed at 1.00
- Down from the day prior at 1.26

CREDIT/ECONOMIC MARKET LOOK:

10yr – both the US and German 10yr fall right back after testing immediate-term TRADE resistance (yields); immediate-term TRADE resistance for the UST 10yr = 1.59%, so we bought back our long-bond TLT position on that yesterday, taking our Fixed Income asset allocation back up to 21%; the bond market has been nailing #GrowthSlowing since March.

TED SPREAD: as of this morning 34
3-MONTH T-BILL YIELD: as of this morning 0.11%
10-Year: as of this morning 1.49%

Decrease from prior day’s trading at 1.50%

YIELD CURVE: as of this morning 1.27

Down from prior day’s trading at 1.28

MACRO DATA POINTS (Bloomberg Estimates):

7:45am/8:55am: ICSC/Redbook retail sales
8:30am: Annual Revisions: Personal Income and Spending
8:30am: Employment Cost Index, 2Q, est. 0.5% (prior 0.4%)
8:30am: Personal Income, June, est. 0.4% (prior 0.2%)
8:30am: Personal Spending, June, est. 0.1% (prior 0.0%)
8:30am: PCE Deflator M/m, June, est. 0.0% (prior -0.2%)
8:30am: PCE Core M/m, June, est. 0.2% (prior 0.1%)
9am: S&P/CS 20 City M/m, May, est. 0.4% (prior 0.7%)
9am: S&P/CaseShiller Home Price Index, May, est. 137.55 (prior 135.8)
9:45am: Chicago Purchasing Manager, July, est. 52.4 (prior 52.9)
10am: Consumer Confidence, July, est. 61.5 (prior 62)
11am: Fed to purchase $4.25b-$5b notes due July 31, 2018-May 15, 2020
11:30am: U.S. to sell 4-wk bills
2pm: Fed will release tentative outright Treasury operation schedule
4:30pm: API Inventories

GOVERNMENT/POLITICS:

House Energy and Commerce subcommittee holds forum to discuss state and federal cooperation on the Clean Air Act, 2pm
House Oversight Committee hearing on federal privacy and data security, 10am
Senate Committee on Commerce, Science Transportation markup to extend 2006 law to stop spam, spyware, fraud across borders; nomination of Michael Huerta, to be FAA admin., 2:30am
Treasury Secretary Timothy F. Geithner speaks to the Los Angeles World Affairs Council on U.S, and world economies, 3pm
David Cohen, Treasury’s undersecretary for terrorism and financial intelligence, speaks at department’s public hearing on plans to propose rules on customer due diligence requirements for financial institutions, 9:30am
Senate Appropriations defense subcommittee drafts its version of the annual defense spending bill, 10:30am
Air Force holds press briefing at Pentagon on latest assessment of oxygen-deficiency symptoms that have affected pilots flying Lockheed Martin’s F-22 Raptor, 3pm
FERC Chairman Jon Wellinghoff discusses reliability of electric grid, EPA regulations, climate change in appearance at Platts Energy Podium, 1pm
ITC hears evidence in a microprocessors patent-infringement case brought against Apple by Taiwan-based VIA Technologies, which is affiliated with HTC, 9am

WHAT TO WATCH:

Federal Open Markets Committee begins 2-day meeting
Euro-area unemployment rate reaches record 11.2%
Apple said to prepare iPhone redesign for Sept. 12 release
Yahoo Interim CEO Ross Levinsohn departs after Marissa Mayer gets CEO job
BP 2Q net loss $1.39b vs net income $5.72b Y/y
Cantor placed on review for cut by Moody’s amid trading weakness
Japan’s unexpected drop in unemployment helps sustain growth
UBS, Deutsche Bank profits decline, missing ests.
Panasonic 1Q net income 12.8b yen, analyst est. 9.2b yen
Honda 1Q net 131.7b yen, est. 150.7b yen
Manchester United seeks as much as $333m in U.S. IPO
Sanofi’s Genzyme unit sued by Teva over worker-raiding claims
RealD fell as much as 21% after missing ests. due to costs to supply theaters with new eyeglasses
Humana cuts profit forecast as rising Medicare costs surprise
Lehman raises $4.7b in 2Q toward creditor payments
Boeing 787’s debris-spewing GE engine to be dismantled in probe
Ex-UBS Officers “lied and cheated’ on muni bond deals, U.S. says

EARNINGS:

Yandex (YNDX) 6am, $0.16
Tyco (TYC) 6am, $0.93; Preview
Aetna (AET) 6am, $1.25
NiSource (NI) 6:30am, $0.20
Harris (HRS) 6:30am, $1.41
Goodyear Tire & Rubber (GT) 6:30am, $0.45
Cobalt International Energy (CIE) 6:40am, $(0.09)
Foster Wheeler (FWLT) 6:45am, $0.43
Delphi Automotive (DLPH) 7am, $0.92
Thomson Reuters (TRI CN) 7am, $0.50
Pfizer (PFE) 7am, $0.54; Preview
Dentsply International (XRAY) 7am, $0.56
Coach (COH) 7am, $0.85
TRW Automotive Holdings (TRW) 7am, $1.55
Archer-Daniels-Midland Co (ADM) 7am, $0.58
Entergy (ETR) 7am, $1.41
Discovery Communications (DISCA) 7am, $0.70
United States Steel (X) 7:05am, $0.49
Marathon Petroleum (MPC) 7:06am, $2.51; Preview
Public Service Enterprise Group (PEG) 7:30am, $0.45
Revlon (REV) 7:30am, $0.32
Cummins (CMI) 7:30am, $2.28
Valero Energy (VLO) 7:30am, $1.43; Preview
HCP (HCP) 7:45am, $0.68
Louisiana-Pacific (LPX) 8am, $0.05
George Weston (WN CN) 8am, C$0.96
Martin Marietta Materials (MLM) 8:05am, $1.01
Ecolab (ECL) 8:25am, $0.72
TransAlta (TA CN) 8:50am, C$(0.03)
Toromont Industries (TIH CN) 11:13am, C$0.36
Saputo (SAP CN) 11:58am, C$0.66
Edison International (EIX) 4pm, $0.32
WebMd (WBMD) 4pm, $0.123
Electronic Arts (EA) 4:01pm, $(0.42)
DreamWorks Animation SKG (DWA) 4:01pm, $0.25
Solar Capital (SLRC) 4:01pm, $0.58
Axis Capital Holdings (AXS) 4:01pm, $0.93
Life Technologies (LIFE) 4:01pm, $0.97
BMC Software (BMC) 4:05pm, $0.75
Take-Two Interactive (TTWO) 4:05pm, $(0.66)
ONEOK (OKE) 4:05pm, $0.33
ONEOK Partners (OKS) 4:05pm, $0.70
Allstate (ALL) 4:05pm, $0.52
QEP Resources (QEP) 4:05pm, $0.33
Genworth Financial (GNW) 4:07pm, $0.18
Arthur J Gallagher (AJG) 4:09pm, $0.56
Kimco Realty (KIM) 4:09pm, $0.31
Verisk Analytics (VRSK) 4:10pm, $0.47
Frontier Communications (FTR) 4:11pm, $0.05
RenaissanceRe Holdings (RNR) 4:22pm, $2.48
FMC (FMC) 4:30pm, $0.91
Jones Lang LaSalle (JLL) 4:30pm, $1.24
BRE Properties (BRE) 4:30pm, $0.58
DDR (DDR) 5pm, $0.25

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

GOLD – the #BailoutBulls are going for gold here into this week’s central planning events; TRADE resistance now support at $1606; long term-TAIL risk line up at $1679. Be careful what you beg for; another Qe will cut whatever is left of the US consumption growth phalanx to shreds.

Most-Accurate Gold Forecasters Splitting After Rout: Commodities
Oil Supplies Decline in Survey on Refining High: Energy Markets
Grain Cargoes Seen Slowing Most in 19 Years on Drought: Freight
Corn Climbs to Record as Futures Head for Best Month Since 1988
Weak India Rains to Spur Record Cooking-Oil, Lentil Imports
Rubber Demand in China to Contract 5% as Truck Sales Tumble
Palm-Oil Shipments From Indonesia Set to Gain on Lower Duty
WTI Crude May Slump to $83 Fibonacci Level: Technical Analysis
Copper Rises as China Increases Spending on Railroad Network
Gold Seen Extending Monthly Gain on Monetary Easing Stimulus
Australia Wins as Buyers Shift to Wheat From Corn on Drought
Rice Stockpiles in Japan Seen Declining, Boosting Prices
Iron Ore Price Decline in China Seen by Arctic as Import Spur
Gold-Backed Loans to Climb at Indonesian Banks: Islamic Finance
Chinese Steelmakers Profit Tumbles 96% on Lower Demand, Prices
Oil Rises, Set for First Monthly Gain in Three on Stimulus Talk

CURRENCIES

EUROPEAN MARKETS

ASIAN MARKETS

CHINA – last day of the month, so why not throw some Chinese rumoring on top of the markup pile? Regardless, Chinese stocks make fresh new lows, down another -0.3% (down -14.5% since May); we do not think they cut rates w/ $106/barrel Brent Oil.

MIDDLE EAST

The Hedgeye Macro Team