prev

No “Whatever”, No Bazooka at August ECB Presser!

Positions in Europe: Long German Bunds (BUNL)

 

As we’ve noted in recent research notes, Draghi primed the market for great expectations leading into today’s ECB decision with his statement last Thursday (7/26) that “within our mandate, the ECB is ready to do whatever it takes to preserve the euro,” adding , “believe me, it will be enough.”

 

Well, Draghi certainly under-delivered today and the market is selling off hard since the ECB’s 8:30am EST conference call.  And we aren’t surprised. As recently as 7/27 in response to Draghi’s “whatever” comment we wrote:

 

“The issue here, though, is that Draghi hints at possessing some bazooka that he’s been concealing for all this time.  We frankly don’t think there is one, particularly because we can’t envision what one grand bazooka would look like. “

 

In today’s conference call Draghi left rates unchanged (main refinancing operations at 0.75%, marginal lending facility at 1.50% and deposit facility at 0.00%) and signaled no further plans of a LTRO.  Unlike previous calls, he directly addressed yields across the periphery, saying:

 

“Exceptionally high risk premia are observed in government bond prices in several countries and financial fragmentation hinders the effective working of monetary policy. Risk premia that are related to fears of the reversibility of the euro are unacceptable, and they need to be addressed in a fundamental manner. The euro is irreversible.”

 

To address these rising yields (Spain and Italy, without being named) Draghi announced that the ECB “may undertake” non-standard  measures, hinting at a reactivation of the SMP to namely buy bonds on the secondary market and areengagement of the EFSF to buy bonds on the primary market, with focus on the short end of the yield curve. No target size of buying was mentioned beyond “size adequate to reach its objective”.

 

Questions about the seniority of these bond purchases were not addressed by Draghi. He deflected them saying that the details will be worked out in the coming months.

 

Also note that Germany and the Bundesbank under Jens Weidmann remain firmly against ECB bond buying. This rub will continue to contribute to European market volatility.

 

What this spells is further artificial hand holding in the Italian and Spanish bond markets. Ultimately, the ECB must buy time until 1.) the 12th of September when the German Constitutional court votes on the constitutionality of the ESM and fiscal compact and 2.) more clarity on a banking license for the ESM, assuming that the Germans sign off on it. And remember, numerous Eurocrats are on vacation in August.

 

You can find Mario Draghi’s full Introductory Statements to the press conference here.  

 

No “Whatever”, No Bazooka at August ECB Presser! - 1111. eur

 

Matthew Hedrick

Senior Analyst


JOBLESS CLAIMS TREND WEAKENING ON A YOY BASIS

Rolling NSA Claims Continue to Reveal Signs of Weakness

Last week initial jobless claims rose 12k WoW to 365k (rising 8k after the 4k upward revision to the prior week's data). Rolling claims fell 2.75k to 365.5k and non-seasonally adjusted claims fell roughly 30k to 310k.

 

We like to cut through all the noise by looking at the NSA series on a YoY basis. Currently claims are improving at ~5.7% YoY. This rate is down from 6.5% in the prior week and 11.9% at the beginning of this year. While claims are still improving, they are improving at a slower rate. This suggest to us that the fundamentals are weakening in the employment environment. We expect the seasonal adjustment distortions to remain a headwind to claims throughout the month of August. Thereafter, we would expect the seasonality distortion to become less of a headwind, eventually becoming a tailwind that peaks in Feburary/March of 2013. 

 

JOBLESS CLAIMS TREND WEAKENING ON A YOY BASIS - Raw

 

JOBLESS CLAIMS TREND WEAKENING ON A YOY BASIS - Rolling

 

JOBLESS CLAIMS TREND WEAKENING ON A YOY BASIS - NSA

 

JOBLESS CLAIMS TREND WEAKENING ON A YOY BASIS - NSA rolling

 

JOBLESS CLAIMS TREND WEAKENING ON A YOY BASIS - S P

 

JOBLESS CLAIMS TREND WEAKENING ON A YOY BASIS - Fed

 

JOBLESS CLAIMS TREND WEAKENING ON A YOY BASIS - NSA YoY

 

The 2-10 Spread

The 2-10 spread widened 10 bps WoW to 129 bps. The ten-year treasury yield rose 13 bps to 153 bps.

 

JOBLESS CLAIMS TREND WEAKENING ON A YOY BASIS - 2 10

 

JOBLESS CLAIMS TREND WEAKENING ON A YOY BASIS - 2 10 QoQ

 

Financial Subsector Performance

The table below shows the stock performance of each Financial subsector over four durations. 

 

JOBLESS CLAIMS TREND WEAKENING ON A YOY BASIS - Subsector performance

 

JOBLESS CLAIMS TREND WEAKENING ON A YOY BASIS - Companies

 

Joshua Steiner, CFA

 

Robert Belsky

 

Having trouble viewing the charts in this email?  Please click the link at the bottom of the note to view in your browser.  


No Reaction

NO REACTION

 

 

CLIENT TALKING POINTS

 

MARIO’S TURN

So the Fed basically extended low rates until 2014 yesterday and the market didn’t think much of it. Perhaps they were dealing with the market making debacle over at Knight Capital OR perhaps they were waiting for the real catalyst, which is Mario Draghi amd the ECB. It really matters what happens today at his meeting because if you’ll recall, Draghi is ready to do “whatever” it takes. Too bad they didn't cut rates and said they "may" do open market operations. That doesn't inspired confidence; European stocks hopped into  a freefall afterward.

 

 

NOT AGAIN

The Keynesian central planners love to get their tightie whities in a bunch. Perhaps they are finally wising up to the fact that they are the ones perpetuating slowing growth and have gotten exactly where we didn’t want to be. They are realizing that the family on welfare is not so keen on high fuel prices and higher food prices, despite the government assistance. It’s like one of those movies about the Civil War where someone gets shot: we’re going to have to bite down hard and pull through the pain before we’re back to normal.

 

 

GEITHNER THE GREAT

China’s stock market has basically been going down since April. It tried to go up yesterday but people decided they didn’t really like that. They’re down -14% since May, which doesn’t exactly inspire confidence. The country might have

 

 

_______________________________________________________

 

ASSET ALLOCATION

 

 Cash:                  Flat                        U.S. Equities:    DOWN

 

 Int'l Equities:   Flat                        Commodities:    Flat

                                  

 Fixed Income:  UP                         Int'l Currencies: Flat

 

 

 

_______________________________________________________

 

TOP LONG IDEAS

 

JACK IN THE BOX (JACK)

This company is transitioning from cash burn to $75mm annual free cash flow generation thanks to completion of a reimaging program and refranchising of JIB units. Qdoba is the leverage; a maturing and growing store base will bring higher margins. We see 8.5% upside over the next 6-9 months.

  • TRADE:  LONG
  • TREND:  LONG
  • TAIL:      LONG            

 

FIFTH & PACIFIC COMPANIES (FNP)

The former Liz Claiborne (LIZ) is on the path to prosperity. There’s a fantastic growth story with FNP. The Kate Spade brand is growing at an almost unprecedented clip. Save for Juicy Couture, the company has brands performing strongly throughout its entire portfolio. We’re bullish on FNP for all three durations: TRADE, TREND and TAIL.

  • TRADE:  LONG
  • TREND:  LONG
  • TAIL:      LONG

 

LIFEPOINT HOSPITALS (LPNT)

We continue to expect outpatient utilization to pick up in 2H12 alongside stabilization in acuity with ortho and cardiac/ICD volumes supporting both pricing and inpatient admissions growth. Births should serve as a tailwind into year-end, recent and prospective acquisitions offer some upside to 2012/13 numbers and the in place repo offers some earnings flexibility. With European and Asian growth slowing, we like targeted domestic revenue exposure as well.

  • TRADE:  NEUTRAL
  • TREND:  LONG
  • TAIL:      LONG

  

_______________________________________________________

 

THREE FOR THE ROAD

 

TWEET OF THE DAY

“KCG owns substantial minority stake in Direct Edge, which has been exploring capital-market opportunities for some time...” -@JustinRBLT

 

 

QUOTE OF THE DAY

“An economist is a man who states the obvious in terms of the incomprehensible.” – Alfred A. Knopf

 

 

STAT OF THE DAY

$440 million. The loss Knight Capital (KCG) will take from yesterday’s market structure breakdown.

 


Early Look

daily macro intelligence

Relied upon by big institutional and individual investors across the world, this granular morning newsletter distills the latest and most vital market developments and insures that you are always in the know.

GIL: Early Read

 

Conclusion: An uncharacteristically mundane quarter for GIL. A penny below consensus yet a penny above GIL’s guidance and the business appears to be in decent shape. The callout is the fact that for the second consecutive quarter GIL is increasing the opacity of its underlying business. Volatility is headed higher in this name. But despite increased opacity, the reality is that the acquisitions and less competition from HBI will give GIL more tailwinds than headwinds in the coming quarters.


The company timed up its new acquisition (Anvil) beautifully last quarter just as Gold Toe is rolling off. This quarter we have GIL announcing that it will no longer report data for the CREST report – just as pricing in the industry is hitting an inflection point. With cotton prices remaining low, manufacturers will be forced to lower pricing now that cotton costs have eased. Some will inevitably hold out longer than others creating price dislocation over coming quarters. The good news is that industry demand is up +4.3% offsetting lower prices this quarter, and Hanesbrands has ceded over $100mm in sales in this space (wide open for GIL). But volatility in this name will be headed higher with the intra-quarter read no longer available.


With 71.3% share in the U.S. Distributor market coming in above the 70% the company expected there’s limited upside for further share gains in this market. As such, this move probably makes sense, but the timing makes it even more difficult given that the company has been layering on acquisitions just at the time when we’d otherwise be looking at the real underlying organic growth. Gold Toe and Anvil accounted for 2-3pts and 5-6pts of growth in Q3, with core growth standing at a more modest modest 4%-5%. In terms of driving sales, the pricing dynamic is arguably at its most critical point over the last few years.

 

To GIL’s credit, despite slightly lighter than expected gross margins down -437bps vs -331bpsE, the sales/inventory spread in the quarter improved 12pts to +7%. This comes after five consecutive quarters of a negative spread which is bullish for gross margins at the same time product costs are swinging to a tailwind.


As for the FY outlook, no change to top or bottom-line expectations of note implying status quo for Q4.

 

Despite the opacity, the reality is that the acquisitions and less competition from HBI will give GIL more tailwinds than headwinds in the coming quarters.

 

GIL: Early Read - GIL

 

 

 

 

 


Bringing the Heat

This note was originally published at 8am on July 19, 2012. INVESTOR and RISK MANAGER SUBSCRIBERS have access to the EARLY LOOK (published by 8am every trading day) and PORTFOLIO IDEAS in real-time.

“Midway upon the journey of our life,
I found myself within a forest dark,
For the straight foreward pathway had been lost."

-Dante Aligihieri, “The Inferno”

 

Keith is out in California this week meeting with some of our subscribers, so instead of getting up at 2am Eastern time he handed me the baton on the Early Look this morning.  As I was riding the train into New York last night, an article in The New Yorker prompted the theme for this note: heat. (By the way, yes I know hockey players from Alberta aren’t supposed to read The New Yorker, but just indulge me this once.)

 

Whether you are a believer in global warming, or not, this has been one heck of a hot summer.  The temperature hasn’t necessarily created an inferno, like in Dante’s namesake poem, but, yes, it has been quite hot.  In fact, for the month of June the average temperature in the United States was 71.2 degrees Fahrenheit.  This is two degrees higher than the average for the 20th century.  In aggregate, the average June temperature made the last 12 months the hottest year since record keeping began in 1895.

 

Not surprising, especially for those amateur psychologists amongst us, the upshot of the heat wave is that according to a University of Texas poll more than 70% of Americans now believe in climate change.  This is up from 52% in the winter of 2011 when we had record snows.  If you didn’t know whether the average person reacts to their most proximate stimuli, now you know.

 

The downside to Mother Nature bringing the proverbial heat is that much of the more agriculturally oriented parts of this country are experiencing droughts.  According to the National Atmospheric and Oceanic Administration, the country is under the most severe drought since 1955.  Currently, 55% of the contiguous United States is in a moderate-to-severe drought. 

 

So, inferno? Indeed.

 

The upshot of a drought is that it provides a bullish backdrop for commodity prices.  Former Hedgeye intern Brennan Turner recently retired from professional hockey and now operates a brokerage business for farmers in Western Canada.  As part of his business he writes a morning note to farmers.  In his note from a couple of days ago, he commented that for Canadian farms, because of the drought in the United States, this year could be like three years in one for both yields and revenues.  As they say, there is always a bull market somewhere. 

 

The more pressing question for most of us, though, is whether the bull market that has been occurring in U.S. equities over the last week plus is sustainable.  Our view, not to mince words, is no.  In fact, yesterday between meetings Keith ducked into a Starbucks and shorted the SP500 in the Virtual Portfolio. So, we are official time stamped on our bearish view.

 

The first thing that concerns us is volatility.  As is highlighted in the Chart of the Day, every time that volatility has approached the 15-ish level on the VIX over the past three years, the market has put in an intermediate term top.  Volatility is a great proxy for investor sentiment and currently the VIX is at 16.2.  Complacency, just like heat, is officially here my friends.

 

The second factor that we are concerned about is earnings.  Wall Street analysts are quite good at engineering earnings “beats”.  This quarter is clearly no exception since as of yesterday 73% of companies in the SP500 had “beat” earnings for the quarter.   Even if the market is excited by this, those of us who are quantitative in nature should not be surprised.

 

Coming in the Q2 2012 top down earnings estimates for the SP500 were projecting a -2.1% year-over-year decline in earnings.  How’s that for the soft bigotry of low expectations?  So sure, companies are beating very low expectations, but more concerning for the equity market is future earnings estimates.  Currently, earnings growth for Q1 and Q2 of 2013 is expected to be 14%.  Yah, I don’t think so.  Both a lack of real earnings growth and declining future earnings are not a positive catalyst for equities.

 

Finally, one of our last major worries is Europe.  Just as the Eurocrats finally go on their lengthy summer vacations, the European sovereign debt markets have again taken a turn for the worse.  Overnight, the Spaniards held an auction for 2-5-7 year bonds and bond buyers didn’t exactly bringing the buying heat.  To be precise, bid-to-cover was an abysmal 1.9x versus 4.3x just over a month earlier on June 7th.   Meanwhile the yield on the Spanish 10-year bond is once again back above the 7% handle.

 

Not to put wood on my bearish inferno this morning, but for those of you who are interested in stock specific ideas our Restaurant research team, led by Howard Penney, is hosting a conference call on Darden Restaurants this morning.  I won’t give away their punch line, but the title of the call is: “Is Darden Too Big Too Perform?” I think you get the drift.  If you are institutional investor and interested in listening in, ping sales@hedgeye.com.

 

Our immediate-term support and resistance risk ranges for Gold, Oil (Brent), US Dollar, EUR/USD, Germany’s DAX, and the SP500 are now $1566-1594, $101.29-106.98, $82.88-83.93, $1.21-1.23, 6499-6752, and 1354-1375, respectively.

 

Good luck out there today,

 

Daryl G. Jones

Director of Research

 

Bringing the Heat - Chart of the Day

 

Bringing the Heat - Virtual Portfolio


THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – August 2, 2012


As we look at today’s set up for the S&P 500, the range is 23 points or -0.88% downside to 1363 and 0.79% upside to 1386. 

                                            

SECTOR AND GLOBAL PERFORMANCE


THE HEDGEYE DAILY OUTLOOK - 1

 

THE HEDGEYE DAILY OUTLOOK - 2

 

THE HEDGEYE DAILY OUTLOOK - 3

 

 

EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: on 08/01 NYSE -779
    • Down  versus the prior day’s trading of -528
  • VOLUME: on 08/01 NYSE 1025.21
    • Increase versus prior day’s trading of 15.46%
  • VIX:  as of 08/01 was at 18.96
    • Increase versus most recent day’s trading of 0.16%
    • Year-to-date decrease of -18.97%
  • SPX PUT/CALL RATIO: as of 08/01 closed at 1.26
    • Up from the day prior at 0.97

CREDIT/ECONOMIC MARKET LOOK: 

  • TED SPREAD: as of this morning 35
  • 3-MONTH T-BILL YIELD: as of this morning 0.09%
  • 10-Year: as of this morning 1.52%
    • Unchanged from prior day’s trading
  • YIELD CURVE: as of this morning 1.29
    • Down from prior day’s trading at 1.30 

MACRO DATA POINTS (Bloomberg Estimates):

  • 7am: Bank of England rate decision
  • 7:30am: Challenger Job Cuts Y/y, July, (prior -9.4%)
  • 7:45am: ECB rate decision
  • 8am: RBC Consumer Outlook Index, Aug. (prior 47)
  • 8:30am: Initial Jobless Claims, July 28, est. 370k (prior 353k)
  • 8:30am: Continuing Claims, July 21, est. 3.29m (prior 3.29m)
  • 9:45am: ISM New York, July (prior 49.7)
  • 9:45am: Bloomberg Consumer Comfort, July 29 (prior -38.5)
  • 10am: Factory Orders, June, est. 0.5% (prior 0.7%)
  • 10am: Freddie Mac mortgage rates
  • 10:30am: EIA natural gas change
  • N/A: ICSC Chain Store Sales Y/y, July (prior 0.2%) 

GOVERNMENT/POLITICS:

    • House meets at 10am; Senate in session
    • Federal Energy Regulatory Commission hosts regulators from 11
    • Asia-Pacific nations for discussion on grid reliability, renewable sources of energy and market regulation, 8:30am
    • House Financial Services subcommittee on domestic monetary policy will hold a hearing to examine parallel currencies and the emergence of alternative forms of money, 10am
    • Senate Banking subcommittee on securities, insurance and investment on “remaining challenges” in the tri-party repo market, 9am
    • House Oversight and Government Reform Committee hearing on “IRS: Enforcing ObamaCare’s New Rules and Taxes”
    • House Energy and Commerce Committee panel hearing on difference for energy development on federal land compared with private property production, 9am
    • House Energy and Power subcommittee holds forum on the Clean Air Act, 2pm
    • Interior Department Acting Inspector General Mary Kendall testifies about review of 2010 offshore drilling moratorium, compliance with subpoenas at House Natural Resources Committee, 10am
    • House transportation committee will hold a hearing to look at contracting out food service on Amtrak, 10am
    • Renewable Fuels Association, Growth Energy hold briefing to discuss drought ethanol production, 12pm

WHAT TO WATCH: 

  • ECB President Draghi risks market wrath as pressure for ECB action grows
  • Retailers report sales data for July
  • Knight revenue hit could be $170m after tech issues affected mkt-making unit, JPMorgan says
  • California says tax rev. "at risk" from Facebook’s price drop
  • San Bernardino, Calif., files for bankruptcy protection
  • Coca-Cola said to explore bid for F&N’s beverage business
  • Kinross Gold fires CEO Tye Burt, replacing him with Rollinson
  • Yahoo sued after disclosure of 450k user mames, passwords stolen
  • Apple to seek sanctions for Samsung release in patent trial
  • Sony cuts profit forecast on slowing demand, stronger yen
  • Sharp widens FY net loss forecast to 250b yen, to cut 5k jobs this FY
  • Halozyme immune deficiency drug rejected by FDA as clinical trials halted
  • Murdoch’s A$2b TV bid cleared by Australian regulator
  • Eloqua raises $92m, pricing software IPO at top of range
  • Madoff Trustee sues N.Y. Attorney General to stop Merkin accord

EARNINGS:

    • Becton Dickinson (BDX) 6am, $1.53
    • Cigna (CI) 6am, $1.42
    • Fortress Investment Group LLC (FIG) 6am, $0.09
    • Quanta Services (PWR) 6am, $0.32
    • Time Warner Cable (TWC) 6am, $1.38
    • Spectra Energy (SE) 6:30am, $0.36
    • Gildan Activewear (GIL CN) 6:33am, $0.67
    • Teradata (TDC) 6:55am, $0.65
    • Cardinal Health (CAH) 7am, $0.72
    • Duke Energy (DUK) 7am, $0.97
    • Enbridge (ENB CN) 7am, $0.38
    • Henry Schein (HSIC) 7am, $1.10
    • Lear (LEA) 7am, $1.29
    • Scripps Networks Interactive (SNI) 7am, $0.87
    • Xcel Energy (XEL) 7am, $0.36
    • Xylem/NY (XYL) 7am, $0.49
    • Teva (TEVA) 7am, $1.28
    • MGIC Investment (MTG) 7am, $0.55
    • Plains Exploration & Production Co (PXP) 7am, $0.64
    • Beam (BEAM) 7:01am, $0.54
    • DIRECTV (DTV) 7:30am, $1.14; Preview
    • General Motors Co (GM) 7:30am, $0.75; Preview
    • Parker Hannifin (PH) 7:30am, $1.91
    • SCANA (SCG) 7:30am, $0.49
    • Sealed Air (SEE) 7:30am, $0.35
    • TECO Energy (TE) 7:30am, $0.35
    • Ariad Pharmaceuticals (ARIA) 7:35am, $(0.28)
    • Ameren (AEE) 7:42am, $0.62
    • Apache (APA) 8am, $2.53
    • Kellogg Co (K) 8am, $0.84
    • Pinnacle West Capital (PNW) 8am, $1.05
    • Spectra Energy Partners (SEP) 8am, $0.40
    • Valeant Pharmaceuticals International (VRX CN) 8am, $0.98
    • CenterPoint Energy (CNP) 8:15am, $0.25
    • Clorox (CLX) 8:30am, $1.27; Preview
    • Denbury Resources (DNR) 8:30am, $0.33
    • Rowan Cos Plc (RDC) 8:30am, $0.49
    • Sempra Energy (SRE) 9am, $0.82
    • Great-West Lifeco (GWO CN) 10:50am, C$0.52
    • Inter Pipeline Fund (IPLu CN) 11:20am, C$0.25
    • IGM Financial (IGM CN) 12:13pm, C$0.75
    • American International Group (AIG) 4pm, $0.60
    • Kraft Foods (KFT) 4pm, $0.66
    • SBA Communications (SBAC) 4pm, $(0.16)
    • Southwestern Energy Co (SWN) 4pm, $0.26
    • American Capital Agency (AGNC) 4:01pm, $1.26
    • CBS (CBS) 4:01pm, $0.59
    • Kodiak Oil & Gas (KOG) 4:01pm, $0.10
    • Pitney Bowes (PBI) 4:01pm, $0.49
    • Sunoco (SUN) 4:01pm, $0.52
    • Molycorp (MCP) 4:01pm, $0.08
    • LinkedIn (LNKD) 4:02pm, $0.16
    • Activision Blizzard (ATVI) 4:05pm, $0.12
    • Fluor (FLR) 4:05pm, $0.92
    • PerkinElmer (PKI) 4:05pm, $0.49
    • SandRidge Energy (SD) 4:05pm, $0.01
    • ON Semiconductor (ONNN) 4:05pm, $0.14
    • Rovi (ROVI) 4:05pm, $0.36
    • Apartment Investment & Management Co (AIV) 4:15pm, $0.41
    • Microchip Technology (MCHP) 4:15pm, $0.48
    • Public Storage (PSA) 5:03pm, $1.51
    • Agrium (AGU CN) Post-Mkt, $5.45
    • Liberty Global (LBTYA) Post-Mkt, $0.16

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

 

GOLD – all that glitters is not what the Fed’s groupies were begging for yesterday; no drugs = Dollar up, gold down. The Correlation Risk on that relationship is running at -.7--.8; so no surprise there. TREND and TAIL resistance for Gold remain overhead at 1624 and 1679. 

  • Drought Added to Fedorov Tasks as Russia Joins WTO: Commodities
  • London Overtakes New York as Brent Oil Beats WTI: Energy Markets
  • Iran Loses $133 Million a Day on Embargo as Oil Buoys Obama
  • China Set to Cut Corn Imports as Drought Spurs Record Price
  • Oil Rises a Second Day as U.S. Inventories Decline, ECB Meets
  • Gold Climbs for First Time in Four Days as Korea Buys, ECB Meets
  • Grains Drop as U.S. Rains May Ease Drought and EU Harvests Crops
  • Copper Swings Between Advances, Declines Amid ECB Speculation
  • Coffee Rises in London as Supplies May Be Limited; Sugar Falls
  • Mitsubishi, Mitsui Profits Slide on Iron Ore, Coal Price Slump
  • South Korea Raises Gold Reserves Third Time Since June Last Year
  • South Korea May Stockpile Grains Overseas to Stabilize Costs
  • Monsanto Wins $1 Billion Patent-Infringement Verdict From DuPont
  • Factory Slowdown Means China Silver Need Drops: Chart of the Day
  • Looming Drought in India Risks Sugar Exports as Prices Rally
  • Cocoa Butter Ratios Said to Climb as Processors Use Stockpiles

THE HEDGEYE DAILY OUTLOOK - 4

 

 

CURRENCIES

 

THE HEDGEYE DAILY OUTLOOK - 5

 

 

EUROPEAN MARKETS


SPAIN – 1st stock market to back off its drug lord squeeze is the most unhealthy one; watching the IBEX and the Euro very closely here as they both back off TRADE lines of 6726 and $1.23 resistance; stealth signals that Draghi’s bluff will have big impact, if in fact he’s bluffing (immediate-term downside in the Eurostoxx50 of 3.5% if he is).

 

THE HEDGEYE DAILY OUTLOOK - 6

 

 

ASIAN MARKETS


ASIA – once we get through the whatever part from Draghi this morning, the drug addicts are going to have a hard time convincing all of Asia that economic growth slowing wont slow faster w/ Brent Oil at $106; China straight back down last night (-14% since May); Japan down -16% since March; and KOSPI backs off TREND resistance again, hard.

 

THE HEDGEYE DAILY OUTLOOK - 7

 

 

MIDDLE EAST

 

THE HEDGEYE DAILY OUTLOOK - 8

 

 

 

The Hedgeye Macro Team

 


GET THE HEDGEYE MARKET BRIEF FREE

Enter your email address to receive our newsletter of 5 trending market topics. VIEW SAMPLE

By joining our email marketing list you agree to receive marketing emails from Hedgeye. You may unsubscribe at any time by clicking the unsubscribe link in one of the emails.

next