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THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – August 7, 2012


As we look at today’s set up for the S&P 500, the range is 34 points or -1.45% downside to 1374 and 0.99% upside to 1408. 

                                            

SECTOR AND GLOBAL PERFORMANCE


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EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: on 08/06 NYSE 765
    • Down  versus the prior day’s trading of 1998
  • VOLUME: on 08/06 NYSE 647.20
    • Decrease versus prior day’s trading of -14.12%
  • VIX:  as of 08/06 was at 15.95
    • Increase versus most recent day’s trading of 1.98%
    • Year-to-date decrease of -31.84%
  • SPX PUT/CALL RATIO: as of 08/06 closed at 1.54
    • Up from the day prior at 1.27 

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: as of this morning 36
  • 3-MONTH T-BILL YIELD: as of this morning 0.08%
  • 10-Year: as of this morning 1.59%
    • Increase from prior day’s trading of 1.57%
  • YIELD CURVE: as of this morning 1.35
    • Up from prior day’s trading at 1.33 

MACRO DATA POINTS (Bloomberg Estimates):

  • 6am: EFSF to sell up to EU1.5b 91-day bills
  • 7:45am/8:55am: ICSC/Redbook retail sales
  • 10am: JOLTs Job Openings, June, est. 3717 (prior 3642)
  • 11am: U.S. Fed to purchase $4.25b-$5b notes in 8/15/2018 to 5/15/2020 range
  • 11:30am: U.S. to sell 4-week bills
  • 1pm: U.S. to sell $32b 3-year notes
  • 2:30pm: Fed’s Bernanke speaks by video on financial education in Washington
  • 3pm: Consumer Credit, June, est. $10.5b (prior $17.118b, revised)
  • 4:30pm: API inventories 

GOVERNMENT/POLITICS:

    • House, Senate meet in pro-forma sessions
    • Senate Majority Leader Harry Reid, D-Nev., Center for American Progress host National Clean Energy Summit, with speakers include Interior Secretary Ken Salazar, former President Bill Clinton
    • FCC Chairman Julius Genachowski, Ben Hecht, chairman of Connect2Compete announce launch of nationwide computer recycling, donation effort, 11am 

WHAT TO WATCH: 

  • Standard Chartered plunges; faces New York suspension on Iran
  • HTC extends decline to 2008 low after forecast of sales drop
  • Pfizer-J&J drop Alzheimer’s drug trials after second failure
  • Chesapeake posts record profit as asset-sale goals expand
  • Knight Capital’s three new board members will be picked by Blackstone, General Atlantic, the board w/ Jefferies approval
  • SEC freezes another $6m in Nexen insider-trading case
  • Icahn seeks talks to buy remaining CVR Energy shrs, $29 ea.
  • Second TSE system error in seven months halts derivatives
  • Italian economy contracts for 4th straight quarter amid slump
  • CFA Level III exam results due today
  • Hedge funds gained 0.2% last month, trailing stocks
  • U.S. CEOs less confident on economy: survey 

EARNINGS:

    • Emerson Electric (EMR) 6:30am, $1.00
    • CVS Caremark (CVS) 6:45am, $0.80; Preview
    • Church & Dwight (CHD) 7am, $0.55
    • Fossil (FOSL) 7am, $0.79
    • Marsh & McLennan (MMC) 7am, $0.58
    • Sirius XM Radio (SIRI) 7am, $0.02
    • TransDigm Group (TDG) 7am, $1.70
    • MGM Resorts (MGM) 7:30am, $(0.15)
    • Molson Coors Brewing (TAP) 7:30am, $1.20
    • Oaktree Capital (OAK) 7:30am, $0.61
    • Tenet Healthcare (THC) 7:30am, $0.05
    • Pepco Holdings (POM) 7:35am, $0.31
    • Melco Crown (MPEL) 7:40am, $0.17
    • Brookfield Renewable Energy (BEP-U CN) 8am, $0.10
    • Charter Communications (CHTR) 8am, $(0.21)
    • Cablevision Systems (CVC) 8:30am, $0.19
    • FirstEnergy (FE) 8:30am, $0.64
    • PG&E (PCG) 9:01am, $0.82
    • Primaris Retail REIT (PMZ-U CN) 4pm, C$0.36
    • Rackspace Hosting (RAX) 4pm, $0.18
    • TW Telecom (TWTC) 4pm, $0.14
    • Priceline.com (PCLN) 4:01pm, $7.36
    • XL Group (XL) 4:01pm, $0.55
    • Alterra Capital Holdings (ALTE) 4:04pm, $0.58
    • Live Nation Entertainment (LYV) 4:04pm, $0.06
    • Express Scripts Holding (ESRX) 4:05pm, $0.82; Preview
    • Walt Disney (DIS) 4:14pm, $0.93
    • Energy Transfer Equity (ETE) 4:40pm, $0.38
    • Energy Transfer Partners (ETP) 4:40pm, $0.46
    • Renren (RENN) 5pm, $(0.04) 

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

 

OIL – ripping humanity a new one this morning on the real (inflation adjusted) consumption growth front. At $110, Brent is up +25% since June! So get ready for every CPI and PPI report to accelerate, after they’ve deflated for the last few months; economic tailwind is now a big headwind.

  • Iron-Ore Rout Seen Curbing Losses for Commodity Ships: Freight
  • Rice Hoard Offers World Respite as Food Costs Surge: Commodities
  • SovEcon Says Russian Wheat Harvest May Be Lower Than in 2010
  • Soybeans Gain as Rains Seen Failing to Revive Drought-Hit Crop
  • Barrick Gold Studies Acquiring Assets as It Reviews Costly Mines
  • Chinese Smelters May Boost Copper Exports After Tolling Tax Cut
  • Gold Increases on Speculation a Weaker Dollar Will Spur Demand
  • Japan Seeks to Buy 106,530 Tons of Milling Wheat in Tender
  • Copper Gains for Third Day Before China Inflation Data This Week
  • CBH Says Western Australia Grain Shipments May Climb to Record
  • Crude Supplies Fall to Three-Month Low in Survey: Energy Markets
  • Palm Oil to Drop on Weak Demand, Stockpiles, TransGraph Says
  • Asteroid Mining Venture Adds Google-Backed Billionaire Investors
  • Richest Family Offices Seeing Fastest Growth as Firms Oust Banks
  • Cotton Harvest in India to Tumble as Dry Weather Hurts Crops
  • China Overtakes South Africa on Ferrochrome Output, Merafe Says

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CURRENCIES

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EUROPEAN MARKETS


ITALY – good news, Italy is experiencing a stagflating recession (Q2 GDP -2.5% y/y), youth unemployment just hit 36%, but “the stock market is up.” So is Venezuela’s. This short squeeze has been impressive.

 

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ASIAN MARKETS


ASIA – Asia’s 2-day equity rally ends on a whimper w/ China closing +0.13%, KOSPI +0.05%, and Singapore -0.14% (Japan was up +0.88%, failed right at immediate-term TRADE resistance of 8813). Where do we go from here? Australia said no more rate cuts for you. Brent Oil at $110 is not good for whatever is left of Eastern consumption growth.

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MIDDLE EAST

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The Hedgeye Macro Team