THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – August 29, 2012


As we look at today’s set up for the S&P 500, the range is 17 points or -0.52% downside to 1402 and 0.69% upside to 1419. 

                                            

SECTOR AND GLOBAL PERFORMANCE


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EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: on 08/28 NYSE 386
    • Increase versus the prior day’s trading of -149
  • VOLUME: on 08/28 NYSE 516.47
    • Increase versus prior day’s trading of 2.41%
  • VIX:  as of 08/28 was at 16.49
    • Increase versus most recent day’s trading of 0.86%
    • Year-to-date decrease of -29.53%
  • SPX PUT/CALL RATIO: as of 08/28 closed at 1.49
    • Down from the day prior at 1.80

CREDIT/ECONOMIC MARKET LOOK:


BONDS – hoowah! what a move in the US Treasury market – the 10yr yield looks like the Chinese synchro diving team here, dropping straight back down to 1.62%, snapping TRADE support of 1.65% like a knife through water – today’s US GDP report will remind the March 2012 “growth is back” bulls that stocks may have rallied for 6wks, but not for the growth reasons they called for back then.

  • TED SPREAD: as of this morning 32.65
  • 3-MONTH T-BILL YIELD: as of this morning 0.10%
  • 10-Year: as of this morning 1.64%
    • Increase from prior day’s trading of 1.63%
  • YIELD CURVE: as of this morning 1.37
    • Unchanged from prior day’s trading

MACRO DATA POINTS (Bloomberg Estimates)

  • 7am: MBA Mortgage Applications, Aug. 24 (prior -7.4%)
  • 8:30am: GDP Q/q (Annualized), 2Q, est. 1.7% (prior 1.5%)
  • 8:30am: Personal Consumption, 2Q, est. 1.5% (prior 1.5%)
  • 8:30am: GDP Price Index, 2Q, est. 1.6% (prior 1.60%)
  • 8:30am: Core PCE Q/q, 2Q, est. 1.8% (prior 1.8%)
  • 10am: Pending Home Sales M/m, July, est. 1% (prior -1.4%)
  • 10:30am: DoE Inventories
  • 11am: Fed to purchase $4.25b-$5b notes 8/31/2018-8/15/2020
  • 1pm: U.S. to sell $35b 5-yr notes
  • 2pm: Fed’s Beige Book

GOVERNMENT:

    • Republican National Convention, Day 3: Speakers include Paul Ryan; John McCain; Mitch McConnell; Jeb Bush; Tim Pawlenty; Condoleezza Rice
    • House, Senate not in session
    • SEC meets to consider eliminating prohibition against general solicitation, advertising in securities offerings, 10am
    • CMS holds semi-annual meeting of advisory panel on outpatient payments for hospitals, 9am
    • International Society of Air Safety Investigators holds annual seminar, with NTSB Vice Chairman Christopher Hart, 8am

WHAT TO WATCH:

  • Daikin buys Goodman Global for $3.7b to expand in Nth. America
  • Hurricane Isaac beginning to move into Louisiana, NHC says
  • G-7 countries call for increased oil output to meet demand
  • KKR said to be in talks to buy Renesas for $1.2b: Nikkei
  • Italy borrowing costs fall at 6m bill auction
  • Republican convention continues in Tampa; Paul Ryan speaks
  • Morgan Stanley, Citigroup delay valuation of brokerage JV
  • Wellpoint searches for new CEO as Angela Braly resigns
  • Apple’s request for Samsung ban to be heard Dec. 6
  • Swedish FSA says banks can lend more amid tougher rules

EARNINGS:

    • Joy Global (JOY) 6am, $1.89 - Preview
    • Fresh Market (TFM) 6am, $0.27
    • Jos A Bank (JOSB) 6am, $0.73
    • HJ Heinz (HNZ) 7am, $0.81
    • JA Solar (JASO) 7am, ($0.96)
    • Zale (ZLC) 7:30am, ($0.83)
    • Genesco (GCO) 7:31am, $0.26
    • Brown-Forman (BF/B) 8am, $0.63
    • Tivo (TIVO) 4pm, ($0.24)
    • Oxford Industries (OXM) 4pm, $0.63
    • Pandora Media (P) 4:02pm, ($0.03)
    • Vera Bradley (VRA) 4:02pm, $0.35
    • Greif (GEF) 4:07pm, $0.71
    • Canadian Western Bank (CWB CN) 6:48pm, $C$0.57

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • No Return to Dirty ’30s as Farmer Sees Drought Relieved by U.S.
  • Oil Falls From One-Week High on Isaac, G-7 as Gasoline Declines
  • Timah Restarts Tin Spot Sales After Advances, Sukrisno Says
  • Big Coal Faces Steel Slowdown Amid Shale-Gas Pain: Commodities
  • Southeast Asian Buyers Seek Cheaper Soybean Meal, Corn Supplies
  • Soybeans Rise for Second Day on Signs of Increasing World Demand
  • Monsoon Revival Brightens Prospects for India Rice, Cane Crops
  • Gold Seen Falling in London Before Bernanke Speech This Week
  • Aluminum Premiums in Japan Set for Record High as Supply Limited
  • Cocoa Rises as West Africa May Have Little to Sell; Sugar Gains
  • Gold ETP Assets Jump to Record to Overtake Italy’s Reserves
  • Lingerie Delayed as $517 Billion India Jam Idles Trucks: Freight
  • Platinum ‘Correction’ a Buying Opportunity: Technical Analysis
  • Gold Calls at 2008 High on Jackson Hole Bet
  • Tin Declines as Restart of Producer Sales Eases Supply Concern
  • Palm Oil Drops on Speculation Stockpiles to Increase in Malaysia
  • Gold Calls at 2008 High on Easing Bets for Jackson Hole: Options

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CURRENCIES

 

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EUROPEAN MARKETS


EUROPE – lower-highs on lower volumes across the board in all of the major Eurocrat markets; finally, the apex of the short squeeze looks to be over as my most immediate-term TRADE lines of price momentum are all snapping (for the IBEX that line = 7416).

 

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ASIAN MARKETS


CHINA – it’s not just U.S. consumers who couldn’t care less about 6 wk U.S. stock market rallies to lower highs; Chinese and Indian consumers do not like food/energy prices up here and neither do their stock markets; Shanghai Comp -1%, back to YTD lows.

 

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MIDDLE EAST


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