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
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
CURRENCIES
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).
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.
MIDDLE EAST
The Hedgeye Macro Team