THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – September 5, 2012


As we look at today’s set up for the S&P 500, the range is 9 points or -0.49% downside to 1398 and 0.15% upside to 1407. 

                                            

SECTOR AND GLOBAL PERFORMANCE


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EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: on 09/04 NYSE 541
    • Decrease versus the prior day’s trading of 1174
  • VOLUME: on 09/04 NYSE 639.22
    • Decrease versus prior day’s trading of -14.32%
  • VIX:  as of 09/04 was at 17.98
    • Increase versus most recent day’s trading of 2.92%
    • Year-to-date decrease of -23.16%
  • SPX PUT/CALL RATIO: as of 09/04 closed at 1.17
    • Down from the day prior at 1.84

CREDIT/ECONOMIC MARKET LOOK:


YIELD SPREAD – one of the top3 risks we’ve discussed in our Global Macro Themes deck for Q312 remains a question – will the Yield Spread snap this 125bps level (held it in 2008 and a few times since)?; 133bps wide this morn, down -20bps in 2wks like a knife through hot bull butter. 

  • TED SPREAD: as of this morning 32.06
  • 3-MONTH T-BILL YIELD: as of this morning 0.10%
  • 10-Year: as of this morning 1.56%
    • Decrease from prior day’s trading of 1.57%
  • YIELD CURVE: as of this morning 1.33
    • Down from prior day’s trading at 1.34

MACRO DATA POINTS (Bloomberg Estimates)

  • 7am: MBA Mortgage Applications, Aug. 31 (prior -4.3%)
  • 7:45am: ICSC weekly sales
  • 8:55am: Johnson/Redbook weekly sales
  • 8:30am: Nonfarm Productivity, 2Q final, est. 1.8% (prior 1.6%)
  • 8:30am: Unit Labor Costs, 2Q final, est. 1.4% (prior 1.7%)
  • 9:45am: ISM New York, Aug. (prior 55.2)
  • 11am: Fed to buy $4.5b-$5.5b notes
  • 11:30am: U.S. to sell $40b 4-wk bills, $35b 11-day cash management bill
  • 4:30pm: API weekly inventories

GOVERNMENT:

    • President Barack Obama arrives in Charlotte for DNC, 2:45pm
    • Prime-time DNC speakers include former President Bill Clinton, who will formally nominate Obama as party’s candidate for a second term, and Chicago Mayor Rahm Emanuel
    • House, Senate not in session
    • American Bankers Association set to vote tmw on whether to create non-profit political fund allowing members to funnel donations anonymously to pro-industry candidates

WHAT TO WATCH:

  • FedEx cuts profit forecast as sales slump on economy
  • Facebook CEO Zuckerberg won’t sell shrs for at least a yr
  • 3M still in talks to buy Avery unit after regulator objections
  • GM August China sales rise 7.3% as demand for Chevrolet rebounds
  • GE wins $7b contract as Pentagon August awards drop 40%
  • American, United Airlines can’t avoid trial over 9/11 attacks
  • Nokia, Microsoft unveil latest interation of Windows phones
  • Motorola, Verizon Wireless roll out new phone
  • Americans say better off since Obama even as slump impact lasts
  • Australia’s eco growth slows more than forecast on housing
  • ING to sell entire Capital One stake after online bank deal
  • Solyndra will add tax-break details to resolve U.S. objection
  • Hackers claim release of 1m Apple IDs; FBI denies breach
  • Portugal 10-Year Yield Falls Below 9%, First Time Since May 2011

EARNINGS:

    • Pharmacyclics (PCYC) 6am, $(0.26)
    • Dollar General (DG) 7am, $0.64 - Preview
    • Conn’s (CONN) 7am, $0.35
    • Alimentation Couche Tard (ATD/B CN) 11am, $0.90
    • H&R Block (HRB) 4pm, $(0.37)
    • VeriFone Systems (PAY) 4:01pm, $0.70
    • Verint Systems (VRNT) 4:05pm, $0.51
    • Korn/Ferry (KFY) 4:30pm, $0.18
    • ABM Industries (ABM) 5pm, $0.42
    • Men’s Wearhouse (MW) 5:30pm, $1.13
    • Harry Winston Diamond (HW CN) Post-Mkt, $0.15
    • FuelCell Energy (FCEL) Post-Mkt, $(0.05)

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • Oil Supplies Tumble on Hurricane Isaac in Survey: Energy Markets
  • Monsanto Corn Seen Losing Effect Amid U.S. Drought: Commodities
  • Gold Holdings Signal Prices Surging to $1,900: Chart of the Day
  • Oil Trades Near One-Week Low as U.S. Manufacturing Contracts
  • Europe’s Grains Won’t Make Up for Losses of U.S., Russia Drought
  • Gold Set to Decline in London as Stronger Dollar Curbs Demand
  • Copper Drops as Australian Slowdown Fuels World Growth Concern
  • German Next-Week Power Falls on More Wind; French Contract Drops
  • India to Maintain Price of State Wheat for Mills, Traders
  • U.K. Gas Rises as Norway Deliveries to Belgium Resume After Work
  • Total, Lukoil to Halt Hydrocracker at Dutch Refinery Tomorrow
  • Hormuz Strait Unlikely to Close, Iraq’s Shahristani Tells Sabah
  • Venezuela’s Amuay Refinery to Resume Normal Operations in ‘Days’
  • Ghana Cocoa Buyer Cancels $260 Million Debt Sale on High Yields
  • India Rules Out Banning Grain Exports
  • Wheat Drops as Cheap Russian Supply Lures Buyers Away From U.S.
  • Robusta Coffee Extends Losses on Producer Selling; Sugar Rises

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CURRENCIES


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EUROPEAN MARKETS


RUSSIA – can you say beta? If the USD rises and Oil/Gold etc fall from here, this could be Epic Part Deux (remember the March to May fall?); Russian stocks (RTSI) move back into crash mode this morning (-21% from the March top). Beta eats alpha.

 

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ASIAN MARKETS


ASIA – in a replay of March/April, Asian Equities are leading indicators for US Equities which seem to hold out for the hope until the bitter end of lower-highs; #GrowthSlowing is accelerating on the downside in both Japan and China (big economies that are #TooBigToBail); Nikkei’s decline since March to -15.4% (China hits another new low this morn, -17.1% since May).

 

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MIDDLE EAST


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