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
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
CURRENCIES
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.
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).
MIDDLE EAST
The Hedgeye Macro Team