TODAY’S S&P 500 SET-UP – September 13, 2012
As we look at today’s set up for the S&P 500, the range is 32 points or -1.22% downside to 1419 and 1.01% upside to 1451.
SECTOR AND GLOBAL PERFORMANCE
EQUITY SENTIMENT:
- ADVANCE/DECLINE LINE: on 09/12 NYSE 778
- Decrease versus the prior day’s trading of 1030
- VOLUME: on 09/12 NYSE 663.83
- Decrease versus prior day’s trading of -0.47%
- VIX: as of 09/12 was at 15.80
- Decrease versus most recent day’s trading of -3.72%
- Year-to-date decrease of -32.48%
- SPX PUT/CALL RATIO: as of 09/12 closed at 1.12
- Down from the day prior at 1.64
CREDIT/ECONOMIC MARKET LOOK:
QE4 – pushing the goal posts out a full year to 2014 on January 25th was Qe3. That, in turn, slowed growth (oil up). Now the question is will Bernanke push out investor duration by 12 months at a time every 3-6 months? Just pull forward all the yield and performance chasing into 2012 and hope for the best. US Dollar is the biggest ball under water trade I have seen in a very long time into a very big event.
- TED SPREAD: as of this morning 29.77
- 3-MONTH T-BILL YIELD: as of this morning 0.10%
- 10-Year: as of this morning 1.74%
- Decrease from prior day’s trading of 1.76%
- YIELD CURVE: as of this morning 1.51
- Down from prior day’s trading at 1.52
MACRO DATA POINTS (Bloomberg Estimates)
- 8am: RBC Consumer Outlook Index, Sept. (prior 46.4)
- 8:30am: Producer Price Index M/m, Aug. est. 1.2% (prior 0.3%)
- 8:30am: Initial Jobless Claims, Sept. 8, est. 370k (prior 365k)
- 8:30am: Continuing Claims, Sept. 1 est. 3.318m (prior 3.322m)
- 9:45am: Bloomberg Consumer Comfort, Sept. 9 (prior -46.5)
- 10am: Freddie Mac mortgage rates
- 10:30am: EIA natural-gas change
- 11am: U.S. to announce plans for 10-yr TIPS auction on Sept. 20
- 12:30pm: FOMC rate decision
- 1pm: U.S. sells $13b 30-yr bonds
- 2pm: Fed to release projections of economy, interest rates
- 2pm: Monthly Budget Statement, Aug. est. -$170.0b (prior - $134.1b)
- 2:15pm: Fed’s Bernanke holds news conference
GOVERNMENT:
- Obama administration may detail sequestration cuts
- House, Senate in session
- House Armed Services panel holds hearing on F-22 pilot physiological issues, 10am
- House Oversight panel meets on spending for reconstruction in Afghanistan, 10am
- Interior Dept. officials testify on land, minerals management at House Natural Resources hearing, 10am
- House Energy panel holds hearing on U.S. energy independence, with Daniel Ahn, chief commodity economist for Citi; John Freeman, managing director of Raymond James; John Purcell, vice president for wind Energy at Leeco Steel, 10am
- Senate Banking hears from Consumer Financial Protection Bureau Director Richard Cordray on agency operation, 10am
- House Financial Services, Government Reform panels hold joint hearing on implementation of Jumpstart Our Business Startups Act, known as the JOBS Act, passed in April, 10am
- House Financial Services panel holds hearing on “Examining the Uses of Consumer Credit Data,” 2pm
- Senate Judiciary considers amending US law to clarify video tape service providers’ consent policies, 10am
- House Intelligence holds hearing on “National Security Threats Posed by Chinese Telecom Companies Working in the U.S.,” with representatives from Huawei, ZTE, 10am
- House Energy panel holds hearing on “Creating Opportunities through Improved Government Spectrum Efficiency,” with Steve Sharkey of T-Mobile USA, 10:15am
- House Transportation panel holds hearing on effectiveness of DOT’s truck and bus safety program, with Scott Mugno, vice president at FedEx Ground, 10am
WHAT TO WATCH:
- U.S. investors betting central bank will keep rate near zero
- Possible EADS, BAE merger may generate FY sales of ~$100b
- ECB member says central bank may never need to buy bonds
- SNB to maintain FX ceiling at 1.2 francs per euro
- Freddie Mac may get additional $3.4b in mortgage buybacks
- Moore Capital said to cut jobs in team restructuring
- Itochu in talks with Dole to buy packaged-food unit, Asian fruit & vegetable business
- Nomura’s Americas equities chief O’Kelly leaving amid overhaul
- Manhattan apartment vacancy rate rises as rents reach record
- U.S. embassy compound in Yemen stormed as film protests spread
EARNINGS: (All times ET, with Bloomberg est.)
- Pier 1 Imports (PIR) 6am, $0.19
- Empire (EMP/A CN) Pre-mkt, C$1.40
COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)
- Soy Rally Pushes Amazon Growers to Sow Record Crop: Commodities
- Chesapeake’s McClendon Taps Expanding Shale Oil Demand: Energy
- Gold Seen Falling Before Federal Reserve; Palladium Extends Gain
- Oil Trades Near Three-Week High on Mideast Protests, Fed Meeting
- Copper Swings Between Gains and Drops Before Fed Policy Decision
- Sugar Rises a Second Day as Brazil Rains May Return; Cocoa Gains
- Wheat Futures Climb as Importers Including Egypt Seek Supplies
- Indonesian Tin Smelters Resume Output After Metal Rallies
- Aluminum Stockpiles Climb the Most This Year on Detroit Jump
- LNG Shortage in Japan Spurring Record Expansion: Energy Markets
- Rebars Poised for First Weekly Gain in Five on Baoshan Pricing
- Cocoa Shipments From Indonesia Seen Declining on Local Grinding
- ‘Tomato Trade War’ Seen Sparking Broader U.S.-Mexico Food Fight
- Rubber Drops From Eight-Week High Ahead of Fed Stimulus Decision
- Palm Oil Declines as Stockpiles Set to Climb on Output Increase
- Thai Government May Buy 300,000 Tons of Rubber to Bolster Prices
CURRENCIES
EUROPEAN MARKETS
EUROPE – with the exception of Germany (making higher-highs vs March), all European Equity Indices are making lower-highs again this morning; stagflation is ultimately what Europe has to deal with now at $116 Brent Oil. 1970s stagflation kept US Equities at 7-8x earnings don’t forget. Short-term market moves do not represent economic realities.
ASIAN MARKETS
CHINA – We know, it’s weird, but after 6wks of rumors about the stimuli coming out of China, reality is there has been none – the Chinese do not appreciate the food/oil inflation Bernanke is perpetuating; Chinese stocks down -0.8% before his un-elected lordship provides causality and correlation to commodity markets.
MIDDLE EAST
The Hedgeye Macro Team
