THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – September 14, 2012


As we look at today’s set up for the S&P 500, the range is 36 points or -2.26% downside to 1427 and 0.21% upside to 1463. 

                                            

SECTOR AND GLOBAL PERFORMANCE


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EQUITY SENTIMENT: 

  • ADVANCE/DECLINE LINE: on 09/13 NYSE 1701
    • Increase versus the prior day’s trading of 778
  • VOLUME: on 09/13 NYSE 802.31
    • Increase versus prior day’s trading of 20.86%
  • VIX:  as of 09/13 was at 14.05
    • Decrease versus most recent day’s trading of -11.08%
    • Year-to-date decrease of -39.96%
  • SPX PUT/CALL RATIO: as of 09/13 closed at 1.11
    • Down  from the day prior at 1.12 

CREDIT/ECONOMIC MARKET LOOK:


Qe USA – never, in US economic history, has a > $4 national avg at the pump NOT slowed US economic growth; never is a long time; see our Qe note from yesterday showing you the 3 most powerful ramps in gas prices and what the US economy immediately did next (mid-2008, mid-2011, and Q1 of 2012). Its only not obvious to the willfully blind. 

  • TED SPREAD: as of this morning 29.21
  • 3-MONTH T-BILL YIELD: as of this morning 0.09%
  • 10-Year: as of this morning 1.81%
    • Increase from prior day’s trading of 1.72%
  • YIELD CURVE: as of this morning 1.58
    • Up from prior day’s trading at 1.49

MACRO DATA POINTS (Bloomberg Estimates)

  • 8:30am: Consumer Price Index M/m, Aug., est. 0.6% (prior 0.0%)
  • 8:30am: Advance Retail Sales, Aug. est. 0.8% (prior 0.8%)
  • 9:15am: Industrial Production, Aug., est. -0.1% (prior 0.6%)
  • 9:15am: Capacity Utilization, Aug., est. 79.2% (prior 79.3%)
  • 9:55am: University of Michigan Consumer Sentiment, Sept. preliminary, est. 74.0 (prior 74.3)
  • 10am: Business Inventories, July, est. -0.3% (prior 0.1%)
  • 11am: Fed to buy $1.5b-$2b notes due 2/15/2036-8/15/2042
  • 1pm: Baker Hughes rig count
  • 1pm: Fed’s Lockhart at employment conference in Atlanta
  • 1:45pm Fed’s Raskin speaks in Michigan on economy

GOVERNMENT:

    • Washington Day Ahead agenda
    • SEC holds a public hearing on ways to promote stability in markets reliant on highly automated trading systems; will focus on how market participants design, implement and manage trading technology after glitches disrupted Facebook’s initial public offering and pushed Knight Capital to brink of bankruptcy, 10am
    • ITC Judge releases findings in patent-infringement case that Samsung filed against Apple over smartphone features and ways to transmit data, after 9am
    • Treasury Undersecretary for Domestic Finance Mary Miller speaks at American Banker conference. Arlington, Va. 2:15pm
    • Transportation Secretary Ray Lahood, FTA Administrator Peter Rogoff make transit funding announcement, 12:30pm
    • Congressional Robotics Caucus holds briefing on National Robotics Initiative, 12:30pm
    • House, Senate in session

WHAT TO WATCH:

  • Germany’s Schaeuble cautions Spain against a full bailout
  • U.S. retail sales probably improved in Aug. on auto demand
  • Western Digital cuts rev. view, begins div. and $1.5b buyback
  • Peregrine’s Wasendorf released on bails after guilty plea
  • Visteon said to consider Leuliette as CEO while eyeing electronics unit
  • Time CEO Lang seeks to unify web and print advertising
  • Japan tells China to withdraw ships near disputed islands
  • Italian 10y yields fall below 5% for first time since March
  • California Attorney General investigates doctor-hospital deals: WSJ

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • Corn Bulls Retreat as Near-Record Costs Curb Demand: Commodities
  • Beef Premium Spurring Demand for Cheaper Pork: Chart of the Day
  • Oil Rises to $100 for First Time Since May After Fed Stimulus
  • Commodities Post Longest Rally Since 2010 as Fed Boosts Outlook
  • Platinum Heads for Longest Winning Run in 25 Years; Gold Rallies
  • Aluminum Heads for the Longest Rally in at Least 25 Years
  • Wheat Rises on Egyptian Purchase of French Grain, U.S. Drought
  • Coffee Headed for Longest Rally in Four Months; Cocoa Advances
  • Japan Draws Curtain on Nuclear Energy Following Germany: Energy
  • Rebar in Shanghai Gains to Three-Week High on Fed Stimulus Plan
  • Aluminum Backwardation Looms as Warehouse Backlog Limits Supply
  • Pemex’s Missing Oil Surges to All-Time High: Chart of the Day
  • Oil May Fall on Projected Supply Gain After Isaac, Survey Shows
  • Sugar Bulls Ascend as Rain Returning to Top Producer Brazil
  • Copper Jumps, Heads for Highest Close Since May on Fed Stimulus
  • Storm Effect on Oil Prices Waning as Shale Booms: Energy Markets

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CURRENCIES


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EUROPEAN MARKETS


Qe EUROPE – ok, when you have economic stagflation (zero to negative growth + inflation), what you really need (if you have a growth problem) is another rip in food/energy prices; that’ll get things fixed! $117.35 Brent Oil last, +33% since June.

 

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ASIAN MARKETS


Qe ASIA – straight up moves in the KOSPI +3.2%, Hang Seng +2.9%, and Nikkei +1.8%, but all to lower-highs vs Feb-March; no idea how the math works on commodity demand slowing as prices are rising for Asian export producers; Bernanke doesn’t care.

 

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MIDDLE EAST


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The Hedgeye Macro Team


Did the US Economy Just “Collapse”? "Worst Personal Spending Since 2009"?

This is a brief note written by Hedgeye U.S. Macro analyst Christian Drake on 4/28 dispelling media reporting that “US GDP collapses to 0.7%, the lowest number in three years with the worst personal spending since 2009.”

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7 Tweets Summing Up What You Need to Know About Today's GDP Report

"There's a tremendous opportunity to educate people in our profession on how GDP is stated and projected," Hedgeye CEO Keith McCullough wrote today. Here's everything you need to know about today's GDP report.

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Cartoon of the Day: Crash Test Bear

In the past six months, U.S. stock indices are up between +12% and +18%.

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GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist

“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.

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Exact Sciences Up +24% This Week... What's Next? | $EXAS

We remain long Exact Sciences in the Hedgeye Healthcare Position Monitor.

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Inside the Atlanta Fed's Flawed GDP Tracker

"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.

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Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

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People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

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UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

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Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

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Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

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An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

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