THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – September 19, 2012


As we look at today’s set up for the S&P 500, the range is 28 points or -0.91% downside to 1446 and 1.01% upside to 1474. 

                                            

SECTOR AND GLOBAL PERFORMANCE


THE HEDGEYE DAILY OUTLOOK - 1

 

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EQUITY SENTIMENT: 

  • ADVANCE/DECLINE LINE: on 09/18 NYSE -341
    • Increase versus the prior day’s trading of -1137
  • VOLUME: on 09/18 NYSE 632.88
    • Decrease versus prior day’s trading of -4.96%
  • VIX:  as of 09/18 was at 14.18
    • Decrease versus most recent day’s trading of -2.81%
    • Year-to-date decrease of -39.40%
  • SPX PUT/CALL RATIO: as of 09/17 closed at 1.49
    • Up  from the day prior at 1.33 

CREDIT/ECONOMIC MARKET LOOK:

  • TED SPREAD: as of this morning 28.24
  • 3-MONTH T-BILL YIELD: as of this morning 0.10%
  • 10-Year: as of this morning 1.79%
    • Decrease from prior day’s trading of 1.81%
  • YIELD CURVE: as of this morning 1.54
    • Down from prior day’s trading at 1.55 

MACRO DATA POINTS (Bloomberg Estimates)

  • 7am MBA Mortgage Applications, Sept. 14 (prior 11.1%)
  • 8:30am: Housing Starts, Aug. est. 767k (prior 746k)
  • 8:30am: Building Permits M/m, Aug. est. 796k (prior 811k)
  • 9:45am: Fed’s George at jobs conf. in Kansas City, Missouri
  • 10am: Existing Home Sales, Aug. est. 4.56m (prior 4.47m)
  • 10:30am: DoE Inventories
  • 11am: Fed to purchase $1.5b-$2b notes due 2/15/2036-8/15/2042
  • 7pm: Fed’s Fisher speaks on economy and policy in New York

GOVERNMENT:

    • Washington Day Ahead
    • House, Senate in session
    • Bernanke meets privately with Senate Finance Committee to discuss economy, automatic spending cuts, tax increases set to take effect in January, 4:30pm
    • CME Group President Terrence Duffy, SEC Commissioner Daniel Gallagher among speakers at Georgetown University conference on financial market quality
    • FDA advisory panel meets to consider using cell lines derived from human tumors for vaccine manufacture, 8am
    • U.S. Trade Representative Ron Kirk participates in Global Services Summit
    • House Oversight holds hearing on effectiveness of trade- adjustment assistance, 11am
    • Secretary Janet Napolitano testifies at Senate Homeland Security hearing on threats, agency responses, 10am

WHAT TO WATCH:

  • Bank of Japan unexpectedly expands asset-purchase fund by $126b
  • Goldman names Schwartz to succeed CFO Viniar
  • Samsung loses bid to lift Galaxy sales ban in Apple dispute
  • U.S. housing starts probably climbed to four-year high
  • ThaiBev supports Heineken bid for Fraser & Neave’s beer business
  • China resumes buying U.S. Treasury securities as trade surplus widens
  • Apple, publishers offer to shun price-fixing to end EU probe
  • Google joins Amazon, Facebook in new internet lobbying group
  • Anschutz plans to sell L.A.-based live event promoter AEG
  • Apple iPhone 5 praised for speed, faulted on maps by reviewers

EARNINGS:

    • Cracker Barrel Old Country Store (CBRL) 7am, $1.30
    • AutoZone (AZO) 7am, $8.40
    • Ascena Retail Group (ASNA) 7am, $0.29
    • General Mills (GIS) 7am, $0.62 - Preview
    • Steelcase (SCS) 4:01pm, $0.18
    • Adobe Systems (ADBE) 4:05pm, $0.59
    • Bed Bath & Beyond (BBBY) 4:15pm, $1.02
    • Clarcor (CLC) Aft-mkt, $0.69

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

 

OIL – get the Dollar right, you get Oil right, evidently. No, that wasn’t a fat finger on Monday; that was a man operating a machine that decided to sell Oil ahead of the USD’s 1st two-day up move in almost 6wks; Oil under price momentum pressure now that my immediate-term TRADE line of $113.95 broke (that’s why we got longer US Equities yesterday).

  • Lithium Boom Spurs Production From California Brine: Commodities
  • Oil at $100 No Spur Yet to Release Stockpiles: Energy Markets
  • Oil Extends Losses as Signs of More Supply Offset Japan Stimulus
  • Gold Seen Gaining From Six-Month High as Stimulus Spurs Demand
  • Soybeans Climb as Price Slump May Draw Importers and Investors
  • Copper Seen Advancing on Japanese Stimulus, Lower Stockpiles
  • Sugar Falls on Signs of Ample Supplies From Brazil; Cocoa Gains
  • BHP Says Pace of China Iron Ore Demand Has Slowed by Half
  • Farmer’s Daughter Haugerud Reaps Riches on Drought-Struck Corn
  • B2Gold to Buy CGA for $1.13 Billion to Add Philippine Mine
  • Saudi Arabia Acting to Reduce Oil Price, Gulf Official Says
  • Platinum Holdings Expand to Record on Mine Disruptions, QE3
  • Milk Powder Prices Advance to Five-Month High Amid U.S. Drought
  • China Sugar Output Seen Curbing Imports
  • Rebar in Shanghai Rises for Second Day on Ore Price, Cash Market
  • Chinese Ore Imports Seen Falling 24% as Australia Cuts Forecast
  • Uranium Recovery Postponed as Price Drops to 2-Year Low: Energy

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CURRENCIES


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EUROPEAN MARKETS


ITALY – watch this Italian Equity market closely as it diverges negatively vs Spain this wk (Italy has to beg for their bailout later); MIB index just snapped my immediate-term TRADE line of 16,239 as it makes lower-highs vs March.

 

THE HEDGEYE DAILY OUTLOOK - 6

 

 

ASIAN MARKETS


JAPAN – what’s another 10T, amongst Keynesian friends? Currency War remains on as Japan expands money printing operations to 80 TRILLION yens; Dollar up, Yen down, Japanese stocks up +1.2% (still -10% since March).

 

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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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