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THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – September 26, 2012

As we look at today’s set up for the S&P 500, the range is 28 points or -0.80% downside to 1430 and 1.14% upside to 1458. 

                                            

SECTOR AND GLOBAL PERFORMANCE


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EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: on 09/25 NYSE -1409
    • Decrease versus the prior day’s trading of -586
  • VOLUME: on 09/25 NYSE 755.74
    • Increase versus prior day’s trading of 20.81%
  • VIX:  as of 09/25 was at 15.43
    • Increase versus most recent day’s trading of 9.05%
    • Year-to-date decrease of -34.06%
  • SPX PUT/CALL RATIO: as of 09/25 closed at 1.74
    • Down from the day prior at 2.59

CREDIT/ECONOMIC MARKET LOOK:


BERNANKE – every Qe has been met w/ a shorter, steeper, asset price rally, but a faster correction; this is doing nothing to inspire price stability and employment; Financials (XLF) and Commodities (CRB) down -4.2% and -4.3%, respectively, since what will be remembered as a historic morning-after in US economic history (SEP 14, 2012). 

  • TED SPREAD: as of this morning 25.70
  • 3-MONTH T-BILL YIELD: as of this morning 0.11%
  • 10-Year: as of this morning 1.66%
    • Decrease from prior day’s trading of 1.67%
  • YIELD CURVE: as of this morning 1.39
    • Down from prior day’s trading at 1.41

MACRO DATA POINTS (Bloomberg Estimates)

  • 7am: MBA Mortgage Applications, week of Sept. 21 (prior -0.2%)
  • 10am: New Home Sales, Aug. est. 380k (prior 372k)
  • 10:30am: DoE Oil, Gasoline Inventories
  • 11am: Fed to purchase $4.25b-$5b notes due 9/30/2018-8/15/2020
  • 11am: Business Roundtable releases 3Q CEO economy survey
  • 1pm: U.S. to sell $35b 5-year notes
  • 1:15pm: Fed’s Evans speaks in Hammond, Indiana

GOVERNMENT:

    • Secretary of State Hillary Clinton delivers remarks at UN on HIV/AIDS, 9am
    • TeleCommunication Systems, Northrop Grumman, Lockheed Martin officials unveil new user terminal for secure military satellite communications, 8:30am

WHAT TO WATCH:

  • Spanish government bonds fall amid bailout speculation
  • Kraft Foods Group to replace Alpha Natural in S&P 500
  • Intel CEO said to tell staff that Microsoft’s Windows 8 operating system is being released before fully ready
  • Yahoo says Ken Goldman to replace Tim Morse as finance chief
  • Credit Suisse said to consider merging asset management unit
  • EADS CEO struggles to quell German skepticism on BAE merger
  • Ameriprise said to near purchase of ING asset management unit
  • Bank of America said to plan about 40 job cuts in Asia
  • IBM’s Rometty to succeed former CEO Palmisano as chairman
  • GE raises $462m from selling 7.6% stake of Bank of Ayudhya
  • Barclays unit sued over securities by U.S. Credit Union regulator
  • Cargill says looking for acquisitions to meet target growth

EARNINGS:

    • AGF Management (AGF/B CN) 8am, C$0.19
    • Progress Software (PRGS) 4:30pm, $0.23
    • HB Fuller (FUL) After-mkt, $0.53
    • Worthington (WOR) After-mkt, $0.47

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • Oil Falls to Seven-Week Low on Demand Outlook, Stockpile Gain
  • Billionaire Rinehart Sued for Ownership of Pilbara Ore Mines
  • Sugar to Extend Bearish Run in Third Year of Glut, ISO Says
  • Copper Drops on Concern Global Stimulus May Fail to Spur Growth
  • Gold Gains in London on Signs of Demand in Euros, Indian Rupees
  • Soybeans Drop on Brazilian Conditions, U.S. Harvest Progress
  • Iron Ore Unlikely to Rebound as China Slows, Shale-Inland Says
  • Rebar Falls in Shanghai on Concern Housing Curbs May Sap Demand
  • Palm Oil Set for Biggest Quarterly Loss Since 2008 on Stockpiles
  • AngloGold Operations Halted in South Africa as Strikes Spread
  • Natural Gas Pipelines to Expand U.S. Supply Glut: Energy Markets
  • China Coal Inventory Drop Suggests Destocking End Is Nigh
  • Paraguay Reclaiming Energy From Brazil in Franco Industrial Push
  • Cargill Says Grain Rally Means No Shortage
  • U.K. Farms Face Organic Wheat Seed Shortage as Rain Spurs Blight

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CURRENCIES


USD – get the Dollar right, you’ll get most things beta right; that’s the story of the last 7 trading sessions (stocks down for 6 of 7 with the USD straight up on the bounce off its TAIL support line of $78.11). Right here the USD is immediate-term TRADE overbought; Euro 1.28 immediate-term TRADE oversold, so we bought stocks into the close yesterday, including AAPL.

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EUROPEAN MARKETS


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ASIAN MARKETS


JAPAN – the BOJ has plenty of experience to show into Krugman, Bernanke, and the Princeton School of Keynesian Fiscal Cliffs; remember Japan’s additional 10 TRILLION Yens in “stimulation” last wk? never mind a 1.5 day rip like Bernanke had, Japan only had 1 day – expensive!; Nikkei down another 2% last night, down -13.2% since #GrowthSlowing started, globally, in March.

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MIDDLE EAST


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The Hedgeye Macro Team