THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – October 3, 2012


As we look at today’s set up for the S&P 500, the range is 18 points or -1.09% downside to 1430 and 0.16% upside to 1448. 

                                            

SECTOR AND GLOBAL PERFORMANCE


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EQUITY SENTIMENT:

  • ADVANCE/DECLINE LINE: on 10/02 NYSE 196
    • Decrease versus the prior day’s trading of 718
  • VOLUME: on 10/02 NYSE 596.29
    • Decrease versus prior day’s trading of -11.31%
  • VIX:  as of 10/02 was at 15.71
    • Decrease versus most recent day’s trading of -3.74%
    • Year-to-date decrease of -32.86%
  • SPX PUT/CALL RATIO: as of 10/02 closed at 2.56
    • Up from the day prior at 1.68

CREDIT/ECONOMIC MARKET LOOK:


TREASURIES – the bond market agrees with me more and more by the day that both Growth and #EarningsSlowing matter a lot more than the latest Spanish conquistador whisper; 10yr yield falls again this morning, down to 1.61%; no support to 1.57% and the Yield Spread is compressing to its lowest level (138bps wide) since Bernanke’s Sep14 top.

  • TED SPREAD: as of this morning 26.78
  • 3-MONTH T-BILL YIELD: as of this morning 0.09%
  • 10-Year: as of this morning 1.61%
    • Decrease from prior day’s trading of 1.62%
  • YIELD CURVE: as of this morning 1.38
    • Down from prior day’s trading at 1.39

MACRO DATA POINTS (Bloomberg Estimates)

  • 7:00am: MBA Mortgage, Sept. 28 (prior 2.8%)
  • 8:15am: ADP Employment, Sept. est. 140k (prior 201k)
  • 10am: ISM Non-Manufacturing, Sept. est. 53.4 (prior 53.7)
  • 10:30am: DoE inventories
  • 11:00am: Fed to purchase $4.25b-$5.25b debt

GOVERNMENT:

    • Obama, Romney debate jobs and taxes at University of Denver. Moderated by Jim Lehrer of PBS’s NewsHour. 9pm
    • U.S. ITC holds hearing on final investigation of antidumping duties for solar-energy imports from China. 9:30am
    • Senate Homeland Security panel issues findings of two-year bipartisan investigation into fusion centers, which serve as focal points in gathering, sharing information on threats. 9am

WHAT TO WATCH:

  • Services industries in U.S. probably little changed in Sept.
  • Obama, Romney face off in first of three presidential debates
  • China non-manufacturing index falls as economic growth cools
  • Bristol-Meyers returns Plavix, Avapro rights to Sanofi
  • JPMorgan rivals face billions in damages after NY fraud case
  • Boeing lowers growth forecast for global air-cargo market
  • Amerigroup delays investor vote to end Wellpoint deal lawsuits
  • EBA to release figures today on how lenders met a $149b capital target
  • Carlyle Group buys Vermillion to expand beyond private equity
  • Hewlett-Packard hosts analyst day; forecasts may be updated

EARNINGS:

    • Family Dollar Stores (FDO) 7am, $0.75
    • RPM International (RPM) 7:30am, $0.64
    • Monsanto (MON) 8am, $(0.43)
    • Marriott International (MAR) 4:30pm, $0.40

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

 

OIL – bearish is as bearish does; our TAIL risk line for Brent remains just inside of $113 and continues to pressure that popping sound of commodity bubbles; fully loaded, rumors not getting EUR/USD anywhere close to its TAIL risk line of $1.31; from here, Dollar up can easily take commodities lower – we’ll see if Romney can land a punch tonight for USD.

  • Oil Falls to Four-Day Low as U.S. Supply Increases, China Slows
  • Iron Ore Heads for Longest Bear Market in 20 Years: Commodities
  • Corn Crop in China Curbed by August Typhoon May Lift Imports
  • Copper Drops on Concern European Debt Crisis Threatens Demand
  • Nickel Surplus May Expand to Five-Year High on New Mine Projects
  • Malaysia’s Dompok Proposes Crude Palm Oil Export Tax to Be Cut
  • Gold Swings Between Gains and Losses Before U.S. Jobs Report
  • Cocoa Falls After Ivory Coast Sets Farmer Price; Coffee Advances
  • Palm Oil Set to Extend Losses as Stockpiles Climb on Weak Demand
  • Norway Port Set to Boom With Iron Ore Shipped to China: Freight
  • Mining Capex to Slow in 2013 With Metals Prices Under Pressure
  • VLCC Shipping Rates from Arabian Gulf Below October 2011 Lows
  • Dry Bulk Rates for Capesize, Panamax Recover From Recent Lows
  • Soybeans Drop to Lowest Since July on U.S. Harvest, Brazil Rains

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CURRENCIES

 

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EUROPEAN MARKETS


SPAIN – so they lied about their GDP numbers for a few yrs and just dropped one of the biggest Service PMI bombs of 2012 (40 in SEP vs 44 in AUG); what’s another 100-300B for dysfunctional banks, amongst political friends? What’s amazing to me is how bad a lot of this global growth data is (France Service PMI 45 vs 49), despite the market’s rally to the September no-volume highs.

 

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ASIAN MARKETS

 

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MIDDLE EAST


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The Hedgeye Macro Team

 

 

 

 


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