TODAY’S S&P 500 SET-UP – November 20, 2012
As we look at today's setup for the S&P 500, the range is 37 points or 1.65% downside to 1364 and 1.02% upside to 1401.
SECTOR AND GLOBAL PERFORMANCE
EQUITY SENTIMENT:
CREDIT/ECONOMIC MARKET LOOK:
- YIELD CURVE: 1.38 from 1.37
- BONDS – neither US or German bonds seem to care about whatever yesterday was; closing > 1364 (TAIL support) matters for US stocks as much as closing below it would, but the 10yr dropping to 1.57% this morning (Yield Spread compresses to 133bps wide on 10s/2s) is bearish for the Financials (and growth); will be interesting to watch that Sector today.
MACRO DATA POINTS (Bloomberg Estimates):
- 7:45am/8:55am: ICSC/Redbook weekly retail sales
- 8:30am: Housing Starts, Oct., est. 840k (prior 872k)
- 8:30am: Building Permits, Oct., est. 864k (prior 894k, 890k)
- 9am: Fed’s Lacker speaks in New York
- 11:00am: Fed to purchase $1.75b-2.25b notes due 2/15/36-11/15/42
- 11:30am: U.S. Treasury to sell $40b 4-wk bills, $20b cash management bills
- 12:15pm: Fed’s Bernanke speaks in New York
- 4:30pm: API inventories
GOVERNMENT:
- House, Senate not in session
- Patent office Director David Kappos discusses tech innovation Center for American Progress. 10am.
- FERC Chairman Jon Wellinghoff outlines energy market rules at Bloomberg Government breakfast. 10am
- FCC Chair Julius Genachowski, IBM VP Daniel Prieto III speak at Council on Foreign Relations on intl telecom policy. 12:30pm
- Defense Secretary Leon Panetta speaks at Center for a New American Security in Washington. 6:45pm
WHAT TO WATCH
- France lost its top credit rating at Moody’s
- Housing starts probably posted best 2 mos. since 2008
- Best Buy founder Richard Schulze said to enlist 3 private-equity firms as he seeks to takeover chain
- Fed’s Bernanke to speak at Economic Club of New York
- Credit Suisse to reorganize its investment bank
- Samsung able to renew patent claims against Apple
- European finance ministers will try to plug a EU15b ($19b) hole in Greece’s finances, win over IMF
- Xstrata holders seen backing bid as Glencore votes in favor
- Spain sells EU4.94b bills vs maximum target EU4.5b
- Hostess, bakers union urged to accept mediation of strike
- Olam slumps after short-seller Muddy Waters’ Carson Block questions accounting methods
- JPMorgan named Marianne Lake to succeed CFO Doug Braunstein
- Bain Capital sued over acquisition by ex-software executive
- Stanford’s accountants convicted of hiding $7b fraud
EARNINGS:
- Tech Data (TECD) 6am, $1.35
- Trina Solar (TSL) 6:28am, $(0.65)
- Hormel Foods (HRL) 6:30am, $0.50
- American Woodmark (AMWD) 6:30am, $0.04
- Patterson (PDCO) 7am, $0.49
- HJ Heinz (HNZ) 7am, $0.88 Preview
- DSW (DSW) 7am, $0.89
- Jinko Solar (JKS) 7:03am, $(4.84)
- Medtronic (MDT) 7:15am, $0.88
- Chico’s FAS (CHS) 7:15am, $0.23
- Hewlett-Packard (HPQ) 7:30am, $1.14 Preview
- Campbell Soup (CPB) 7:30am, $0.85 Preview
- Signet Jewelers (SIG) 7:30am, $0.37
- Inergy LP (NRGY) 7:45am, $(0.05)
- Inergy Midstream (NRGM) 7:45am, $0.23
- George Weston (WN CN) 8am, C$1.40
- Best Buy (BBY) 8am, $0.12
- Barnes & Noble (BKS) 8:30am, $(0.01)
- Eaton Vance (EV) 8:40am, $0.48
- Valspar (VAL) 8:42am, $0.85
- Raven Industries (RAVN) 9am, $0.34
- Salesforce.com (CRM) 4:05pm, $0.32
- Zale (ZLC) 4:05pm, $(0.69)
- China Digital (STV) 5pm, NA
COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)
- Oil Drops From One-Month High Amid Speculation U.S. Supply Rose
- Soros Buying Gold as Record Prices Seen on Stimulus: Commodities
- Ex-Merrill Banker Starts Japan Hedge Fund Seeking 20% Return
- Codelco Said to Reduce Japan, Korea Copper Surcharge in 2013
- Gold Trades Near One-Week High on Europe, Middle East Concern
- Wheat Swings Between Gains and Losses on Impact of U.S. Drought
- Austrian Mint’s Gold Sales Through Bars, Coins Retreat in 2012
- Iron-Ore Exports From India Seen at 10-Year Low by Macquarie
- Cocoa Gains on Signs Demand Outstrips Supply; Coffee, Sugar Drop
- Oil Supplies Climb to Four-Month High in Survey: Energy Markets
- Xstrata Investors Seen Backing Glencore Takeover in Biggest Deal
- Italy Truffle Prices Rise on Russians, Drought: Chart of the Day
- VTB Turns Alchemist as Bond Ties Return to Gold: Russia Credit
- Olam Slumps After Muddy Waters’ Block Questions Accounts
CURRENCIES
EUROPEAN MARKETS
FRANCE – downgraded by Moodys which is just a preview of the pending US downgrade in 2013 if politicians don’t deliver said bacon; CAC40 -0.5% after European stocks melted up yest, but remains bearish TREND: German DAX TREND line of 7116 is one of the most important macro lines on our screen; Russia -20.2% since March remains in crash mode.
ASIAN MARKETS
CHINA – Shanghai Comp -0.4% re-testing YTD lows (-18.4% from the March #GrowthSlowing top) after meeting w/ Obama and Chinese leaders suggesting no more rate cuts in 2012; Foreign Direct Investment in China remains -3.5% y/y through OCT.
MIDDLE EAST
The Hedgeye Macro Team