THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – November 28, 2012


As we look at today's setup for the S&P 500, the range is 36 points or 1.14% downside to 1383 and 1.43% upside to 1419.        

                                                                                                                                                                       

SECTOR AND GLOBAL PERFORMANCE

 

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EQUITY SENTIMENT:


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CREDIT/ECONOMIC MARKET LOOK:

  • YIELD CURVE: 1.35 from 1.38
  • BONDS – you can love to hate them on “valuation”, or just buy them on dips and smile into yr end; UST 10yr yield makes another lower-high last wk, dropping to 1.62% (from 1.69% at the start of the wk); no support to 1.55%.

MACRO DATA POINTS (Bloomberg Estimates):

  • 7am: MBA Mortgage Applications, Nov. 23 (prior -2.2%)
  • 10am: New Home Sales, Oct. est. 390k (prior 389k)
  • 10:30am: DoE inventories
  • 11am: Fed to buy $1.75b-$2.25b notes due 2/15/36-11/15/42
  • 12:15pm: Fed’s Tarullo speaks in New Haven
  • 1pm: U.S. to sell $35b 5Y notes
  • 2pm: Fed’s Beige Book Economic Survey

GOVERNMENT:

    • House, Senate in session
    • President Barack Obama, House Speaker John Boehner hold meetings with Goldman Sachs CEO Lloyd Blankfein, other business leaders to discuss fiscal cliff
    • Pandora CEO Joseph Kennedy to testify at music-licensing hearing by House subcommittee
    • U.S. will auction ~3.8k blocks covering about 20.5m acres off Texas coast in western Gulf of Mexico, first sale of oil, gas exploration leases under Obama administration’s five-year plan for developing Outer Continental Shelf
    • Ex-BP Plc vice president, two former well-site supervisors arraigned on criminal charges for actions after 2010 oil spill
    • Treasury holds meeting of President’s Advisory Council on Financial Capability, with Undersecretary for Domestic Finance Mary Miller, 8am
    • House Energy and Commerce panel holds hearing on waste, fraud and abuse in Medicare, 10am

WHAT TO WATCH

  • Fed said to weigh forcing foreign banks to boost capital in U.S.
  • Goldman’s Blankfein among 13 CEOs meeting with Obama today
  • Groupon board said to consider CEO change amid growth slowdown
  • Costco to pay out $3b with $7/shr special cash div.
  • Smith & Nephew buys assets of Healthpoint Bio for $782m cash
  • Google said to oppose consent decree in any FTC antitrust deal
  • Samsung says IPhone relies on patented technology in U.K. trial
  • BP seen paying billions more in oil spill claims after deal
  • Hewlett-Packard’s war of words escalates with Autonomy’s founder
  • Tobacco companies must admit lying on products, U.S. judge rules
  • Obama urged to declare emergency as Mississippi water levels ebb
  • Fiscal-cliff pressure is on for cuts to entitlement programs

EARNINGS:

    • Fresh Market (TFM) 6am, $0.26
    • Jos A Bank Clothiers (JOSB) 6am, $0.56
    • Yingli Green (YGE) 6:07am, $(0.61)
    • CGI Group (GIB/A CN) 6:30am, C$0.42
    • JA Solar (JASO) 6:33am, $(0.21)
    • Express (EXPR) 7am, $0.17
    • Suburban Propane Partners (SPH) 7:30am, $(0.91)
    • ANN (ANN) 8am, $0.74
    • American Eagle Outfitters (AEO) 8am, $0.39
    • Golar LNG Partners (GMLP) 8:30am, $0.56
    • TiVo (TIVO) 4pm, $(0.24)
    • Aeropostale (ARO) 4:01pm, $0.29
    • Guess? (GES) 4:03pm, $0.44
    • Semtech (SMTC) 4:30pm, $0.43
    • Pall (PLL) 5pm, $0.66
    • Workday (WDAY) Aft-mkt, $(0.49)
    • Post Holdings (POST) Aft-mkt, $0.35

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • Oil Trades Near One-Week Low on Supply Gain, U.S. Budget Concern
  • DuPont Sends in Former Cops to Enforce Seed Patents: Commodities
  • Gold Declines for a Third Day in London on Improving U.S. Data
  • Olam Says No Insolvency Risk as It Rebuts Muddy Waters Claims
  • Copper Declines on Concern About Progress of Fiscal-Cliff Talks
  • U.S. May Double Soybean Exports to Russia After Obama Signs Law
  • Soybeans Drop From Two-Week High as South American Concern Eases
  • Sugar Falls as Harvesting Progresses in Brazil; Cocoa Declines
  • Copper Demand in China to Improve Next Year, Aurubis Says
  • India Iron Ore Dilemma May Reshape Seaborne Market: Outlook
  • Coal Heads for Best Quarter Since 2010 on Cold: Energy Markets
  • Larger Gold Miners Outperform Metal; Smaller Rivals Trail
  • Copper Faces Resistance in London at $7,865: Technical Analysis
  • Iranian Tanker Leaving Greek Island After Cargo Investigation

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CURRENCIES


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EUROPEAN MARKET


RUSSIA – the RTSI is beating the Chinese to the crash table this morning, down -1.2%, breaking the -20% barrier again for the 2nd time since September; Oil (Brent) failed at our long-term TAIL line of $111.48 resistance and there’s a commodity bubble unwinding.


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ASIAN MARKETS


CHINA – moves to within a hair of crash mode overnight (Shanghai Comp down another -0.9% to 1973 = -19.9% from its March #GrowthSlowing top); remember our baseline 3-factor model on global growth: China/Copper/BondYields.

 

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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

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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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