THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – December 5, 2012


As we look at today's setup for the S&P 500, the range is 15 points or 0.22% downside to 1404 and 0.85% 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 1.36

MACRO DATA POINTS (Bloomberg Estimates):

  • 7am: MBA Mortgage Applications, Nov. 30 (prior -0.9%)
  • 8:15am: ADP Employment Change, Nov. est. 125k (prior 158k)
  • 8:30am: Nonfarm Productivity, 3Q F est. 2.8% (prior 1.9%)
  • 10am: Factory Orders, Oct. est. 0.0% (prior 4.8%)
  • 10am: ISM Non-Manf. Composite, Nov. est. 53.5 (prior 54.2)
  • 10:30am: DoE inventories
  • 11am: Fed to buy $4.25b-$5.25b debt due 2/15/36-11/15/42

GOVERNMENT:

    • House, Senate in session
    • President Obama addresses Business Roundtable members
    • *Financial Research Advisory Committee, unit of Treasury’s
    • Office of Financial Research, holds inaugural meeting
    • FDA to release documents on Zogenix Inc.’s Zohydro, the first single-ingredient hydrocodone product. 8am

WHAT TO WATCH

  • Tesco poised to exit U.S. after starting Fresh & Easy review
  • Facebook to join Nasdaq 100, replacing Infosys, from Dec 12
  • Big Lots CEO Probed by SEC for Sale Before Share Decline: WSJ
  • Freeport planning 2 big acquisitions in oil & gas, FT says
  • Billionaire Green said to be in talks to sell 25% of Topshop
  • HSBC to sell $9.4b Ping An stake to Charoen Pokphand
  • Intersnack agrees to buy KP Snacks from United Biscuits
  • Senate passes $631b U.S. defense measure over veto threat
  • Pimco’s Gross recommends TIPS as yields on U.S. T-bills are lower than inflation
  • BlackRock’s Larry Fink says he won’t leave firm to take Treasury Dept. job
  • Wal-Mart being probed for breaking India FDI rules: Reuters
  • Wynn Macau changes timing for board to consider dividends
  • Boeing 787 Dreamliners must be inspected for fuel leaks: FAA
  • Repsol suing Chevron in N.Y. court over U.S. co.’s development of shale assets in Argentina

     EARNINGS:

    • Brown-Forman (BF/B) 7:00am, $0.78
    • Toro Co (TTC) 8:30am, $0.01
    • Laurentian Bank of Canada (LB CN) 8:40am, C$1.34
    • Finisar (FNSR) 4:00pm, $0.14
    • Francesca’s Holdings (FRAN) 4:01pm, $0.22
    • Ascena Retail Group (ASNA) 4:02pm, $0.35
    • Vera Bradley (VRA) 4:02pm, $0.38
    • Synopsys (SNPS) 4:05pm, $0.47
    • Verint Systems (VRNT) 4:05pm, $0.59
    • SAIC (SAI) 4:05pm, $0.34
    • Men’s Wearhouse (MW) 5:00pm, $0.97

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)


GOLD -  pain trade is down, not up – after seeing a +13% w/w ramp in spec long positions (futures/options net long contracts) last wk, Gold bulls were looking for Down Dollar to get them paid – didn’t happen on down USD yesterday, so the machines register that as something new, because it is; watching this TREND level of $1711 Gold very closely.

  • Oil Fluctuates on U.S. Inventory Increase, China Economy Boost
  • Steak Price Rising as Cattle Seen 20% Higher at JBS: Commodities
  • Bank of Korea Raises Gold Holding 20% Seeing Metal as Safe Asset
  • Standard Chartered Adds Commodity Traders on China’s Demand
  • Copper Reaches Six-Week High as China Backs Urban Development
  • Gold Rebounds From Four-Week Low as Weaker Dollar Spurs Demand
  • Cocoa Rises as Dry Weather May Hurt African Crops; Sugar Gains
  • Soybeans Advance to Three-Week High as Argentina Set for Storms
  • Rebar Gains on Speculation Chinese Policies to Stimulate Growth
  • Palm Oil Declines to Two-Month Low on Malaysian Supply Outlook
  • Water Wars Pit Thirsty Dakotas Against Barges for Missouri Flow
  • Funds’ $40 Billion Bet on Farmland Seen as a Fraction of Market
  • Former Soviet Union Has Greater Gasoline Potential Than Europe
  • Iron Ore Cargoes to China Fall 8.3% From Australia’s Main Port

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CURRENCIES


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EUROPEAN MARKETS


GERMANY – real tricky/sticky spot for the DAX here as its closing high for SEP was 7451 on 9/21; looking for hedge funds who are short either the Euro or European stocks to capitulate/cover around here on the Equities side and/or $1.31 Euro (which is the top end of our immediate-term $1.29-1.31 risk range).


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ASIAN MARKETS


CHINA – rip roaring fun in the Shanghai Comp last night, closing up huge (+2.87%) and, importantly, takes it out of crash mode for now (down -17.5% from the March global #GrowthSlowing top); immediate-term Risk Range = 1, and we’d need to see a close > 2038 to consider buying the A-shares (down food and oil helps there too).

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MIDDLE EAST


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The Hedgeye Macro Team