THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – December 12, 2012


As we look at today's setup for the S&P 500, the range is 13 points or 0.62% downside to 1419 and 0.29% upside to 1432.       

                                                                                                                                                        

SECTOR AND GLOBAL PERFORMANCE

 

THE HEDGEYE DAILY OUTLOOK - 1

 

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EQUITY SENTIMENT:


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CREDIT/ECONOMIC MARKET LOOK:

  • YIELD CURVE: 1.42 from 1.42
  • VIX closed at 15.57 1 day percent change of -2.99%
  • TREASURIES – finally bonds sold off yesterday (primarily because they were immediate-term TRADE overbought); 1.68% is an important line of resistance for the 10yr yield (inasmuch as 1.58% was support), so we’ll see where risk moves vs that today – risk ranges remain very tight and trade-able in stocks and bonds.

MACRO DATA POINTS (Bloomberg Estimates):

  • 7am: MBA Mortgage Applications, Dec. 7 (prior 4.5%)
  • 8:30am: Import Price Index M/m, Nov. est. -0.5% (prior 0.5%)
  • 10:30am: DoE inventories
  • 11:30am: U.S. Treasury to sell $21b 10Y notes in reopening
  • 12:30pm: FOMC Rate Decision
  • 2pm: Monthly Budget Stmt, Nov., est. -$171b (prior -$137.3b)
  • 2:15pm: Bernanke holds news conference in Washington

GOVERNMENT:

    • House, Senate in session
    • Boeing Co.’s Jay McNerney announces Business Roundtable CEO economic outlook survey results on conference call, 11am
    • OPEC oil ministers meet in Vienna on production targets
    • House Financial Services panel holds a hearing on market implications of Dodd-Frank Act derivatives measures, 10am
    • FCC Chairman Julius Genachowski testifies on airwaves auctions before House Energy and Commerce panel, 10am
    • FCC votes on Dish Network plan to offer mobile phone service using airwaves it acquired last year, 1pm

WHAT TO WATCH

  • Greece meets goal in debt buyback as nations seeks to unlock aid
  • U.S. probe of SAC’s trading said to be linked to 2010 SEC case
  • U.K. unemployment falls in sign of labor-market resilience
  • JPMorgan pressed by SEC on prop trading before London whale loss
  • SEC chief’s exit may stall Dodd-Frank rules including Volcker
  • Costco 1Q adj. EPS beats estimates, revenue in-line
  • Google said to be close to settlement with FTC over patents case
  • Goldman says its job in Dragon sale didn’t include due diligence
  • HSBC Mexico branches said by U.S. to be drug trafficker favorite
  • Williams bets $2.4b on pipeline venture that Chesapeake quit
  • Avon to cut about 1,500 positions as part of cost savings
  • Molycorp CEO Smith exits six months after buying Neo Material
  • Warburg said to hire Goldman to seek Bausch & Lomb sale
  • Teva’s Levin vows focused drug development as patents expire
  • Dish smartphone service approved by U.S. FCC in unanimous vote
  • Inditex profit gains on emerging-market sales, online growth
  • U.S. economic optimism highest in 3yrs: Bloomberg National Poll
  • OPEC oil ministers meet in Vienna on production targets
  • 3M to provide 2013 forecast; conference call at 9:30am
  • SolarCity said to delay IPO for day

EARNINGS:

    • Joy Global (JOY) 6am, $1.91 - Preview
    • Restoration Hardware (RH) After-mkt, $0.03

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • Crude Futures Advance as IEA Boosts Demand Forecast, OPEC Meets
  • Gold CEOs Told to Fix Slump With Investors Restless: Commodities
  • London’s Dominance in Shipping Seen Threatened by EU Regulation
  • OPEC Uniting to Keep Quota Steady as Oil Heads for Best Year
  • Copper Rises on Expectations Fed Will Move to Stoke U.S. Growth
  • Gold Trades Near One-Week High in London on Stimulus Speculation
  • Coffee Rises in London as Vietnamese Sales Slow; Sugar Declines
  • U.K. Natural Gas Demand Rises to 10-Month High; System Tightens
  • Coffee Farmers in Vietnam Curb Sales After Fast Harvest Progress
  • Refining Rebound Seen in Asia on Reliance Halt: Energy Markets
  • Italian Grain Imports Drop as Wheat and Corn Purchases Decline
  • Rebar Climbs to Seven-Week High as China Boosts Economic Growth
  • New Pipeline Could Raise Turkmen Exports to Iran: Outlook
  • IEA Boosts Global Oil Demand Forecasts on China Economic Rebound

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CURRENCIES


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EUROPEAN MARKETS


GERMANY – power forward move by the Germans continues, well above the SEP closing highs (7451) to 7611, pulverizing the Dow at +30% YTD. German stocks are up +9.5% since mid November! Someone was either short Europe in size (we have no European short positions currently) or they’re just jamming this thing into yr end. Higher-highs are bullish, regardless.


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ASIAN MARKETS


JAPAN – before you get too excited about the no volume breakouts, remember that stock markets aren’t economies right now; Japan is a disaster (down -3.5% SAAR GDP and -6.5% y/y Export declines), but the Bernanke move of devaluing the Yen (new lows today) is something the machines have been trained to love via long stocks, for a trade – ends really badly, but no one cares.

 

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MIDDLE EAST


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The Hedgeye Macro Team

 

 

 


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