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
EQUITY SENTIMENT:
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
CURRENCIES
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.
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.
MIDDLE EAST
The Hedgeye Macro Team
