THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – December 18, 2012


As we look at today's setup for the S&P 500, the range is 17 points or 0.79% downside to 1419 and 0.39% upside to 1436.       

                                                                                                                                                        

SECTOR AND GLOBAL PERFORMANCE

 

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EQUITY SENTIMENT:


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CREDIT/ECONOMIC MARKET LOOK:

  • YIELD CURVE: 1.52 from 1.52
  • VIX closed at 16.34 1 day percent change of -3.88%
  • BONDS – our global growth model moved from #GrowthSlowing to #GrowthStabilizing in the last few weeks; that’s why I sold all our Fixed Income positions and even bought AAPL yesterday. UST 10yr yield shoots higher again this morn to 1.78%, comfortably above my TREND level of 1.69%; immediate term oversold on bonds = 1.80%; immediate-term TRADE overbought in US stocks = 1436 SP500.

MACRO DATA POINTS (Bloomberg Estimates):

  • 7:45am/8:55am: ICSC/Redbook weekly retail sales
  • 8:30am: Current Acct Bal, 3Q, est. -$103.0b (prior -$117.4b)
  • 10am: NAHB Housing Market Index, Dec., est 47 (prior 46)
  • 11am: Fed to purchase $1.5b-$2.25b notes in 2036-2042 sector
  • 11:30am: U.S. Treasury to sell 4-wk bills
  • 1pm: U.S. Treasury to sell $35b 5-yr notes
  • 2pm: Fed to sell $7b-$8b notes in 2015 sector
  • 4:30pm: API inventories

GOVERNMENT:

    • House, Senate in session
    • Hawaii Sen. Daniel Inouye dies at 88
    • Executives from NYSE, Euronext, NASDAQ, Credit Suisse testify at Senate Banking panel hearing on computerized trading
    • Commerce Dept. expected to announce final countervailing duties on wind-tower imports from China, Vietnam delegation led by Chinese Vice Premier Wang Qishan for talks
    • NRC staff meets officials from Southern California Edison on restart of San Onofre nuclear plant near San Diego, 1pm

WHAT TO WATCH

  • Obama tax concessions signal potential bipartisan budget deal with Boehner
  • Apple loses bid for sales ban on Samsung devices in U.S.
  • Cerberus to sell gunmaker Freedom stake after school massacre
  • U.S. retail gasoline hit lowest price in a yr on supply gain
  • AIG raises $6.45b as AIA shrs priced in top half of range
  • Wal-Mart probes Mexico license issue as NYT reports bribery
  • Amgen expected to plead guilty to federal charges, U.S. says
  • Morgan Stanley fined $5m by Massachusetts on Facebook IPO
  • Hedge fund managers convicted by jury of insider-trading scheme
  • Google’s Android in office fails to match wider mkt traction
  • China said to set growth target at 7.5% for 2nd yr
  • UBS Libor settlement, charges may be announced
  • Spain Oct. bad loans ratio 11.23% vs 10.71% in Sept.
  • U.K. Nov. inflation remains at 2.7% on utility costs, food prices

EARNINGS:

    • Sanderson Farms (SAFM) 6:30am, $0.32
    • FactSet Research (FDS) 7am, $1.23
    • Jefferies (JEF) 8am, $0.32
    • Oracle (ORCL) 4pm, $0.61
    • Heico (HEI) 4:10pm, $0.43

 

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • Gold Advances as U.S. Budget-Deal Optimism Spurs Commodities
  • Goldman Bullish With Hedge Funds Amid Citi Warning: Commodities
  • Oil Advances a Third Day After Progress on U.S. Budget Agreement
  • Swaps Diverge from Stock Analysts Seeing Rally in Ships: Freight
  • EU Rapeseed Growers Eye Output Gain as Germany Boosts Planting
  • Copper Falls in London Amid U.S. Budget Talks, Rising Stockpiles
  • Japan Seeks Least Milling Wheat in 11 Weeks From U.S., Canada
  • Palm Oil Drops as Falling Malaysian Exports Signal Weak Demand
  • Rebar Advances to Five-Month High as Lending in China to Climb
  • Essar May Stop Diesel Exports at Second-Largest Indian Plant
  • Polymetal Sees Platinum Attractive Amid South African Strikes
  • Sugar Production in India Climbs 2% to 4.9 Million Metric Tons
  • China to Start Agricultural Product Futures Price Index: Xinhua
  • China Tin Consumption, Output Seen Rebounding in 2013 by ITRI

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CURRENCIES


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EUROPEAN MARKETS


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ASIAN MARKETS


CHINA – day 2 of follow through in Chinese A-share buying after the +4.3% melt-up that got the Shanghai Comp back to bullish TREND (2096 is now support), but the Chinese data overnight is a reminder that there’s a big difference b/t #GrowthStabilizing (reality) and growth ripping (not happening), so just keep that in mind – Foreign Direct Investment (FDI) dropped -5.4% y/y in NOV in China.

 

SINGAPORE – the Straits Times Index (STI) didn’t make higher-highs on one of the more surprising fundamental bearish data points I have seen in weeks on the global economy – Singapore non-oil exports dropped -2.5% y/y in NOV (versus recovering +7.9% y/y in OCT). With everything Asia moving to immediate-term TRADE overbought, good spot to book some gains.

 

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MIDDLE EAST


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The Hedgeye Macro Team

 

 

 


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