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