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TODAY’S S&P 500 SET-UP – December 20, 2012


As we look at today's setup for the S&P 500, the range is 21 points or 0.68% downside to 1426 and 0.78% upside to 1447.        

SECTOR AND GLOBAL PERFORMANCE

THE HEDGEYE DAILY OUTLOOK - 1

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EQUITY SENTIMENT:


THE HEDGEYE DAILY OUTLOOK - 10


CREDIT/ECONOMIC MARKET LOOK:

  • YIELD CURVE: 1.51 from 1.53
  • VIX closed at 17.36 1 day percent change of 11.50%

MACRO DATA POINTS (Bloomberg Estimates):

  • 8:30am: 3Q GDP, est. 2.8% (prior 2.7%)
  • 8:30am: Personal Consumption, 3Q, est. 1.4% (prior 1.4%)
  • 8:30am: Core PCE, 3Q, est. 1.1% (prior 1.1%)
  • 8:30am: Init. Jobless Claims, Dec. 15, est. 360k (prior 343k)
  • 8:30am: Cont. Claims, Dec. 8, est. 3.200m (prior 3.198m)
  • 9:45am: Bloomberg Consumer Comfort, Dec. 16 (prior -34.5)
  • 9:45am: Bloomberg Economic Expectations, Dec. (prior 4)
  • 10am: Freddie Mac mortgage rates
  • 10am: Philadelphia Fed., Dec., -3.0 (prior -10.7)
  • 10am: Existing Home Sales, Nov., est. 4.90m (prior 4.79m)
  • 10am: Leading Indicators, Nov., est -0.2% (prior 0.2%)
  • 10am: House Price Index, Oct., est. 0.3% (prior 0.2%)
  • 10:30am: EIA natural gas storage change
  • 11am: Fed to purchase $1.5b-$2.25b notes in 2023-2031 sector
  • 1pm: U.S. Treasury to sell $14b 5Y TIPS in reopening
  • 2pm: Fed to sell $7b-$8b notes in 2015-2016 sector

GOVERNMENT:

    • Washington Day Ahead
    • House, Senate in session
    • Senate Banking panel holds hearing on rebuilding after Hurricane Sandy, 11am
    • House Intelligence hold closed meeting to consider national security issues posed by Chinese telecommunications companies Huawei, ZTE, 9am
    • SEC holds closed meeting on enforcement matters, 2pm
    • FERC holds monthly meeting on power-grid reliability, 10am

WHAT TO WATCH

  • IntercontinentalExchange said in talks to buy NYSE Euronext
  • Budget talks deteriorate amid Republican identity shift on taxes
  • AMR said to take steps moving closer to merger with US Airways
  • BofA’s Moynihan said to kill proposal to cut payouts for brokers
  • Google to sell Motorola Home to Arris for $2.35b
  • 3 former Swiss bank advisers charged by U.S. with conspiracy
  • U.S. housing values rose 6% in 2012 for 1st gain in 6 yrs: Zillow
  • Bank of Japan expanded its asset-purchase program for 3rd time in 4 mos.
  • U.K. Nov. retail sales unchanged, median est. 0.4% increase
  • Roche may agree to buy Illumina for $66/shr, L’Agefi says
  • Carl Icahn’s American Railcar sweetened its offer for Greenbrier by 10%, set a deadline of tomorrow
  • Allscripts replaced CEO, said no longer planning to sell itself
  • Pershing’s Ackman to speak at Ira Sohn special event on Herbalife
  • Accenture falls after longer consulting projects crimp rev.

EARNINGS:

    • Darden Restaurants (DRI) 7am, $0.30
    • ConAgra Foods (CAG) 7:30am, $0.55
    • CarMax (KMX) 7:35am, $0.39
    • KB Home (KBH) 8am, $0.06 - Preview
    • Discover Financial Services (DFS) 8:30am, $1.13 - Preview
    • Neogen (NEOG) 8:45am, $0.27
    • Carnival (CCL) 9:15am, $0.11
    • Micron Technology (MU) 4pm, $(0.20)
    • Red Hat (RHT) 4:04pm, $0.29
    • Tibco Software (TIBX) 4:04pm, $0.37
    • Research In Motion (RIM CN) 4:05pm, $(0.35) - Preview
    • Nike (NKE) 4:15pm, $1.00
    • Cintas (CTAS) 4:15pm, $0.62

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

OIL – we re-shorted Oil yesterday as it tested immediate-term TRADE resistance of $110.02 Brent; it’s a long way down from here for Oil, especially if the USD holds higher long-term lows here – Down Oil is the bull case for Long Consumer Stocks (we bought back XLP, Consumer Staples) on red yesterday.

  • Brent Crude Trades Near Two-Week High as North Sea Exports Drop
  • Silver Vaults Stuffed Means Price Rising 30% in ’13: Commodities
  • Copper Declines for a Fourth Day in New York on U.S. Budget
  • Gold Climbs in New York After Two Days of Declines; Silver Gains
  • Coal Rebound Seen From Biggest Drop Since 2005: Energy Markets
  • Ethanol Fuel Blend Wall Can Be Eased With Higher Blends, Exports
  • Palm to Test 1,950 Ringgit in Bearish Trend: Technical Analysis
  • Rubber Declines From Seven-Month High on U.S. Budget Concerns
  • Vale Seen Paying $158 Million More for Shipping by Alphabulk
  • Wheat Drops Below $8 a Bushel for the First Time in Five Months
  • Uralkali Sees 2013 Potash Supplies Recovering to 55 Million Tons
  • India Sugar Imports Seen Surging as Global Glut Cuts Prices
  • Chaebol Founder Dismantles Life’s Work as Slump Deepens: Freight
  • Lumber Is Top Pick by Scotiabank Leading 2013 Commodities Rally

THE HEDGEYE DAILY OUTLOOK - 5

CURRENCIES


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EUROPEAN MARKETS


ITALY – Italian Retail Sales -3.8% y/y in OCT vs -1.6% SEP continued to worsen and the MIB Index looks very different than the DAX now (DAX making higher-highs vs SEP, MIB making lower-highs); we haven’t been short anything Europe for a while, but Italian stocks looking more interesting now, short side. Timing matters.


THE HEDGEYE DAILY OUTLOOK - 7

 

ASIAN MARKETS


JAPAN – hello my old friend volatility! The Japanese are pulling a Bernanke here and getting the same results (inflated stock market and no economic recovery); Japanese Exports down -4.1% y/y in NOV is a certified economic disaster and they just upped their asset purchase fund to 76 TRILLION Yens (from 66T) and the market didn’t think that was enough!

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MIDDLE EAST


THE HEDGEYE DAILY OUTLOOK - 9

The Hedgeye Macro Team