THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – January 2, 2013


As we look at today's setup for the S&P 500, the range is 34 points or 0.50% downside to 1419 and 1.88% upside to 1453.        

SECTOR AND GLOBAL PERFORMANCE

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EQUITY SENTIMENT:


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CREDIT/ECONOMIC MARKET LOOK:

  • YIELD CURVE: 1.57 from 1.51
  • VIX closed at 18.02 1 day percent change of -20.69%
  • #GrowthStabilizing – it’s not uniformly obvious in the data yet that global growth is accelerating, but it’s definitely been stabilizing in our models now for over a month. British PMI for DEC climbs back above the 50 line to 51.4 (vs 49.1 NOV); Italy’s PMI stopped going down; India’s PMI for DEC 54.7 vs 53.7 NOV; higher highs in Asian and European stocks.
  • BONDS – the most important risk management signal on Friday was the 10yr UST yield holding our TREND line of 1.70% support; this morn yields rip to 1.82% and that’s good for a 10bps widening of the Yield Spread, which is plenty bullish for what’s been leading the US equity market higher (the Financials).

MACRO DATA POINTS (Bloomberg Estimates):

  • 7:45am/8:55am: ICSC/Redbook weekly retail sales
  • 8:58am: Markit US PMI Final, Dec., est. 53.6 (prior 52.8)
  • 10am: Construction Spend, M/m, Nov., est. 0.6% (prior 1.4%)
  • 10am: ISM Manufacturing, Dec., est. 50.4 (prior 49.5)
  • 10am: ISM Prices Paid, Dec., est. 50.8 (prior 52.5)
  • 11:30am: U.S. to sell 4-wk. bills
  • 1pm: U.S. to sell $32b 3-mo., $28b 6-mo. bills

GOVERNMENT:

    • Obama says he’ll sign fiscal cliff bill passed by Congress

WHAT TO WATCH

  • Obama says he’ll sign fiscal cliff deal passed by Congress
  • House passes budget bill, averts most tax increases
  • Manufacturing in U.S. probably expanded after 3-yr low
  • Samsung loses bid to seal sales data in U.S. Apple dispute
  • U.S. new-auto registrations to grow 6.6% in 2013, Polk estimates
  • KKR’s Energy Future bolsters unregulated unit
  • Faster Northeast trains require safety changes, Amtrak CEO says
  • Euro-Area December manufacturing shrinks more than estimated
  • Singapore growth beats ests. last quarter to avert recession
  • Grain exports along with crude seen mired as Mississippi shrinks

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • Oil Climbs to Three-Month High as U.S. House Passes Budget Bill
  • India Losing Iron Ore Market as Courts Shut Mines: Commodities
  • Gold Rallies to Two-Week High as U.S. House Passes Budget Bill
  • India Considers Higher Gold Taxes for Biggest Bullion-Buyers
  • Copper Advances in New York Following U.S. Budget Accord
  • Wheat Advances in Paris as U.S. Legislators Reach Budget Accord
  • Sugar Climbs in London on Economic Outlook; Coffee Also Advances
  • Copper May Extend Rally to $8,765 a Ton: Technical Analysis
  • Palm Oil Rallies as Heavy Rain in Malaysia May Disrupt Supplies
  • EU Power to Extend Slump in 2013 on Weak Demand: Energy Markets
  • Egypt Has Enough Wheat to Last 5 1/2 Months, GASC’s Nomani Says
  • RS Platou Sees Dry-Bulk Fleet’s Expansion Slowing to 7% in 2013
  • Shipping Loses as Faster Trade Means Record Fuel Costs: Freight
  • China Iron-Ore Imports Seen Rising on Lowest Stocks Since 2010

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CURRENCIES


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EUROPEAN MARKETS


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ASIAN MARKETS


KOSPI – We’re not going to give you a bearish #GrowthSlowing signal on the way down (KOSPI in March-July 2012) and not signal the other side of it on the way up – that wouldn’t be an objective process. The KOSPI is a leading indicator in our model and post this +1.7% move this morning shoots it to a higher-high vs the SEP highs #bullish.

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MIDDLE EAST


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The Hedgeye Macro Team