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