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THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – January 3, 2013


As we look at today's setup for the S&P 500, the range is 45 points or 2.29% downside to 1429 and 0.79% upside to 1474.              

SECTOR AND GLOBAL PERFORMANCE

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EQUITY SENTIMENT:


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CREDIT/ECONOMIC MARKET LOOK:

  • YIELD CURVE: 1.58 from 1.58
  • VIX closed at 14.68 1 day percent change of -18.53%
  • ECONOMIC DATA – the 3 big engines for Global #GrowthStabilizing (China, Germany, USA) all better sequentially in the last 24hrs (US PMI 50.7 DEC vs 49.5 NOV, w/ a very good employment reading within that report of 52.7; German unemployment 6.9% was solid; and Chinese non-manufacturing PMI of 56.1 DEC vs 55.6 NOV hit a 4mth high).

MACRO DATA POINTS (Bloomberg Estimates):

  • 7am: MBA Mortgage Applications, week of Dec. 28
  • 7:30am: Challenger Job Cuts, Y/y, Dec., (prior 34.4%)
  • 8:00am: RBC Consumer Outlook, Jan. (prior 46.9)
  • 8:15am: ADP Employment Change, Dec., est. 140k (prior 118k)
  • 8:30am: Initial Jobless Claims, wk of Dec. 29, est. 360k (prior 350k)
  • 9:45am: Bloomberg Consumer Comfort, wk of Dec. 30 (prior -32.1)
  • 9:45am: ISM New York, Dec. (prior 52.5)
  • 10am: Freddie Mac mortgage rate survey
  • 2pm: Fed releases minutes from Dec. 11-12 FOMC meeting
  • 4:30pm: API weekly inventories
  • U.S. Treasury to announce 1Y, 3Y, 10Y, 30Y auction sizes

GOVERNMENT:

    • Congress convenes; almost 100 members will be sworn in to office for the first time
    • Centers for Medicare & Medicaid Services holds a conference call briefing on an announcement related to the Affordable Care Act, 1:30pm
    • American Bankers Association announces the release of the third quarter 2012 Consumer Credit Delinquency Bulletin, containing delinquency data for several consumer loan categories, 4pm

WHAT TO WATCH

  • Google said to be set to end FTC antitrust probe with agreement today
  • Boehner set to regain speakership as party base decries tax vote
  • Sandy aid will get vote this month following delay, Boehner says
  • Retailers may post slowest Dec. sales growth since 2008
  • Ford, GM, other automakers release December sales
  • Barnes & Noble releases holiday sales, Nook update
  • AMR asks bankruptcy judge to approve revised supplier contracts
  • China service industries expanded at fastest pace in 4 mos. in Dec.
  • Paulson & Co. named as defendant in amended ACA Goldman Sachs lawsuit
  • Al Gore’s Current TV is said to be sold for $500m to Al Jazeera
  • Rambus barred from enforcing 12 chip patents in Micron lawsuit
  • Amgen whistle-blower blocked from challenging Aranesp settlement
  • Safeway CEO Burd to retire after 20 yrs

     EARNINGS:

    • Family Dollar (FDO) 7am, $0.75
    • UniFirst (UNF) 8am, $1.33
    • Worthington Industries (WOR) 8:30am, $0.41
    • Progress Software (PRGS) 4:30pm, $0.34

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

GOLD – both bonds and gold do not like growth improving; that’s why both lagged yesterday and don’t look any better today (10yr 1.83% and Gold fails at $1690 TRADE line resistance); Gold snapping its long-term TAIL line again of $1671 is when you get paid there on the short side. A better employment rpt could easily do that.

  • Oil Drops From Highest in Three Months on Signs Gains Excessive
  • Dust Bowl Wilting U.S. Wheat as Funds Turn Bearish: Commodities
  • Gold Declines on U.S. Budget-Deal ‘Hangover’ as Dollar Rallies
  • Copper Advances on Prospects for an Economic Rebound in China
  • Soybeans Drop as Prospects Improve for South American Crops
  • Australia Swelters Amid Most Wide-Ranging Heatwave Since 2001
  • Gold Seen Sliding to $1,450 in 2013 on Investor Frustration
  • Natural Gas 4Q Price Gains Boost Producers, Challenge Suppliers
  • Coal’s Competitive Fuel Cost Advantage Over Gas Grows in 4Q
  • Chavez Cancer Imperils $7 Billion Caribbean Oil Funding: Energy
  • Rig Grounding Revives Debate Over Shell’s Arctic Oil Exploration
  • Asia Naphtha Crack Rebounds; Vitol Sells Gasoline: Oil Products
  • European Union Carbon-Dioxide Permits Decline to One-Month Low
  • Gold’s 12-Year Bull Market “Not Yet Dead,” Credit Suisse Says

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CURRENCIES


EURO – biggest relative opportunity on the long-side potentially here this morning w/ EUR/USD moving to immediate-term TRADE oversold at $1.31 (risk range = 1.31-1.33). At a bare minimum, if you are short it, you cover here – we might buy it (which is just one more bullish signal for global macro beta right now). Haven’t bought the Euro in a while.

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EUROPEAN MARKETS


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ASIAN MARKETS

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MIDDLE EAST


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The Hedgeye Macro Team