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