TODAY’S S&P 500 SET-UP – January 4, 2013
As we look at today's setup for the S&P 500, the range is 42 points or 1.88% downside to 1432 and 1.00% upside to 1474.
SECTOR AND GLOBAL PERFORMANCE
EQUITY SENTIMENT:
CREDIT/ECONOMIC MARKET LOOK:
- YIELD CURVE: 1.67 from 1.65
- VIX closed at 14.56 1 day percent change of -0.82%
- BONDS – massive 3wk move in Treasuries and now Bond Yields are in a Bullish Formation (bullish TRADE, TREND, TAIL) now that they took out my 1.85% TAIL risk line (1.96% last); no intermediate-term resistance in the 10yr to 2.4% and our asset allocation to Fixed Income remains 0%.
MACRO DATA POINTS (Bloomberg Estimates):
- 8:30am: Nonfarm Payrolls, Dec., est. 153k (prior 146k)
- 8:30am: Unemployment Rate, Dec., est. 7.7% (prior 7.7%)
- 10am: Factory Orders, Nov., est. 0.4% (prior 0.8%)
- 10am: ISM Non-Manf. Composite, Dec., est. 54.0 (prior 54.7)
- 10:30am: EIA natgas storage
- 11am: DoE weekly inventories
- 1pm: Baker Hughes U.S. rig count
- 1:15pm: Plosser speaks in San Diego on real business cycles
- 1:30pm: Lacker speaks in Baltimore on economic outlook
- 3:30pm: Yellen speaks in San Diego on systemic risk
- 5:30pm: Bullard speaks to economists in San Diego
GOVERNMENT:
- House, Senate meet to count electoral votes for president
- House to vote on $9.7b for national flood insurance program
- CFTC holds closed meeting on enforcement matters, 10am
WHAT TO WATCH
- Payrolls in U.S. probably held gains in Dec. as economy grew
- JPMorgan faces sanction for refusing to provide Madoff docs
- Abbott, J&J, Sanofi said to show interest in Bausch & Lomb bid
- Moody’s, S&P, Fitch must face fraud claims in Rhinebridge suit
- Cohen’s SAC fund tops most-profitable list amid insider probes
- Berkshire ex-executive Sokol won’t face SEC action, lawyer says
- Wal-Mart creates new role to oversee alternative format stores
- Facebook testing free calling on message app: L.A. Times
- Best Buy, Toys R Us say Wal-Mart misleading in ads: WSJ
- Euro-area manufacturing, services shrink more than estimated
- Euro-area Dec. consumer prices rise 2.2% in yr, est. 2.1%
- IBM insider case analyst agrees to U.S. return, court told
- ECB, China Trade, Chavez, Oscar Nominees: Wk Ahead Jan. 5-12
EARNINGS:
- Finish Line (FINL) 6:45am, $0.10
- Mosaic (MOS) 7am, $0.88, preview
COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)
GOLD – getting plastered this morning, down another -2% (Silver down -5%) as the world comes to realize that there are many unintended consequences associates w/ A) #GrowthStabilizing and B) Bernanke’s experiment in unemployment targeting; if this jobs picture continues to improve, we think Gold continues lower – oversold here today.
- Oil Declines for a Second Day as Fed Discusses Curbing Stimulus
- Gold Seen Rallying From Worst Streak in Eight Years: Commodities
- Copper Declines Most in Two Weeks as Fed Signals Stimulus End
- Soybeans Rebound on Speculation Demand May Rise Following Slump
- Gold Set for Worst Run Since 2004 as Fed Sees End to Purchases
- Sugar Falls to Two-Week Low on Surplus; Coffee and Cocoa Slide
- SHFE Metal Stockpiles Expand as Copper Rises to Eight-Month High
- West African Cocoa Premiums Said to Drop on Better Crop Outlook
- Palm Oil Advances as Malaysian Shipments May Gain on Tax Revamp
- Uranium Rebound Seen as Japan Considers Nuclear: Energy Markets
- Mississippi Seen Navigable Through Jan. 26 After Rock Removal
- Oil May Increase as Economic Growth Spurs Demand, Survey Shows
- Gold May Drop to $1,600 on Moving Averages: Technical Analysis
- Rebar Advances to Five-Month High as Demand Increases in China
CURRENCIES
EUROPEAN MARKETS
ASIAN MARKETS
JAPAN – in what might be the end of Keynesian policy “experimentation” gone gnarly, the Japanese are literally torching their currency at this pt (Yen down another -1.1% this morn) and the Nikkei is going Weimar style republic (+25.2% since mid OCT!); all the while, Japanese economic growth is one of the few majors in the world still slowing – this should end well.
MIDDLE EAST
The Hedgeye Macro Team
