TODAY’S S&P 500 SET-UP – January 7, 2013
As we look at today's setup for the S&P 500, the range is 43 points or 2.21% downside to 1434 and 0.72% upside to 1477.
SECTOR AND GLOBAL PERFORMANCE
EQUITY SENTIMENT:
CREDIT/ECONOMIC MARKET LOOK:
- YIELD CURVE: 1.63 from 1.64
- VIX closed at 13.83 1 day percent change of -5.01%
- BONDS – if Treasury yields backed off for real (below our TAIL risk line of 1.84%), we’d stop harping on this – but that’s not happening this morning; for the 1st time in a year fund flows are marginally tilting away from fixed income towards equities – maybe that’s a sign of a short-term equity market top; maybe it means we’ll keep making higher-highs; we don’t know – but its new.
MACRO DATA POINTS (Bloomberg Estimates):
- 11am: Fed to purchase $1.25b-$1.75b in 2036-2042 sector
- 11:30am: U.S. to sell $32b 3M, $28b 6M bills
- U.S. Rates Weekly Agenda
GOVERNMENT:
- ITC to announce final decision in patent-infringement case by Vitec unit over television, movie-studio lighting, 5pm
WHAT TO WATCH
- Banks win watered-down liquidity rule after Basel Grp deal
- Celgene, Onyx, others to give updates at JPMorgan conf.
- Citigroup said to seek stock buybacks in capital plan: WSJ
- Sikorsky poised to win $6.8b U.S. helicoper contract
- Hulu CEO Jason Kilar says he plans to leave co. by April
- Google patent offers probably won’t end Microsoft, Apple suits
- Nvidia unveils Tegra 4 mobile processor to spur smartphone push
- Cerberus plans to sell most of Aozora stake valued at $1.7b
- Flowers Foods, Bimbo said bidding for Hostess Brands: WSJ
- Terra Firma to sell Odeon theater chain: FT
- Sony, BMG to bid for Parlophone, other EMI labels: FT
- Deal in foreclosure case may come as early as today: NYT
- US Air pilot leaders back interim labor deal on AMR merger
- “Texas Chainsaw” in #1 at wknd box office, “Django” #2
- U.S. Weekly Agendas: Finance, Industrials, Energy, Health, Consumer, Tech, Media/Ent, Real Estate, Transports
- Canada Weekly Agendas: Energy, Mining
- ECB, China Trade, Chavez, Oscar Noms: Week Ahead Jan. 5-12
EARNINGS:
- Commercial Metals (CMC) 8am, $0.17
- Team (TISI) 4:01pm, $0.60
COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)
GOLD – they tried to bounce it into Friday’s close, then again this morning – failed at both our TRADE and TREND lines of resistance; watching that TAIL line of $1671 closely as the downside gap opens up in our model (ie lower intermediate-term lows are signaling as probable).
- Oil Declines a Third Day; Morgan Stanley Sees Supply Recovery
- Bulls Add to Wagers for First Time Since November: Commodities
- LBMA’s Best Gold Forecaster Hochreiter Says Bull Market Is Over
- Gold Swings Between Gains and Drops in London on Stronger Dollar
- Copper Falls as Report May Show Weaker German Factory Orders
- Asia Naphtha Crack Rebounds; BP Sells Gasoil, Fuel: Oil Products
- Sugar, Coffee Gain in New York on Index Rebalancing; Cocoa Rises
- Hedge Funds Raise Brent Crude Net-Longs to Nine-Month High
- U.K. Natural Gas Jumps Most Since August as Statoil Cuts Output
- Shell Leads S. Africa on Record Oil Rush as Coal Falters: Energy
- Iron Ore-Import Wave Seen by Morgan Stanley Boosting Shipping
- European Oil Demand Outside CIS Declines Along With Production
- U.S. Corn, Soy Reserves on Dec. 1 Seen Dropping to Nine-Year Low
- Corn Climbs From Six-Month Low as Rains Threaten Argentine Crop
CURRENCIES
EUROPEAN MARKETS
ASIAN MARKETS
TAIWAN – never mind growth stabilizing, Taiwanese export growth just accelerated, big time, from 0.9% NOV to +9.0% in DEC on Chinese demand; mostly every Asian market (equities, bonds, FX) is signaling the same thing that it has for a month; growth isn’t slowing anymore – couldn’t have said that 6 months ago.
MIDDLE EAST
The Hedgeye Macro Team