THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – January 11, 2013


As we look at today's setup for the S&P 500, the range is 42 points or 1.37% downside to 1452 and 1.49% upside to 1494.    

                                                                                                                           

SECTOR AND GLOBAL PERFORMANCE

 

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EQUITY SENTIMENT:


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CREDIT/ECONOMIC MARKET LOOK:

  • YIELD CURVE: 1.64 from 1.65
  • VIX closed at 13.49 1 day percent change of -2.32%

MACRO DATA POINTS (Bloomberg Estimates):

  • 8:30am: Import price index, Dec., M/m est. 0.1% (prior -0.9%)
  • 8:30am: Trade balance, Nov., est. -$41.3b (prior -$42.2b)
  • 9:30am: Fed’s Plosser speaks on economic outlook in N.J.
  • 11am: Fed to buy $4.75b-$5.75b in 2017-2018 sector
  • 12pm: Jan. WASDE report
  • 1pm: Monthly budget statement, Dec., est. -$1b (prior -$86b)

GOVERNMENT:

    • House, Senate not in session
    • Deadline for FERC to respond to Deutsche Bank’s rejection of $1.6m in penalties
    • CFTC holds closed meeting on enforcement matters, 10am
    • Medicare Payment Advisory Commission meets on long-term care hospital services, competition in Part D, 8:30am
    • ITC Judge Thomas Pender may release findings in patent-infringement case by Dover unit against Analog Devices over microphones in digital devices

WHAT TO WATCH

  • Best Buy possible holiday sales drop may hurt Schulze buyout bid
  • Trade gap in U.S. probably narrowed as fuel costs declined
  • China’s inflation accelerates as chill boosts food prices
  • Japan’s Abe unveils $116b stimulus package to boost growth
  • American Express to cut 5,400 jobs, take $287m charge
  • Boeing Dreamliner system said to be focus of FAA inquiry
  • Cyprus facing world’s biggest bank bailout as Moody’s cuts 3 steps
  • U.S. mortgage overhaul under way with borrower scrutiny measure
  • Apple CEO Cook says China will overtake U.S. as biggest mkt
  • Bats blaming market rules for mishaps as calls for overhaul grow
  • Kocherlakota says Fed policy not easy enough with low inflation
  • Citigroup joins Goldman in starting electronic bond-trade system
  • Slim’s Sanborns said to seek $1b in share offer
  • Li & Fung sees 2012 operating profit down 40% on U.S. costs
  • Ex-hedge-fund manager Hochfeld pleads guilty to securities fraud
  • Number of Euribor maturities must be halved, EU regulators say
  • MF Global creditors file liquidation plan following settlements
  • Ford plans 2,200 salaried hires in biggest increase since 2001
  • U.S. Retail Sales, China GDP, Goldman: Wk Ahead Jan. 12-19

EARNINGS:

    • Wells Fargo (WFC) 8am, $0.90 - Preview

 

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

 

COMMODITIES – CRB Commodities Index has reflexive components (Oil and Copper don’t like the China down move because commodity bulls still think long commodity inflation is a demand story – we think it’s a money and physical commodity supply one); Copper down -0.8% here and Gold just failed at $1678 resistance again; we re-shorted Gold on green yest.

  • Brent Oil Set for First Weekly Drop in Three on China Inflation
  • Wheat Trade More Bullish Even as Bear Market Begins: Commodities
  • Copper Falls as Inflation Fuels Concern China May Curb Stimulus
  • Gold Falls as Strengthening Dollar Encourages Investors to Sell
  • Soybeans Slide a Fourth Day as Report Might Ease Supply Concern
  • Indonesia May Cut Palm Oil Tax to Zero to Counter Malaysia
  • Iron Ore at 15-Month High Deters Restocking at China Mills
  • Texas Energy Boom Fuels Best Performance Since ’09: Muni Credit
  • Thai Sugar Output Seen by Macquarie 12% Down on Dry Weather
  • Morgan Stanley Names Tan Head of Asia Commodities in Singapore
  • U.S. LNG Profit Seen Elusive as Price Gap Closes: Energy Markets
  • China May Increase Gold Holdings in Reserves, Researcher Says
  • Chavez’s Food Shortages Bigger Worry Than Venezuela Constitution
  • Rebar Tumbles Most Since November as China’s Inflation Quickens

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CURRENCIES


FX – USD looks to keep making a series of long-term higher-lows as Commodities (CRB Index) makes a series of long-term lower-highs. The Yen, meanwhile, is a flaming ball of fire (Japan introduced a 10.3 TRILLION Yen Keynesian “stimulus” spending package overnight – that’s about $116B in USD, but who is counting anymore).

 

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EUROPEAN MARKETS

 

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ASIAN MARKETS


CHINA – on the #growthstabilizing side they delivered a big Export print for DEC at +14.1% y/y (vs +2.9% last mth), but on the CPI front the number they made up didn’t deflate enough to keep the Shanghai Comp going higher (-1.8% overnight).

 

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MIDDLE EAST


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The Hedgeye Macro Team