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