TODAY’S S&P 500 SET-UP – January 16, 2013
As we look at today's setup for the S&P 500, the range is 12 points or 0.50% downside to 1465 and 0.32% upside to 1477.
SECTOR AND GLOBAL PERFORMANCE
EQUITY SENTIMENT:
CREDIT/ECONOMIC MARKET LOOK:
- YIELD CURVE: 1.56 from 1.49
- VIX closed at 13.55 1 day percent change of 0.22%
- BONDS – the 10yr UST yield is bullish TRADE/TREND (1.71-1.81% support) and bearish TAIL (1.84% resistance) right now, which is perfectly confusing the market, as it should – any time we start to whip above/below the big duration lines, people get confused. We say you stay w/ the TREND = buy stocks on red, short t-bonds on green.
MACRO DATA POINTS (Bloomberg Estimates):
- 7:00am: MBA Mortgage Applications, Jan. 11 (prior 11.7%)
- 8:30am: CPI, M/m, Dec., est. 0.0% (prior -0.3%)
- 8:30am: CPI Ex Food/Energy, M/m, Dec., est. 0.2%
- 9am: Net TIC Flows, Nov. (prior -$56.7b)
- 9am: Net L-T TIC Flows, Nov., est. $25.3b (prior $1.3b)
- 9:15am: Industrial Production, Dec., est. 0.3% (prior 1.1%)
- 9:15am: Capacity Utilization, Dec., est. 78.5% (prior 78.4%)
- 10am: NAHB Housing Market Index, Jan., est. 48 (prior 47)
- 10am: Fed’s Kocherlakota speaks in Eden Prairie, Minn.
- 10:30am: DoE inventories
- 11am: Fed to purchase $1.25b-$1.75b in 2036-2042 sector
- 2pm: Fed issues Beige Book business survey
- 7pm: Fed’s Fisher speaks in Washington
- 8pm: Fed’s Kocherlakota speaks in Minneapolis on policy
GOVERNMENT:
- Senate not in session, House in session
- SEC Commissioner Dan Gallagher gives 2013 outlook for agency
- President Obama to unveil proposals to curb gun violence
WHAT TO WATCH
- All Nippon Airways, Japan Airlines grounded entire fleet of Boeing Dreamliners; will cancel all Dreamliner ops tomorrow
- India regulator to check 6 Dreamliners in Air India’s fleet
- World Bank cuts 2013 global growth forecast to 2.4%
- AB InBev said in talks w/ U.S. on concessions for Modelo
- Ford CFO forecasts greater than $1.5b European loss in 2013
- Alibaba said to hire Credit Suisse, Goldman for $3b-$4b IPO
- Apple introduced installment payment plans in China
- Temasek, CPPIB may invest in Dell alongside Silver Lake: FT
- Temasek spokesman declines to comment on report
- TUI Travel in talks with Airbus, Boeing on potential $6b plane order: Reuters
- European Dec. car sales fell 16%, demand at Ford, GM, Renault
- Wausau Paper continuing talks w/ Starboard after co. declined offer to sign non-disclosure
EARNINGS:
- Bank of New York Mellon (BK) 6:30am, $0.53
- Comerica (CMA) 6:40am, $0.65
- US Bancorp (USB) 6:45am, $0.75
- First Republic Bank/CA (FRC) 7am, $0.73
- JPMorgan Chase (JPM) 7am, $1.22 - Preview
- Northern Trust (NTRS) 7:14am, $0.75
- Goldman Sachs (GS) 7:30am, $3.66 - Preview
- M&T Bank (MTB) 8:01am, $2.17
- Charles Schwab (SCHW) 8:45am, $0.15
- Kinder Morgan Energy Partners (KMP) 4:05pm, $0.63
- Kinder Morgan (KMI) 4:05pm, $0.35
- El Paso Pipeline (EPB) 4:07pm, $0.55
- eBay (EBAY) 4:15pm, $0.69
- SLM (SLM) 4:15pm, $0.53
- Clarcor (CLC) 5:21pm, $0.70
- HB Fuller Co (FUL) 5:49pm, $0.56
- Bank of the Ozarks (OZRK) 6pm, $0.56
- CVB Financial (CVBF) 6:45pm, $0.22
COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)
OIL – what we didn’t like about commodity reflation 24hrs ago, we like this morning – Oil, Gold, Copper all stopped going up again at lower-highs (Dollar Up), which is a bullish global #GrowthStabilizing signal. Brent’s TAIL risk line of $111.48 is what matters most.
- Oil Trades Near One-Week Low as U.S. Crude Inventories Increase
- Carrara Marble Peaks as Russians Follow Etruscans: Commodities
- Bundesbank to Repatriate 674 Tons of Gold to Germany by 2020
- Wheat Rises to Three-Week High as Dry Weather Threatens Crops
- OPEC Cuts Oil Output to 14-Month Low Amid Economic Uncertainty
- Copper Declines for Fourth Day Before U.S. Production Figures
- NWR Selling Eurobonds as Yield on Coal Producer’s Debt Hits Low
- Cocoa Slides on Demand as Crop Outlook Improves; Sugar Unchanged
- Platinum Getting More Precious on Tight Supply: Chart of the Day
- Goldman Sachs Prefers Copper, Palladium, Metallurgical Coal
- U.S. Oil-Product Exports Exceed 2009 Imports to Drive Ship Surge
- Icahn’s Transocean Buy Pushes Driller Toward Partnership: Energy
- Louis Dreyfus Joins With Australia’s Namoi Cotton to Boost Sales
- Gold Swings Between Gains and Declines on Debt, Growth Concerns
CURRENCIES
YEN – Currency War is on. After getting lit up like a Christmas tree, the Yen just bounced for 2-days (Nikkei down -2.6% overnight on that as Government Intervention ramps implied market volatility), so we’ll be looking to re-short the Yen inside of $88 (vs USD) if/when we get that signal today. This is just wild to watch.
EUROPEAN MARKETS
ASIAN MARKETS
MIDDLE EAST
The Hedgeye Macro Team