TODAY’S S&P 500 SET-UP – January 25, 2013
As we look at today's setup for the S&P 500, the range is 21 points or 0.92% downside to 1481 and 0.48% upside to 1502.
SECTOR AND GLOBAL PERFORMANCE
EQUITY SENTIMENT:
CREDIT/ECONOMIC MARKET LOOK:
- YIELD CURVE: 1.65 from 1.61
- VIX closed at 12.69 1 day percent change of 1.85%
- BOND YIELDS – We had lively debates in Boston and NYC seeing clients this week; we definitely surprised people w/ my bullishness on both growth and stocks; especially relative to Treasuries and JGBs; Fund Flows (into stocks, out of bonds) = big part of my call here; we just saw the 3rd consecutive wk of real US Equity inflows (+$3.7B ex-ETFs); that’s why this market won’t go down.
MACRO DATA POINTS (Bloomberg Estimates):
- 10am: New Home Sales, Dec., est. 385k (prior 377k)
- 10am: New Home Sales M/m, Dec., est. 2.1% (4.4%)
- 11am: Fed to buy $3b-$3.75b debt in 2018-2019 sector
- 1pm: Baker Hughes rig count
GOVERNMENT:
- Treasury Secretary Tim Geithner to step down
- CFTC meets on surveillance, enforcement matters, 10am
- FDA to release documents on Boehringer Ingelheim’s once-daily drug olodaterol for chronic obstructive pulmonary disorder
- Second day of HHS, FDA meeting on public health benefits, risks of drugs containing hydrocodone, 8am
- HHS, NIH meeting on deafness and other communication disorders, Bethesda. 8:30am
WHAT TO WATCH
- Fed pushes into "uncharted territory" as assets hit $3t
- Apple expands audits, says China labor agent forged documents
- Microsoft’s Windows bolsters sales in challenging PC environment
- Boeing design should prevent 787 battery fires, NTSB says
- tarbucks profit meets ests. on sales increase in Americas
- Samsung, Apple Hold half smartphone mkt as shipments jump 43%
- Weyerhaeuser 4Q EPS ex-items 26c; CEO says building momentum
- U.K. eco. shrank more than forecast in 4Q
- German business confidence gained for 3rd mo. in Jan.
- Samsung drops after warning won may cut earnings $2.8b
- AT&T 4Q loss narrows as smartphone sales hit record
- Financial job losses near 4-yr high as Europe leads cuts
- Icahn says no respect for Ackman after Herbalife bet
- Morgan Stanley CEO pay said to decline 30% excluding new award
- Whitman Capital founder gets 2 yrs’ prison in insider case
- Fed Meeting, U.S. Jobs, Boeing, China: Week Ahead Jan. 26-Feb. 2
EARNINGS:
- Covidien (COV) 6am, $1.06 - Preview
- Prosperity Bancshares (PB) 6:02am, $0.84
- Honeywell International (HON) 6:30am, $1.10 - Preview
- Immunogen (IMGN) 6:30am, $(0.25)
- Halliburton Co (HAL) 6:56am, $0.61
- Kimberly-Clark (KMB) 7am, $1.36
- Procter & Gamble (PG) 7am, $1.11 - Preview
- Amcol International (ACO) 7am, $0.48
- Oshkosh (OSK) 7am, $0.31
- Moog (MOG/A) 7:55am, $0.82
COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)
- WTI Crude Poised for Longest Run of Weekly Gains Since 2009
- Copper Seen Extending Rally With China Accelerating: Commodities
- Wheat Falls as Moisture May Ease Drought Stress in U.S. Plains
- Cotton Falls in N.Y., Heading for First Drop in Eight Sessions
- Copper Slips 0.1% to $8,091 a Ton in London, Erasing Advance
- Munich Re Says World Crop Insurance Costs Top Record on Drought
- Leaf Rust Outbreak Threatens Central American Coffee Output
- Palm Exports From Malaysia Drop at Slower Pace on Indian Demand
- Oil May Increase as Economic Growth Boosts Demand, Survey Shows
- Corn Swoon Returning on Moving-Average Break: Technical Analysis
- Chavez Cancer Freezes Venezuela’s Overseas Oil Funding: Energy
- European Weekly Crude Palm Oil Price at 3-Month High: BI Chart
- Gas Demand Declines for Fourth Year in Mature European Markets
- Gold Declines as Focus Shifts to Investor Selling; Silver Falls
CURRENCIES
EUROPEAN MARKETS
ASIAN MARKETS
JAPAN – ah the fresh smell of Taro Aso’s burning Yen again on the tape this morning as the Yen hits new lows; Nikkei rips +2.9% on that to fresh new highs (up +26.2% since mid-Nov!) and they haven’t even hit the CTRL+P button hard yet; with -0.2% y/y DEFLATION in their DEC CPI, they are going to have to print like the world has never seen to hit “2% inflation”.
KOSPI – this is the Currency War, and the South Korean currency (and stock market) does not like this; KOSPI confirms our breakdown signal from 3days ago, dropping another -0.9% overnight (down -4.4% from its JAN high); interconnectedness in global macro markets matters; stay tuned on this, Chinese stocks broke 2313 TRADE support this wk too.
MIDDLE EAST
The Hedgeye Macro Team