THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – January 29, 2013


As we look at today's setup for the S&P 500, the range is 22 points or 0.81% downside to 1488 and 0.65% upside to 1510.                              

SECTOR AND GLOBAL PERFORMANCE

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EQUITY SENTIMENT:


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CREDIT/ECONOMIC MARKET LOOK:

  • YIELD CURVE: 1.68 from 1.69
  • VIX  closed at 13.57 1 day percent change of 5.28%
  • 10YR – higher-highs for Treasury yields again this week despite stocks having their 1st down day in 8 and the futures a tad lower this morning; 2.01% is immediate-term TRADE resistance; no intermediate-term resistance to 2.41%; employment and housing continue to support higher bond yields and fund flows out of Treasuries into stock market chasing.

MACRO DATA POINTS (Bloomberg Estimates):

  • FOMC opens two-day meeting
  • 7:45am: ICSC weekly sales
  • 8:55am: Johnson/Redbook weekly sales
  • 9am: S&P/CS 20 City M/m, Nov. est. 0.7% (prior 0.66%)
  • 9am:S&P/CS Composite-20 Y/y, Nov., est. 5.5% (prior 4.31%)
  • 10am: Consumer Confidence, Jan., est. 64.0 (prior 65.1)
  • 11am: Fed to purchase $2.75b-$3.5b notes in 2020-2022 sector
  • 11:30am: U.S. Treasury to sell 4W bills
  • 1pm: U.S. Treasury to sell $35b 5Y notes
  • 4:30pm: API energy inventories

GOVERNMENT:

    • President Obama to speak on immigration in Nev.
    • Senate in session, House returns Feb. 4
    • Senate expected to vote on nomination of Sen. John Kerry, D-Mass, to succeed Hillary Clinton as Secretary of State

WHAT TO WATCH

  • Bernanke seen buying $1.14t in assets by early 2014
  • Goldman raises ~$1b from stake in China’s ICBC
  • Yahoo sees 1Q revenue below estimates as 4Q adj. EPS beats
  • VMWare sales forecast misses estimates; job cuts planned
  • AMR ad hoc bondholder group said to favor merger with US Airways
  • BS told by U.S. judge to give IRS data on Wegelin accounts
  • U.S. seeks criminal charges in RBS Libor settlement, WSJ says
  • Bausch & Lomb’s PE owners may favor IPO after buyers balk: WSJ
  • Japan’s govt. proposes 1st spending cut in 7 yrs
  • India cuts interest rates to revive growth as inflation cools
  • United States Bakery to buy Hostess bread brands for $29m

EARNINGS:

    • Tyco International (TYC) 6am, $0.39
    • Danaher (DHR) 6am, $0.86
    • Ashland (ASH) 6am, $1.36
    • Polaris Industries (PII) 6am, $1.23
    • Eli Lilly & Co (LLY) 6:30am, $0.79 - Preview
    • Harris (HRS) 6:30am, $1.19
    • CIT Group (CIT) 6:30am, $0.61
    • EMC (EMC) 6:45am, $0.52
    • Potlatch (PCH) 6:45am, $0.32
    • International Paper (IP) 6:58am, $0.65
    • Waddell & Reed (WDR) 6:59am, $0.58
    • IDEXX (IDXX) 7am, $0.71
    • Corning (GLW) 7am, $0.33
    • Pentair (PNR) 7am, $0.44
    • Pfizer (PFE) 7am, $0.44 - Preview
    • Tupperware Brands (TUP) 7am, $1.68
    • DR Horton (DHI) 7am, $0.14 - Preview
    • Harley-Davidson (HOG) 7am, $0.31
    • Metro (MRU CN) 7am, C$1.11
    • Ford Motor Co (F) 7am, $0.26 - Preview
    • Boston Scientific (BSX) 7am, $0.11 - Preview
    • Lexmark International (LXK) 7am, $0.90
    • Alliance Resource Partners (ARLP) 7am, $1.34
    • Alliance Holdings GP (AHGP) 7am, $0.79
    • United States Steel (X) 7:30am, $(0.76) - Preview
    • Canadian Pacific Railway (CP CN) 7:30am, $1.28
    • Monro Muffler (MNRO) 7:30am, $0.36
    • JetBlue Airways (JBLU) 7:30am, $0.02
    • T Rowe Price Group (TROW) 7:30am, $0.89
    • Anixter International (AXE) 7:30am, $1.32
    • BankUnited (BKU) 7:30am, $0.49
    • NextEra Energy (NEE) 7:32am, $0.95
    • Valero Energy (VLO) 7:40am, $1.20
    • United Bankshares (UBSI) 7:50am, $0.44
    • Affiliated Managers Group (AMG) 7:55am, $2.43
    • Illinois Tool Works (ITW) 8am, $0.91
    • Peabody Energy (BTU) 8am, $0.26
    • Gentex (GNTX) 8am, $0.26
    • Capitol Federal Financial (CFFN) 8:30am, $0.12
    • Nucor (NUE) 9am, $0.30 - Preview
    • Amazon.com (AMZN) 4pm, $0.27
    • Plantronics (PLT) 4pm, $0.68
    • Freescale Semiconductor (FSL) 4pm, $(0.17)
    • Vertex Pharmaceuticals (VRTX) 4pm, $(0.08)
    • Hub Group (HUBG) 4pm, $0.50
    • Manhattan Associates (MANH) 4pm, $0.67
    • Ace (ACE) 4:01pm, $1.28
    • Aspen Technology (AZPN) 4:01pm, $0.05
    • Wesco Aircraft Holdings (WAIR) 4:01pm, $0.28
    • Robert Half International (RHI) 4:02pm, $0.41
    • Parexel International (PRXL) 4:02pm, $0.33
    • Dolby Laboratories (DLB) 4:05pm, $0.56
    • Broadcom (BRCM) 4:05pm, $0.74
    • StanCorp Financial Group (SFG) 4:05pm, $0.84
    • Arthur J Gallagher & Co (AJG) 4:09pm, $0.38
    • Jones Lang LaSalle (JLL) 4:15pm, $2.62
    • Ryland Group (RYL) 4:15pm, $0.50
    • CapitalSource (CSE) 4:15pm, $0.13
    • Virtus Investment (VRTS) 4:15pm, $1.52
    • Unisys (UIS) 4:30pm, $1.49
    • PolyOne (POL) 4:35pm, $0.21
    • Silgan Holdings (SLGN) 4:50pm, $0.47
    • Boston Properties (BXP) Post-Mkt, $1.24
    • MB Financial (MBFI) Post-Mkt, $0.43
    • Buckeye Technologies (BKI) Post-Mkt, $0.68

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)


OIL – biggest headwind to our call on Global Growth remains higher oil prices; with Brent back in a Bullish Formation (long-term TAIL support = $111.48), it’s ok to start shorting favorite consumer ideas (we shorted Macy’s (M) in the US yesterday and still like DRI and KSS short).

  • Gold Assets Head for Worst Monthly Drop Since ‘11 on Rebound             
  • Tin Beating All Metals on Fourth Year of Shortages: Commodities
  • Brent Trades Near Three-Month High on Global Economic Confidence
  • Gold Climbs From Two-Week Low in London on U.S. Stimulus Outlook
  • Canadian Wheat Harvest Seen Gaining as Global Supply Rebounds
  • Copper Trades Little Changed at $8,053 a Metric Ton in London
  • Cocoa Advances on Speculation of Industry Buying; Sugar Retreats
  • Cotton Crop Shrinking Signals Rebound in Price: Chart of the Day
  • Rubber Declines as U.S. Home Sales, Chinese Purchases Decrease
  • Oil Supplies Rise in Survey as Production Climbs: Energy Markets
  • Rebar Ends Near Six-Month High on Chinese Growth Recovery Bets
  • Tanker Glut Worsening as OPEC Cuts Most Since Recession: Freight
  • Anglo Writes Down $4 Billion on Minas-Rio as Spending Climbs
  • Corn Rises for Second Day as Dryness May Reduce Argentine Crop

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CURRENCIES

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EUROPEAN MARKETS

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ASIAN MARKETS


ASIA – mixed bag of signals overnight as China powers to another immediate-term TRADE overbought signal, +0.5% at 2338 on the Shanghai Comp; India down -0.6% on what we thought was a dumb rate cut (1st Asian major to cut in 2013, which is a lot different than last yrs 10,000 global easings).

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MIDDLE EAST


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The Hedgeye Macro Team