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TODAY’S S&P 500 SET-UP – February 4, 2013


As we look at today's setup for the S&P 500, the range is 19 points or 1.00% downside to 1498 and 0.25% upside to 1517.   

SECTOR AND GLOBAL PERFORMANCE


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EQUITY SENTIMENT:


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CREDIT/ECONOMIC MARKET LOOK:

  • YIELD CURVE: 1.77 from 1.75
  • VIX  closed at 12.9 1 day percent change of -9.66%
  • 10YR – with employment #GrowthStabilizing, Treasuries waking up to another 4bps higher in the 10yr Yield to 2.05% this morn as fund flows continue to dominate just about any bear case for stocks that I can find (best start for US Equity flows since 96’). US Stocks up for 5 weeks in a row; no intermediate-term resistance for the 10yr to 2.41%.

MACRO DATA POINTS (Bloomberg Estimates):

  • 9:45am: ISM New York, Jan. (prior 54.3)
  • 10am: Factory Orders, Dec., est. 2.2% (prior 0.0%)
  • 11am: Fed to purchase $2.75b-$3.5b debt in 2020-2022 sector
  • 11:30am: U.S. Treasury to sell $32b in 3M bills, $28b in 6M bills
  • U.S. Rates Weekly Agenda

GOVERNMENT:

    • President Barack Obama speaks on gun control in Minn.
    • Obama said yday that U.S. needs rev. w/spending cuts
    • Treasury issues quarterly borrowing estimates
    • Release date for Pentagon’s fiscal 2014 budget; delay expected after fiscal cliff disruptions

WHAT TO WATCH

  • China services industries expand at fastest pace since Aug.
  • PBOC’s Zhou to step down in March, official newspaper reports
  • Cowen plans to buy Dahlman Rose amid stock-trading slowdown
  • Blackrock sued by pension funds over securities lending fees
  • ntergy says service to Superdome was operating properly
  • Baltimore beat San Francisco 34-31 in Super Bowl
  • Pegasus hires Starwood Capital Hotel chief to run luxury brand
  • Permira, KKR said to work with JPMorgan on ProSiebenSat.1 exit
  • Blackstone fund buys majority stake in seaplane companies
  • Aspen Pharmacare in talks to buy Merck & Co.’s Netherlands unit
  • Zombie love tale “Warm Bodies” No. 1 film with $20m
  • S. Korea boosts diplomacy against possible N. nuclear test
  • U.S. Weekly Agendas: Finance, Industrials, Energy, Health, Consumer, Tech, Media/Ent, Real Estate, Transports
  • New feature: North American M&A Agenda
  • Canada Weekly Agendas: Energy, Mining
  • China Export Rebound, IPad, U.S. Trade: Week Ahead Feb. 4-9

EARNINGS:

    • Humana (HUM) 6am, $1.07 - Preview
    • TransDigm Group (TDG) 7am, $1.48
    • Simon Property (SPG) 7am, $2.17
    • MWI Veterinary (MWIV) 7am, $1.19
    • Sysco (SYY) 8am, $0.41
    • Clorox (CLX) 8:30am, $0.81 - Preview
    • Gannett (GCI) 8:30am, $0.88
    • Royal Caribbean (RCL) 8:30am, $0.06
    • Mercury General (MCY) 8:30am, $0.23
    • Acme Packet (APKT) 4pm, $0.08
    • Torchmark (TMK) 4pm, $1.31
    • Edwards Lifesciences (EW) 4pm, $0.77
    • Baidu (BIDU) 4pm, $1.30
    • Bottomline Technologies (EPAY) 4pm, $0.23
    • Gilead Sciences (GILD) 4:01pm, $0.48
    • General Growth Properties (GGP) 4:01pm, $0.29
    • Hologic (HOLX) 4:01pm, $0.37
    • Life Technologies (LIFE) 4:01pm, $1.11
    • Power Integrations (POWI) 4:03pm, $0.42
    • Axis Capital Holdings (AXS) 4:04pm, $(1.19)
    • SolarWinds (SWI) 4:05pm, $0.33
    • Anadarko Petroleum (APC) 4:05pm, $0.71
    • Leggett & Platt (LEG) 4:05pm, $0.32
    • Yum! Brands (YUM) 4:09pm, $0.82
    • Symetra Financial (SYA) 4:10pm, $0.34
    • Advent Software (ADVS) 4:14pm, $0.28
    • Hartford Financial (HIG) 4:15pm, $0.28
    • Healthcare Services (HCSG) 4:15pm, $0.18
    • Hillenbrand (HI) 4:23pm, $0.37
    • BRE Properties (BRE) 4:45pm, $0.60
    • Post Properties (PPS) 5pm, $0.65
    • Bristow Group (BRS) 5:05pm, $0.89
    • Idex (IEX) 5:22pm, $0.68
    • Markel (MKL) Post-Mkt, $(2.81)
    • Regal-Beloit (RBC) Post-Mkt, $0.74

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • Platinum Gains to Four-Month High on South Africa Output Concern
  • Mongolia Should Get More Control of Rio Mine, President Says
  • Bulls Rewarded With Best January Rally Since 2006: Commodities
  • Brent Crude Slips From Four-Month High Amid Iran Discussions
  • Soybeans Reach Six-Week High on Threats to South American Crops
  • Zinc Declines From One-Year High as European Equities Retreat
  • Sugar Advances in New York as Speculators Curb Bearish Wagers
  • Iron-Ore Swaps Rally to 15-Month High as China Seen Accelerating
  • Rubber Rallies to 10-Month High on U.S. Car Sales, Weakening Yen
  • Corn Imports by South Korea Seen Climbing on Higher Wheat Costs
  • Land Battles Rise as U.S. Eyes 450,000 Miles of New Pipe: Energy
  • Hedge Funds Racing Oil Refiners to $100 a Barrel: Energy Markets
  • Freezing California Lettuce Boosts Salad Costs: Chart of the Day
  • Shanghai Rebar Rises to Nine-Month High on Service Industry Data

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CURRENCIES

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EUROPEAN MARKETS


SPAIN – what is the #PoliticalClass getting greased w/ bailout funds on the side, amongst friends? Most Read headline on Bloomberg this morn is about Spanish (Rajoy) and Italian corruption; it’s like watching Lincoln. All the while both the IBEX and MIB indexes has abruptly snapped my TRADE lines of support, looking nothing like Germany.

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ASIAN MARKETS


JAPAN – old Taro Aso was at it again overnight, jawboning the Yen to new lows, breaking the 93 level (en route to 100, then 120) as the Nikkei’s crash (to the upside) moves to +30% since November 13th – seems normal. I couldn’t make this up if I tried but last night Aso said “we can only learn from history”.

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MIDDLE EAST


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The Hedgeye Macro Team