Hedgeye - THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – February 5, 2013

As we look at today's setup for the S&P 500, the range is 24 points or 0.45% downside to 1489 and 1.16% upside to 1513.

SECTOR AND GLOBAL PERFORMANCE

EQUITY SENTIMENT:

CREDIT/ECONOMIC MARKET LOOK:

YIELD CURVE: 1.74 from 1.71
VIX closed at 14.67 1 day percent change of 13.72%

MACRO DATA POINTS (Bloomberg Estimates):

6:30am: ESM to sell as much as EUR2b 91D bills
7:45am/8:55am: ICSC/Redbook weekly retail sales
8:30am: Fed’s Duke speaks on community banks in Duluth, Ga.
10am: ISM Non-Manf. Composite, Jan., est. 55.0 (prior 55.7)
10am: IBD/TIPP Economic Optimism, Feb. est. 47 (prior 46.5)
11am: Fed to purchase $1.25b-$1.75b debt in 2036-2042 sector
11:30am: U.S. Treasury to sell 4W bills, $25b in 1Y bills

GOVERNMENT:

CBO releases federal budget projections, economic outlook
Yahoo’s Mayer, Goldman’s Blankfein in Obama immigration session
CFTC holds public roundtable to discuss agency’s proposed rulemaking, “Enhancing Protections Afforded Customers and Customer Funds Held by Futures Commission Merchants and Derivatives Clearing Organizations,” 9:30am
SEC holds a roundtable discussion on decimal-based trading, tick sizes for small, medium sized companies, 10am
CFPB Director Richard Cordray, National Credit Union Administration Board Chairman Debbie Matz hold “town hall webinar” on “Ability-to-Repay” rule, 3pm
HHS, FDA discuss creation of alternative pathway for expediting approval of drugs needed for unmet medical needs, 9am
FCC Chairman Julius Genachowski holds field hearings on Hurricane Sandy to consider how nation’s communications networks work during crises, 9am, 2pm.
FCC Commissioner Robert McDowell and David Gross, former U.S. ambassador for international communications and information policy, testify at hearing on Internet freedom before 3 House subcmtes, 10:30am

WHAT TO WATCH

Dell board said to meet to vote on $24b leveraged buyout
Virgin Media in talks with Liberty Global on possible transaction
Hartford announces buyback, debt repayment plan after Sandy
Goldman hired by Russia as corporate broker to boost image
U.K. economy faces risk of a prolonged stagnation, NIESR says
German push to speed bank bondholder-loss plan gains momentum
Wells Fargo to target sovereign wealth funds in Dubai expansion
Buffett gets $1.8b in investment assets from Cigna deal
Fidelity said to press Endo Health to consider selling itself
Facebook said to develop location-tracker app for smartphones
Homes sell in 2 weeks as U.S. spring buyers face low inventory
MF Global customer funds rules will get another hearing at CFTC
UBS 4Q loss narrower than est. after Libor fine, job cuts
Hemispherx fails to win U.S. approval for chronic fatigue drug
IBM adds cheaper power servers to expand in emerging markets
Boeing asks U.S. FAA to permit test flights with Dreamliner
J.C. Penney asks judge to bar claim retailer defaulted on bonds
Consumer Reports says Ford, GM turbo engine benefits overstated
Shirakawa plans to exit as Bank of Japan governor on March 19

EARNINGS:

Becton Dickinson (BDX) 6am, $1.23
Diamond Offshore Drilling (DO) 6am, $1.09
Centene (CNC) 6am, $0.36
Emerson Electric (EMR) 6:30am, $0.62
Spectra Energy (SE) 6:30am, $0.31
Eaton (ETN) 6:30am, $0.93
Littelfuse (LFUS) 6:30am, $0.84
Church & Dwight (CHD) 7am, $0.57
Cardinal Health (CAH) 7am, $0.86
Sirius XM Radio (SIRI) 7am, $0.02
Archer-Daniels-Midland (ADM) 7am, $0.59
Delphi Automotive (DLPH) 7am, $0.87
OneBeacon Insurance Group (OB) 7am, $0.12
Techne (TECH) 7am, $0.77
Aecom Technology (ACM) 7am, $0.30
HCA Holdings (HCA) 7:03am, $0.83
Alliant Techsystems (ATK) 7:30am, $1.71
Teco Energy (TE) 7:30am, $0.21
Estee Lauder (EL) 7:30am, $1.05
Automatic Data Processing (ADP) 7:30am, $0.71
Vishay (VSH) 7:30am, $0.08
Arch Coal (ACI) 7:45am, $(0.15)
Inergy Midstream (NRGM) 7:45am, $0.16
Inergy (NRGY) 7:46am, $0.08
SunCoke Energy (SXC) 7:59am, $0.34
Magellan Midstream (MMP) 8am, $0.65
Spectra Energy (SEP) 8am, $0.37
Computer Sciences (CSC) 8am, $0.65
Kellogg Co (K) 8am, $0.66 - Preview
UDR (UDR) 8am, $0.34
Agco (AGCO) 8am, $0.98
Liberty Property Trust (LRY) 8am, $0.63
Lennox International (LII) 8am, $0.55
Allergan (AGN) 9am, $1.18 - Preview
Bell Aliant (BA CN) Pre-Mkt, C$0.41
Unum Group (UNM) 4pm, $0.77
Chipotle Mexican Grill (CMG) 4pm, $1.95
Expedia (EXPE) 4pm, $0.65
Ultimate Software (ULTI) 4pm, $0.39
Universal (UVV) 4pm, NA
Panera Bread Co (PNRA) 4pm, $1.74
CBL & Associates Properties (CBL) 4pm, $0.57
Kimco Realty (KIM) 4:01pm, $0.31
Cerner (CERN) 4:01pm, $0.64
Fiserv (FISV) 4:01pm, $1.40
CME Group (CME) 4:01pm, $0.64
NeuStar (NSR) 4:01pm, $0.72
Hanesbrands (HBI) 4:01pm, $1.04
Team Health (TMH) 4:01pm, $0.35
Shutterfly (SFLY) 4:02pm, $1.39
Thoratec (THOR) 4:02pm, $0.37
Take-Two Interactive (TTWO) 4:05pm, $0.55
Zynga (ZNGA) 4:05pm, $(0.03)
Jack Henry & Associates (JKHY) 4:05pm, $0.50
Myriad Genetics (MYGN) 4:05pm, $0.38
Alterra Capital Holdings (ALTE) 4:05pm, $(0.44)
Trimble Navigation (TRMB) 4:05pm, $0.55
Aflac (AFL) 4:07pm, $1.48
Hain Celestial Group (HAIN) 4:10pm, $0.69
Genworth Financial (GNW) 4:10pm, $0.27
KKR Financial Holdings (KFN) 4:12pm, $0.39
Walt Disney (DIS) 4:15pm, $0.77
CH Robinson Worldwide (CHRW) 4:15pm, $0.70
Equity Residential (EQR) 4:25pm, $0.76
Genworth MI Canada (MIC CN) 4:30pm, C$0.78
Acadia Realty Trust (AKR) 5pm, $0.28
HNI (HNI) 5:30pm, $0.43
Suncor Energy (SU CN) 10pm, C$0.74
BioMed Realty Trust (BMR) Post-Mkt, $0.34
MDU Resources Group (MDU) Post-Mkt, $0.39

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

CRB Index – Commodities failing at our long-term TAIL risk line for the CRB Index (306) was a big reason why we got longer of Asian/US stocks into yesterday’s close; CRB Index (peaked in 2011) = long-term bubble that is popping as the US Dollar continues to make a series of long-term higher lows; Oil is overbought up here, but we need to see that drop back below $113 (Brent).

Iron Ore Seen Poised for Bear Market by Smirk as Supply Expands
Platinum Supply Falls to 13-Year Low as Mines Close: Commodities
Oil Rises From One-Week Low as Recovery Signs Counter Supplies
Platinum Trades Near 17-Week High on Concern Supplies Will Fall
Nickel Drops Most in Three Weeks as Investors Seek to Curb Risk
Soybeans Rise for Third Session as Brazil Rain May Slow Harvest
Coffee Gains as Vietnam Growers Hold Supplies; Sugar Advances
Oil Supplies Rise in Survey on Seaway Disruption: Energy Markets
Gasoline at U.S. Pumps Jumps Most in Two Years on Crude Rally
Mongolia Should Get More Control of Rio Mine, President Says
ADM Profit Beats Estimates After Soybean-Processing Margins Gain
Niger in Talks With Areva for Uranium Mines to Give More Funds
Record China Flour Cost Spurring Wheat Imports: Chart of the Day
Anglo American CEO Carroll Says Platinum Industry Is ‘in Crisis’

CURRENCIES

EUROPEAN MARKETS

EUROPE – didn’t take much to freak people out in European Equities – Socialist Quote of The Day “the Euro shouldn’t fluctuate as the market sees fit” (Hollande), as France reports a bomb of a Services PMI print for JAN at 43.6 (vs 45.2 last month); UK and Germany both had very solid PMI reports – both equity markets look very bullish compared to France, Italy, and Spain.

ASIAN MARKETS

KOSPI – continues to be a stealth leading indicator (broke TRADE and TREND supports in the last 3 weeks) and confirmed that bearish TREND overnight, down another -0.8% to 1938 (TREND resistance = 1959); China, Singapore, and Hong Kong look nothing like the KOSPI (so buy those); Shanghai Comp closed up +0.2% last night, despite the European freak-out.

MIDDLE EAST

The Hedgeye Macro Team