THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – February 7, 2013


As we look at today's setup for the S&P 500, the range is 25 points or 1.33% downside to 1492 and 0.32% upside to 1517.          

SECTOR AND GLOBAL PERFORMANCE


BRAZIL – the Bovespa has joined the KOSPI confirming TRADE and TREND duration breakdowns – this, combined with European Indices breaking their immediate-term TRADE lines almost across the board, is new. We respect new.

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EQUITY SENTIMENT:


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CREDIT/ECONOMIC MARKET LOOK:

  • YIELD CURVE: 1.73 from 1.71
  • VIX  closed at 13.41 1 day percent change of -2.26%

MACRO DATA POINTS (Bloomberg Estimates):

  • 7am: BoE announces interest rates
  • 7:45am: ECB announces interest rates
  • 8:30am: ECB’s Draghi holds news conference
  • 8:30am: Nonfarm Productivity, 4Q P, est. -1.4% (prior 2.9%)
  • 8:30am: Initial Jobless Claims, Feb. 2 est. 360k (prior 368k)
  • 9:30am: Fed’s Stein speaks on financial stability in St. Louis
  • 9:45am: Bloomberg Consumer Comfort, Feb. 3 (prior -37.5)
  • 10am: Freddie Mac mortgage rates
  • 10:30am: EIA natural-gas storage change
  • 11am: Fed to purchase $1.25b-$1.75b debt in 2036-2042 sector
  • 3pm: Consumer Credit, Dec., est. $14b (prior $16.045b)

GOVERNMENT:

    • NTSB Chairman Deborah Hersman provides update of investigation into Jan. 7 fire that occurred on Japan Airlines Boeing 787 at Logan Intl Airport in Boston, 11am
    • Sen. Bernie Sanders, I-Vt., holds news conference on legislation to stop corporations from sheltering income in Cayman Islands, other tax havens, 10:30am
    • N. Anthony Coles, CEO of Onyx Pharmaceuticals, attends Senate briefing with FDA Commissioner targaret Hamburg, 12pm
    • ITC votes on dumping of frozen, warm-water shrimp from China, Ecuador, India, Indonesia, Malaysia, Thailand, Vietnam
    • FAA, DOT hold mtg on performance standards for collision avoidance systems, 8:30am
    • USPS Board of Governors hold closed mtg, 10am

WHAT TO WATCH

  • Euro strengthens against the dollar before ECB policy decision
  • BOE will likely maintain benchmark interest rate at 0.5%
  • January retail sales likely helped by clearance
  • China injects record $138b into financial system
  • Barclays said to dismiss traders amid 275 job cuts in New York
  • U.S. Airways talks with AMR said to intensify as deadline looms
  • McGraw-Hill defense seen as diversion against U.S. fraud claims
  • Deep-water safety defect threatens global offshore oil drilling
  • Libor accords leave banks facing states with massive claims
  • JPMorgan overtakes Wells Fargo as most valuable bank in U.S.
  • Yahoo links up with Google to put ads on finance, news sites
  • BofA said to shift U.S. Trust bonuses in push for more clients
  • Dell sets Nov. 5 deadline to complete $24.4b LBO deal
  • Teck Resources earnings beat est; sees 2013 coal input of 25mt
  • U.K. manufacturing rises most since July on machinery, chemicals
  • Spain sells EU4.6b bonds vs maximum target EU4.5b

EARNINGS:

    • Cigna (CI) 6am, $1.48
    • Cognizant (CTSH) 6am, $0.91
    • Manulife Financial (MFC CN) 6am, C$0.32 - Preview
    • ON Semiconductor (ONNN) 6am, $0.07
    • Patterson-UTI Energy (PTEN) 6am, $0.29
    • Starwood Hotels (HOT) 6am, $0.65
    • Air Canada (AC/A CN) 6am, C$(0.23)
    • Bunge (BG) 6:30am, $2.32
    • Coca-Cola Enterprises (CCE) 6:30am, $0.44
    • Flowers Foods (FLO) 6:30am, $0.25
    • Hasbro (HAS) 6:30am, $1.16
    • International Flavors (IFF) 6:40am, $0.84
    • Ingredion (INGR) 6:45am, $1.42
    • Teradata (TDC) 6:55am, $0.74
    • Philip Morris (PM) 6:59am, $1.22 - Preview
    • BCE (BCE CN) 7am, C$0.66
    • Fortis (FTS CN) 7am, C$0.50
    • Lazard (LAZ) 7am, $0.33
    • Sally Beauty (SBH) 7am, $0.34
    • Scripps Networks  (SNI) 7am, $0.92
    • Sprint Nextel (S) 7am, $(0.44) - Preview
    • Xylem (XYL) 7am, $0.46
    • Noble Energy (NBL) 7:28am, $1.13
    • FLIR Systems (FLIR) 7:30am, $0.50
    • MSCI (MSCI) 7:30am, $0.53
    • Och-Ziff (OZM) 7:30am, $0.72
    • Monster Worldwide (MWW) 7:30am, $0.07
    • Exelon (EXC) 7:30am, $0.65
    • Graphic Packaging Holding (GPK) 7:30am, $0.08
    • KKR & Co (KKR) 7:55am, $0.21
    • Arrow Electronics (ARW) 8am, $1.08
    • Brookfield Renewable Energy (BEP-U CN) 8am, $0.01
    • Sigma-Aldrich (SIAL) 8am, $0.95
    • Shoppers Drug Mart (SC CN) 8:21am, C$0.84
    • Advance Auto Parts (AAP) 8:30am, $0.75
    • New York Times (NYT) 8:30am, $0.31
    • Medical Properties Trust (MPW) 8:30am, $0.26
    • Great-West Lifeco (GWO CN) 10:49am, $0.53 - Preview
    • NCR (NCR) 4pm, $0.70
    • Coinstar (CSTR) 4:01pm, $0.76
    • Genpact Ltd (G) 4:01pm, $0.24
    • Nuance Communications (NUAN) 4:01pm, $0.36
    • XL Group (XL ) 4:01pm, $(0.36)
    • American Capital Agency (AGNC) 4:01pm, $0.95
    • Regal Entertainment Group (RGC) 4:01pm, $0.20
    • CareFusion (CFN) 4:02pm, $0.52
    • Prospect Capital (PSEC) 4:02pm, $0.42
    • Activision Blizzard (ATVI) 4:05pm, $0.72
    • Republic Services (RSG) 4:05pm, $0.43
    • SunPower (SPWR) 4:05pm, $0.14
    • Riverbed Technology (RVBD) 4:05pm, $0.29
    • DCT Industrial Trust (DCT) 4:10pm, $0.10
    • Apartment Investment & Management Co (AIV) 4:11pm, $0.50
    • LinkedIn (LNKD) 4:15pm, $0.19
    • Microchip Technology (MCHP) 4:15pm, $0.39

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)


OIL – huge headwind developing for global consumption #GrowthStabilizing with Brent Oil signaling higher-highs and higher lows on our intermediate-term TREND duration. If you need a reason to start selling some stocks and covering Treasury shorts, that’s it.

  • Brent Crude Rises to Four-Month High, Extends Premium Over WTI
  • U.S. Soy Supply at 48-Year Low as Brazil Ships Held: Commodities
  • World Food Prices Were Stable in January, According to UN Index
  • Zinc Falls for Third Day as Euro-Area Economies Keep Struggling
  • Corn Drops on Speculation USDA May Raise U.S. Stockpile Outlook
  • Platinum Rally Stalls on Speculation Miners May Boost Selling
  • Offshore Drilling Halted by U.S. on Wells With Flawed Bolts
  • Rebar Advances to Nine-Month High as Iron Ore Rallies on Demand
  • Cooking Oil Imports by India Seen Climbing to Record to Beat Tax
  • China Buys Gas at Record as Crude Imports Capped: Energy Markets
  • Copper Seen in ‘Struggle’ to Exceed $8,422: Technical Analysis
  • Olam Second-Quarter Profit Jumps 20% on Grains, Nut Volumes
  • Astra Agro Sells 11,000 Tons of Palm Oil in Auction (Table)
  • Nickel Seen by Deutsche Bank Rebounding After Chinese New Year

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CURRENCIES

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EUROPEAN MARKETS


EUROPE – what would be really interesting is if we saw the EuroStoxx50 snap its intermediate-term TREND line of 2615 support; its hanging on, barely, this morning – but we need to give this one some time. Waiting/watching for headfakes has been key.

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ASIAN MARKETS

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MIDDLE EAST

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The Hedgeye Macro Team