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THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – February 28, 2014


As we look at today's setup for the S&P 500, the range is 30 points or 1.47% downside to 1827 and 0.15% upside to 1857.                               

                                                                                                

SECTOR PERFORMANCE

 

THE HEDGEYE DAILY OUTLOOK - 1

 

THE HEDGEYE DAILY OUTLOOK - 2

 

EQUITY SENTIMENT:

 

THE HEDGEYE DAILY OUTLOOK - 10                                                                                                                                                                  

 

CREDIT/ECONOMIC MARKET LOOK:

  • YIELD CURVE: 2.33 from 2.32
  • VIX closed at 14.04 1 day percent change of -2.16%

MACRO DATA POINTS (Bloomberg Estimates):

  • 8:30am: Revised GDP q/q, 4Q, est. 2.5% (prior 3.2%)
  • 9:45am: Chicago Purchasing Mgrs, Feb., est. 56.4 (pr 59.6)
  • 9:55am: UofMich. Conf, Feb. final, est. 81.2 (prior 81.2)
  • 10am: Pending Home Sales m/m, Jan., est. 1.8% (prior -8.7%)
  • 10:15am: Fed’s Stein, Kocherlakota, Evans, Plosser speak
  • 1pm: Baker Hughes rig count

GOVERNMENT:

    • 4:45pm Obama DNC speech topics may incl mid-term elections, Affordable Care Act, immigration laws

WHAT TO WATCH:

  • Mt. Gox files for bankruptcy in Tokyo with 6.5b yen debt
  • Euro-area February inflation exceeds economists’ forecasts
  • Yuan drops most on record amid band widening speculation
  • Apple wins dismissal of $2.2b patent suit in Germany
  • AT&T said to build Europe case amid silence on Vodafone
  • Jos. A. Bank seeks talks with Men’s Wearhouse on deal
  • Berkshire Hathaway annual report to be posted Saturday
  • United sees rev. cut after 22,500 flights erased by storms
  • IBM begins cutting U.S. jobs in $1b restructuring plan
  • Salesforce projects 1Q rev. that may top ests.
  • Gap profit exceeds estimates as deep discounts draw shoppers
  • Gunmen occupy Crimea airports, Ukraine seeks IMF financial aid
  • U.S. Jobs, Obama’s Budget, Buffett, ECB: Week Ahead March 1-8

AM EARNS:

    • 3D Systems (DDD) 8am, $0.19
    • Auxilium Pharmaceuticals (AUXL) 7am, $0.21
    • BroadSoft (BSFT) 7am, $0.41
    • Endo Health Solutions (ENDP) 6:32am, $0.93
    • Exelis (XLS) 6:15am, $0.45
    • Golar LNG (GLNG) premkt, ($0.07)
    • Iron Mountain (IRM) 6am, $0.22
    • Isis Pharmaceuticals (ISIS) 8:30am, ($0.16)
    • Lexicon Pharmaceuticals (LXRX) 6am, ($0.05)
    • Liberty Interactive (LINTA) 7:30am, $0.46
    • Liberty Media (LMCA) 7:30am, $0.60
    • Northwest Natural Gas Co (NWN) 6am, $1.03
    • NRG Energy (NRG) 6:49am, $0.23
    • Pepco Holdings (POM) 6:03am, $0.21
    • Vantage Drilling Co (VTG) 7am, $0.08

PM EARNS:

    • Dyax (DYAX) 4:01pm, ($0.04)

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • WTI Trims Monthly Gain on U.S. Demand, Discount to Brent Narrows
  • Drought Threatens Southeast Asia Food Prices as Haze Worsens
  • Nickel Reaches One-Week High on Speculation Supply to Tighten
  • Gold Declines in London as Traders Book Profits Following Climb
  • Natural Gas Heads for Biggest Weekly Drop in New York Since 1996
  • Wheat Heads for Biggest Monthly Gain Since 2012 on U.S. Concern
  • Coffee Declines as Rally Prompts Brazilian Sales; Cocoa Advances
  • EU Sugar Plans Pit Growers Against Food Makers After Prices Fall
  • Freeport May Declare Force Majeure at Grasberg Mine on New Rules
  • London Gold Fix Study Indicates Decade of Bank Manipulation
  • Afghanistan $3 Trillion Minerals Won’t Go Anywhere Without Rails
  • Frozen East Coast Pays as Law Blocks Cheaper Fuel Flows: Energy
  • Cosan Seeks $4.7 Billion Deal to Streamline Sugar Transportation
  • Rebar in Shanghai Falls a Third Month as China Demand Weakens

THE HEDGEYE DAILY OUTLOOK - 5

 

CURRENCIES

 

THE HEDGEYE DAILY OUTLOOK - 6

 

GLOBAL PERFORMANCE

 

THE HEDGEYE DAILY OUTLOOK - 3

 

THE HEDGEYE DAILY OUTLOOK - 4

 

EUROPEAN MARKETS

 

THE HEDGEYE DAILY OUTLOOK - 7

 

ASIAN MARKETS

 

THE HEDGEYE DAILY OUTLOOK - 8

 

MIDDLE EAST

 

THE HEDGEYE DAILY OUTLOOK - 9

 

 

The Hedgeye Macro Team

 

 

 

 

 

 

 

 

 

 

 

 

 


February 28, 2014

February 28, 2014 - Slide1 

BULLISH TRENDS

February 28, 2014 - Slide2

February 28, 2014 - Slide3

February 28, 2014 - Slide4

February 28, 2014 - Slide5

February 28, 2014 - Slide6

February 28, 2014 - Slide7

February 28, 2014 - Slide8 

BEARISH TRENDS

February 28, 2014 - Slide9

February 28, 2014 - Slide10

February 28, 2014 - Slide11
February 28, 2014 - Slide12


Valentine's Day Massacre

This note was originally published at 8am on February 14, 2014 for Hedgeye subscribers.

“You must be new to this town, Mister. Only Al Capone kills like that.”

-Bugs Moran

 

Bugs was a Chicago gangsta, yo. And that’s all I have to say about that. We aren’t making a market call today. Like the entire Connecticut school system (that closes when it drizzles), we’re shutting the office down today for the Valentine’s Day Massacre at Chelsea Piers in Stamford.

 

Not to be confused with Capone’s made for movies stuff, this is going to be the real deal. At 1PM sharp (attendance is free), we have @HedgeyeRetail analyst (Bugs’ 3rd cousin and former Chicago Blackhawks prospect from Robbinsdale, Minnesota, Alec Richards) between the pipes versus The Dan Holland.

 

Not to be confused with the 20yr old Holland who you’ll find on HockeyDB.com (who plays for the New Hampshire Monarchs - 5 games played, 8 PIMS, and 1 assist), Hedgeye’s Holland hails from parts unknown. Scouts from Charlestown say he’s a killer. And all he has to do to win is score 1 goal in 10 breakaway tries on Richards. If he does that, he’ll make Big Alberta, Daryl Jones, a lot of dough.

 

Valentine's Day Massacre - dh wins

 

Back to the Global Macro Grind

 

Oh, you don’t care about Hedgeye hockey and want to make some dough in the market do you?

 

Heyer: “Hello, boys – something I can do for you?”

Gangster: “Yes, you can shut up!”

 

Ok, be that way.

 

While this whole attitude thing may not be what you were looking for on Valentine’s Day, that’s just too bad isn’t it.

 

Despite people on TV getting all lovey-dovey with the US stock market (on no-volume-lower-highs again) yesterday, I don’t like you buying the US stock market today anymore than I didn’t yesterday.

 

Why?

  1. US DOLLAR – down again this morning (-1.5% in the last 2 weeks and bearish on our long-term TAIL risk duration)
  2. US RATES – after failing @Hedgeye TREND resistance of 2.80% this wk, falling again this morning to 2.72%
  3. GOLD – ripping, alongside the CRB Commodities Index, to fresh new YTD highs of $1308 = +8.8% YTD!

Oh, you don’t like the #InflationAccelerating call because you aren’t long inflation?

 

Capone: “Wanna know something… I like a guy who can use his head for something more than a hatrack.”

 

Yeah.

 

Other than the explicit US #GrowthSlowing signal that has always been Dollar Down + Rates Down = Gold Ripping, what else is going on out there today that has me in such a mood?

  1. JAPAN – Yen breaking out now vs USD and the Nikkei is getting crushed (-3.3% in the last 2 days to -12.4% YTD)
  2. RETAIL SALES – reported yesterday as the worst 1 and 2 year growth rate in 2 years (and everyone blames weather)
  3. RISK RANGES – both the SP500 and VIX risk ranges of 1726-1848 and 13.39-20.41, respectively, are wicked wide

And, btw, #InflationAccelerating in the two things I drink/eat for breakfast every morning has me surly too:

  1. COFFEE = +25.7% YTD
  2. OATS = +17.8% YTD

But, whatever you do, don’t tell me there’s never going to be inflation in this world, ever.

 

Just don’t.

 

Don’t go there because, as the Interrogator in the Valentine’s Day Massacre told Franky Gusenberg, “I’ve got to tell you Frank, you’re not going to make it. Want me to call a preacher?”

 

Yep. For Danny Holland versus one of the best goalies in Yale Hockey history, I am officially recommending prayer.

 

Happy Valentines.

 

Our immediate-term Risk Ranges are now:

 

UST 10yr Yield 2.60-2.80%

SPX 1726-1848

Brent Oil 107.69-110.41 (

NatGas 4.76-5.41

Gold 1272-1311

 

Best of luck out there today,

KM

 

Keith R. McCullough
Chief Executive Officer

 

Valentine's Day Massacre - Chart of the Day

 

Valentine's Day Massacre - Virtual Portfolio


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DARDEN RESTAURANTS HEDGEYE POLL (CORRECTION)

Do you believe that management's plan to spin-off Red Lobster will create value?

 

We certainly have a strong opinion on the matter, but we’d like to hear from you.  CLICK HERE to vote.

 

 

 

Howard Penney

Managing Director



REPLAY PODCAST & SLIDES: IS IT TIME TO BUY BRAZIL?

Earlier today we hosted a conference call to discuss why it may finally be the right time for investors to reallocate capital to Brazil. With the Bovespa Index down -54% in USD terms since peaking in APR ’11, we now think it’s appropriate to explore whether or not the currently distressed prices of Brazilian assets represent real value or if they remain a value trap. Per usual, we concluded the call with a live Q&A session.

 

A brief synopsis of the key takeaways can be found here on our @HedgeyeTV YouTube channel: http://www.youtube.com/watch?v=baUM6Z69FN8.

 

KEY TOPICS INCLUDED

 

  • A review of our bearish thesis and key risks over the next few quarters
  • Scenario analysis on whether or not this is a good time buy
  • Is the bottoming process underway for Petrobras (PBR) and Vale (VALE)?

 

CLICK HERE to access the replay podcast.

 

CLICK HERE to access the associated slide deck (72 slides of in-depth analysis).

 

Please email us if you have any follow-up questions that  you’d like us to address.

 

Have a great evening,

 

DD

 

Darius Dale

Associate: Macro Team



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