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July 24, 0214

July 24, 0214 - 1

 

BULLISH TRENDS

July 24, 0214 - 2

July 24, 0214 - 3

July 24, 0214 - 4

July 24, 0214 - 5

July 24, 0214 - 6

July 24, 0214 - 7

 

 

BEARISH TRENDS

July 24, 0214 - 8 

July 24, 0214 - 9

July 24, 0214 - 10

July 24, 0214 - 11


THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – July 24, 2014


As we look at today's setup for the S&P 500, the range is 28 points or 1.16% downside to 1964 and 0.25% upside to 1992.             

                                                                                                                  

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: 2.01 from 2.00
  • VIX closed at 11.52 1 day percent change of -5.88%

 

MACRO DATA POINTS (Bloomberg Estimates):

  • 8:30am: Init. Jobless Claims, July 19, est. 307k (prior 302k)
  • Continuing Claims, July 21, est. 2.510m (prior 2.707m)
  • 9:45am: Bloomberg Consumer Comfort, July 20 (prior 37.5)
  • 9:45am: Markit US Mfg PMI, July prelim, est. 57.5 (prior 57.3)
  • 10am: New Home Sales, June, est. 475k (prior 504k)
  • 10:30am: DOE Energy Inventories
  • 11am: Kansas City Fed Mfg Activity, July, est. 6 (prior 6)
  • 1pm: U.S. to sell $15b 10Y TIPS

 

GOVERNMENT:

    • 7:30am: RNC’s Priebus speaks at Nat’l Urban League Conf.
    • 9:30am: House Veterans Affairs Cmte hears from Acting VA Secretary Sloan Gibson on restoring agency trust
    • 10am: House Rules Cmte considers resolution providing authority to sue President Obama
    • 11:30am: House Speaker John Boehner holds press briefing
    • 12pm: Senate and House Democrats holds news conference to call on Congress to raise national minimum wage
    • U.S. ELECTION WRAP: Georgia Turnout; Ads; Walsh’s Thesis

 

WHAT TO WATCH:

  • Dimon, JPMorgan board win dismissal of investor Madoff suit
  • SEC sends McGraw Hill Wells notice on CMBS graded by S&P
  • Hamas says no sign of breakthrough in Gaza cease-fire talks
  • FAA ends ban on U.S. airlines’ flights to Israel’s airport
  • Bombardier to cut 1,800 jobs amid struggle to sell CSeries jet
  • Wal-Mart told by Delaware court to provide bribery probe files
  • Euro-area PMI surveys signal economic activity is picking up
  • Nokia boosts margin forecast after earnings beat ests.
  • Unilever 2Q underlying sales growth misses estimates
  • Reckitt Benckiser said to move toward spinoff of Suboxone unit
  • Record student-loan debt prompts Treasury to stem defaults
  • House Rules Cmte considers lawsuit against President Obama

 

AM EARNS:

    • 3M (MMM) 7:30am, $1.91
    • Airgas (ARG) 7:30am, $1.18
    • Alaska Air Group (ALK) 6:01am, $1.11
    • Alexion Pharmaceuticals (ALXN) 6:30am, $1.07 - Preview
    • American Airlines (AAL) 8am, $1.96 - Preview
    • AmerisourceBergen (ABC) 7am, $0.92 - Preview
    • BankUnited (BKU) 7:30am, $0.45
    • Bemis (BMS) 7am, $0.64
    • Boston Scientific (BSX) 7am, $0.19 - Preview
    • Bristol-Myers Squibb (BMY) 7:30am, $0.45 - Preview
    • Brunswick (BC) 7:39am, $0.91
    • Cameron Intl (CAM) 7:30am, $0.87
    • Caterpillar (CAT) 7:30am, $1.51 - Preview
    • Celgene (CELG) 7:33am, $0.89 - Preview
    • CMS Energy (CMS) 8am, $0.27
    • Coca-Cola Enterprises (CCE) 7:30am, $0.88 - Preview
    • Dana Holding (DAN) 7am, $0.51
    • Diamond Offshore Drilling (DO) 6am, $0.56 - Preview
    • DR Horton (DHI) 7am, $0.49 - Preview
    • Dr Pepper Snapple (DPS) 8am, $0.91 - Preview
    • Dunkin’ Brands (DNKN) 6am, $0.47
    • Eli Lilly & Co (LLY) 6:30am, $0.65 - Preview
    • Encana (ECA CN) 6am, $0.24 - Preview
    • EQT (EQT) 7am, $0.85
    • FLIR Systems (FLIR) 7:30am, $0.34
    • Ford Motor Co (F) 6:30am, $0.36 - Preview
    • General Motors (GM) 7:35am, $0.59 - Preview
    • Gentex (GNTX) 9:15am, $0.47
    • Graphic Packaging (GPK) 7:30am, $0.17
    • Hershey (HSY) 7am  $0.76
    • Husky Energy (HSE CN) 7am, C$0.70 - Preview
    • Jarden (JAH) 7:05am, $0.90
    • JetBlue Airways (JBLU) 7:30am, $0.19
    • KKR (KKR) 8am, $0.65
    • Lazard (LAZ) 7am, $0.57
    • Loblaw (L CN) 6:30am, C$0.67 - Preview
    • Marriott Vacations (VAC) 8am, $0.75
    • NASDAQ OMX Group (NDAQ) 7am, $0.68
    • National Penn Bancshares (NPBC) 6:50am, $0.18
    • Noble Energy (NBL) 7:27am, $0.79
    • Nucor (NUE) 9am, $0.40 - Preview
    • Patterson-UTI Energy (PTEN) 6am, $0.32
    • Pinnacle Entertainment (PNK) 6:30am, $0.46
    • Popular (BPOP) 7am, $0.70
    • Potash of Saskatchewan (POT CN) 6am, $0.45 - Preview
    • Precision Drilling (PD CN) 6am, C$(0.00) - Preview
    • PulteGroup (PHM) 6:30am, $0.25 - Preview
    • Quest Diagnostics (DGX) 7am, $1.06
    • Raytheon (RTN) 7am, $1.59 - Preview
    • Realty Income (O) 9:15am, $0.23
    • Reliance Steel & Aluminum (RS) 8:50am, $1.38
    • Rogers Communications (RCI/B CN) 6:50am, C$0.84 - Preview
    • Royal Caribbean Cruises (RCL) 8:36am, $0.53
    • Sigma-Aldrich (SIAL) 8am, $1.10
    • Southwest Airlines (LUV) 6:30am, $0.61
    • Starwood Hotels & Resorts (HOT) 6am  $0.76
    • Supervalu (SVU) 8am, $0.17 - Preview
    • T Rowe Price (TROW) 7:30am, $1.12
    • Under Armour (UA) 7am, $0.07 - Preview
    • Union Pacific (UNP) 8am, $1.43
    • United Continental (UAL) 7:30am, $2.19 - Preview
    • USG (USG) 8:30am, $0.42
    • Wyndham Worldwide (WYN) 6:30am, $1.14
    • Zimmer Holdings (ZMH) 7am, $1.49

 

PM EARNS:

    • Align Technology (ALGN) 4pm, $0.39
    • Altera (ALTR) 4:15pm, $0.37
    • Amazon.com (AMZN) 4:05pm, $(0.15) - Preview
    • Baidu (BIDU) 4:30pm, $8.66
    • Cerner (CERN) 4:01pm, $0.40 - Preview
    • Chicago Bridge & Iron (CBI) 4:01pm, $1.28
    • Chubb (CB) 4:02pm, $1.90
    • CR Bard (BCR) 4:05pm, $2.01
    • Deckers Outdoor (DECK) 4:05pm, $(1.29)
    • Flextronics Intl (FLEX) 4:01pm, $0.23
    • Freescale Semiconductor (FSL) 4:05pm, $0.37
    • Ingram Micro (IM) 4:04pm, $0.52
    • KLA-Tencor (KLAC) 4:15pm, $0.86
    • Leggett & Platt (LEG) 4:05pm, $0.46
    • Maxim Integrated (MXIM) 4:01pm, $0.47
    • NetSuite (N) 4:08pm, $0.03
    • Olin (OLN) 5:05pm, $0.45
    • Pandora Media (P) 4:02pm, $0.03
    • Principal Financial (PFG) 4pm, $1.01
    • Regal Entertainment (RGC) 4:01pm, $0.27
    • Republic Services (RSG) 4:05pm, $0.49
    • RF Micro Devices (RFMD) 4pm, $0.17
    • Riverbed Technology (RVBD) 4:05pm, $0.26
    • SBA Communications (SBAC) 4:01pm, $0.02
    • Sensient Technologies (SXT) 5:29pm, $0.79
    • SolarWinds (SWI) 4:01pm, $0.37
    • Starbucks (SBUX) 4:05pm, $0.66 - Preview
    • Stericycle (SRCL) 4:02pm, $1.03
    • Swift Transportation (SWFT) 4:02pm, $0.33
    • Tempur Sealy Intl (TPX) 4:05pm, $0.41 - Preview
    • Universal Health (UHS) 5:01pm, $1.25
    • Validus (VR) 4:39pm, $1.47
    • VeriSign (VRSN) 4:05pm, $0.65
    • Visa (V) 4:05pm, $2.10

 

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • Trafigura Unit Seeks to Limit Metals Liability at Qingdao Port
  • Cotton Crop in India Set for Record as Farmers Shun Oilseeds
  • Coffee Growers in Vietnam Seen Harvesting Bigger Crops on Yields
  • Butter at 16-Year High as U.S. Exports Cut Reserves: Commodities
  • Potash Corp. Raises Profit Forecast as Fertilizer Buyers Return
  • Gold Declines to One-Week Low as U.S. Outlook Curbs Haven Demand
  • Japan-Indonesia Power Plant Said to Miss Finance Deadline Again
  • Rebar Retreats to Five-Week Low in Shanghai as Iron Ore Slumps
  • WTI Oil Declines After U.S. Gasoline Supplies Rise; Brent Steady
  • Palladium Gain Sets Up Platinum Switch in Cars: Chart of the Day
  • India to Sell 25% of State Wheat Stockpiles to Cool Prices
  • Albany Nears Oil-Hub Status as 100-Car Trains Jam Port: Freight
  • Palm Oil Climbs From 11-Month Low as Soybeans Extend Rebound
  • Australian Southeast Seen Drier as El Nino Predicted for Harvest

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


FLASHBACK | Rickards: 'Everything That Was Wrong In 2008 Is Worse Today'

Controversial best-selling author James Rickards sits down with Hedgeye CEO Keith McCullough and explains why he believes 2014 is worse than 2008.


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This indispensable trading tool is based on a risk management signaling process Hedgeye CEO Keith McCullough developed during his years as a hedge fund manager and continues to refine. Nearly every trading day, you’ll receive Keith’s latest signals - buy, sell, short or cover.

YUM: LOSING FAITH

We are removing long YUM from our Investment Ideas list.

 

We like YUM for many reasons, including its strong management team, its asset-light model and its exposure to emerging markets.  We really liked YUM, however, due to its easy same-store sales comparisons in China and its ability to deliver 40%+ operating profit growth in the region in 2014.  We thought YUM was ready to turn things around in China and we made it explicitly clear that our bull thesis hinged on this.  Unfortunately, we no longer believe this to be the case.

 

On Sunday, news hit that the Shanghai FDA launched an investigation into meat supplier Husi Food (Osi Group Inc.) after reports surfaced alleging the firm of selling expired meat products.  YUM is only one of several Western food companies linked to Husi (MCD, SBUX, BKW highlight others), but it is by far the most vulnerable to this negative event, with approximately 6,400 restaurants in China.  Everyone knows what happened the last time YUM had a food issue and, the fact of the matter is, Chinese consumers are still fragile.  YUM had just begun regaining their trust.

 

All told, this is a huge blow to the company, no matter how they try to spin it.  Today, the South China Morning Post published a disturbing report, featuring a Sina survey (with up to 25,000 respondents), that indicated severe damage has been done.  According to the article:

 

"77 percent of people in the poll said they believed the affected Western fast-food restaurant brands had been aware of Husi's faulty practices.  Also 69 percent said they would no longer dine at the restaurants run by the Western companies."

 

It is pretty clear, to us, that YUM will once again face an uphill battle in its most important region.  Are we overreacting to this news?  Maybe.  But we don't recommend stocks, long or short, that we lack conviction in.  It is now unlikely YUM will hit its numbers this year and management may have hinted at that on the 2Q14 earnings call by guiding down FY14 same-store sales estimates in China.  We're much happier on the sidelines, at this point, because something tells us this won't be the last we hear of this episode.

 

We've previously pegged YUM shares at a fair value range of $90 to $100.  This estimate assumed a full-blown recovery in China.  We don't see this happening, for a while, and expect shares to muddle along similar to the way they did for the majority of 2013.

 

Call with questions.

 

Howard Penney

Managing Director

 

Fred Masotta

Analyst


MACAU VISITATION STATS WEAKER

Chart Du Jour:  June mass revenue growth and visitation seem to have begun their descent – in-line with our mass deceleration Macau thesis.


  • June Mass growth was below expectations at +27% and with the release of the Macau visitation figures today, we can say the same about visitation
  • As analysts continue to eschew VIP in favor of mass – emphasizing 30% growth rates in 2H 2014 – we take the other side.  Relative to sentiment, VIP is starting to look more stable while mass appears in deceleration mode.
  • We outlined our mass deceleration thesis in our 06/13/2014 note “MACAU: HANDICAPPING MASS DECELERATION”.  We reiterate our positive long term outlook for Macau but caution investors that YoY mass revenue growth could decelerate into the mid to high teens by year end.  Indeed, the deceleration appears to have already begun.

 MACAU VISITATION STATS WEAKER - macau visitation

 

 


Cartoon of the Day: Good As Gold

Takeaway: Unless an ideological change occurs at the Fed, the predictable monetary policy response to growth slowing data points will continue.

Cartoon of the Day: Good As Gold - Gold cartoon 07.23.2014


Hedgeye Statistics

The total percentage of successful long and short trading signals since the inception of Real-Time Alerts in August of 2008.

  • LONG SIGNALS 80.64%
  • SHORT SIGNALS 78.61%
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