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THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – August 5, 2014


As we look at today's setup for the S&P 500, the range is 44 points or 1.19% downside to 1916 and 1.08% upside to 1960.                                              

                                                                                 

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: 2.02 from 2.02
  • VIX closed at 15.12 1 day percent change of -11.22%

 

MACRO DATA POINTS (Bloomberg Estimates):

  • 7:45am: ICSC weekly sales
  • 8:55am: Redbook weekly sales
  • 9:45am: Markit US Services PMI, July final, est. 60.8 (pr 61)
  • 9:45am: Markit US Composite PMI, July final (prior 60.9)
  • 10am: ISM Non-Mfg Composite, July, est. 56.5 (prior 56)
  • 10am: Factory Orders, June, est. 0.6% (prior -0.5%)
  • 10am: IBD/TIPP Economic Optimism, Aug., est 47.3 (prior 45.6)
  • 11:30am: U.S. to sell $40b 4W bills
  • 4:30pm: API weekly oil inventories

 

GOVERNMENT:

    • Senate, House on August recess
    • Africa Summit Day 2:
    • 9am: Commerce Sec. Pritzker, former New York City Mayor Bloomberg deliver opening remarks
    • 9:15am Former President Clinton moderates session including CEOs from GE, DOW, WMT, Dangote Group Shanduka Group
    • 10:15: African Union Chair Nkosazana Clarice Dlamini Zuma
    • 10:20: Treasury Sec. Lew remarks at open of panel featuring African Development Bank President Kaberuka, CEOs or Chairmen from MasterCard, Heirs Holdings, Carlyle Group, Standard Bank
    • 11:05am: World Bank President Kim opens session moderated by National Security Advisor Rice; session includes CEOs from: IBM, KO, BX, Harith Fund Managers, Econet Wireless Founder/Chair
    • 1:50pm: Secretary of State Kerry remarks at Africa future moderated by Charlie Rose; Presidents of Rwanda, Senegal, South Africa, Tanzania, Tunisia participate
    • U.S. ELECTION WRAP: Mich., Kansas Primaries; Defense Donations

 

WHAT TO WATCH:

  • Gannett said to agree to buy rest of Cars.com for $1.8b
  • IBM said to have offered Globalfoundries cash to take chip unit
  • Toyota posts surprise record profit as U.S. SUV sales surge
  • Israel pulls its troops from Gaza as cease-fire under way
  • Telefonica offers $9b for Vivendi’s Brazil unit GVT
  • Euro-area services grew less than initially estimated in July
  • China services expansion stagnates as HSBC gauge drops
  • BMW posts best carmaking profitability in 3 yrs on SUVs
  • GM subprime auto lending draws attention of U.S. investigators
  • Eurozone June retail sales up 0.4% m/m; est. up 0.5% m/m
  • U.K. services growth accelerates to fastest in 8 months
  • Samsung wins back Apple’s advanced chip order, Maeil says
  • Goldman makes changes at hedge fund services unit, WSJ says

 

AM EARNS:

    • Western Refining (WNR) 6am, $1.31
    • Actavis (ACT) 7am, $3.38
    • Aecom Technology (ACM) 7am, $0.64
    • Akorn (AKRX) 7am, $0.20
    • Ameren (AEE) 8am, $0.58
    • Ametek (AME) 7am, $0.59
    • Ansys (ANSS) 7:09am, $0.80
    • Archer-Daniels-Midland (ADM) 7am, $0.76
    • Arcos Dorados (ARCO) 8:30am, $(0.11)
    • Ares Capital (ARCC) 8am, $0.38
    • Bloomin’ Brands (BLMN) 7am, $0.29
    • Brookfield Infrastructure (BIP) 8am, $0.37
    • Cablevision Systems (CVC) 8:30am, $0.17 - Preview
    • Carrizo Oil & Gas (CRZO) 6:30am, $0.67
    • Coach (COH) 7am, $0.53 - Preview
    • Cobalt Intl Energy (CIE) 7am, $(0.19)
    • CVS Caremark (CVS) 7am, $1.10 - Preview
    • Emerson Electric (EMR) 7am, $1.06
    • FirstEnergy (FE) 8:30am, $0.44
    • Gartner (IT) 7am, $0.59
    • Intl Flavors & Fragrances (IFF) 7am, $1.35
    • Liberty Interactive (LINTA) 7:47am, $0.27
    • Liberty Media (LMCA) 7:30am, $0.22
    • Louisiana-Pacific (LPX) 8am, $0.01
    • Magellan Midstream Partners (MMP) 8:30am, $0.71
    • MGM Resorts Intl (MGM) 8am, $0.10
    • Monster Worldwide (MWW) 7:30am, $0.09
    • Motorola Solutions (MSI) 7am, $0.62
    • Northwest Natural Gas (NWN) 6:30am, $0.09
    • Och-Ziff Capital Mgmt (OZM) 7:30am, $0.18
    • Office Depot (ODP) 7am, $(0.02)
    • Quicksilver Resources (KWK) 7am, $(0.06)
    • Regeneron Pharmaceuticals (REGN) 6:30am, $2.31 - Preview
    • TransDigm Group (TDG) 7:30am, $1.98
    • Vantage Drilling (VTG) 6am, $0.05
    • Vulcan Materials (VMC) 8am, $0.38
    • Westlake Chemical (WLK) 6am, $1.47
    • WP Carey (WPC) 7:30am, $0.63
    • Zoetis (ZTS) 7am, $0.38 - Preview

 

     PM EARNS:

    • Acadia Pharmaceuticals (ACAD) 4:01pm, $(0.13)
    • Activision Blizzard (ATVI) 4:07pm, $0.02
    • Cimarex Energy (XEC) 4:45pm, $1.71
    • Continental Resources (CLR) 6:12pm, $1.70
    • Diamondback Energy (FANG) 4:20pm, $0.68
    • DryShips (DRYS) 4:02pm, $(0.06)
    • EOG Resources (EOG) 4:11pm, $1.38
    • Expeditors Intl (EXPD) 4:30pm, $0.47
    • FireEye (FEYE) 4:05pm, $(0.60)
    • First Solar (FSLR) 4:01pm, $0.33 - Preview
    • Frontier Communications (FTR) 4:01pm, $0.05
    • Groupon (GRPN) 4:04pm, $0.01
    • Jazz Pharmaceuticals (JAZZ) 4:05pm, $1.92
    • KAR Auction Services (KAR) 4:15pm, $0.37
    • Liberty Global (LBTYA) 5:12pm, $0.03
    • Oasis Petroleum (OAS) 8:24pm, $0.74
    • Oneok (OKE) 4:10pm, $0.37
    • Saputo (SAP CN) 12:11pm, C$0.77
    • Scientific Games (SGMS) 4:01pm, $(0.28)
    • Take-Two Interactive Software (TTWO) 4:05pm, $(0.27)
    • Trimble Navigation (TRMB) 4:05pm, $0.40
    • Walt Disney (DIS) 4:15pm, $1.16 - Preview
    • WebMD Health (WBMD) 4pm, $0.19
    • WPX Energy (WPX) 4:20pm, $(0.06)
    • Zillow (Z) 4:30pm, $(0.04)
    • Zogenix (ZGNX) 4:01pm, $(0.16)

 

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • WTI Trades Near 3-Day High Before U.S. Supply Data; Brent Steady
  • Baconholics Undeterred by 30-Year High Pig Prices: Commodities
  • Money Managers Were Net-Long Copper on Aug. 1 in LME Report
  • Gold Rebounds on Speculation of Demand With Prices Below $1,300
  • Soybeans Drop as Rains Forecast for Midwest Seen Easing Dryness
  • Lead Declines as Gauge of Chinese Services Misses Projections
  • BullionVault’s Gold Buyer Index Rebounds as Holdings at Record
  • Coffee Rebounds on Speculation Prices Fell Too Far; Cocoa Rises
  • China Said to Add 10,000 Metric Tons to Rare Earths Stockpiles
  • CME to Start European Gas Futures as Trayport Stays Independent
  • Parnon, Arcadia to Pay $13 Million in Oil Price-Rigging Suit
  • Sugar Researcher Kingsman Retiring After 37 Years in Industry
  • Citi Bearish on Aluminum as Chinese Product Exports Damp Demand
  • Colorado Fracking Opponents Poised to Lose Local Control Battle

 

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

 


August 5, 2014

August 5, 2014 - Slide1

 

BULLISH TRENDS

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August 5, 2014 - Slide3

August 5, 2014 - Slide4

August 5, 2014 - Slide5

August 5, 2014 - Slide6

 

BEARISH TRENDS

August 5, 2014 - Slide7

August 5, 2014 - Slide8

August 5, 2014 - Slide9

August 5, 2014 - Slide10

August 5, 2014 - Slide11


INVITE | New Best Idea

Dear Restaurant Subscribers,

 

We’re hosting a series of calls next week, including an expert call focused on the organic space and a new Best Idea short call (with Black Book) on a well-liked organic name.

 

If you have any interest in attending one, or both, of these events please let us know.

 

Howard Penney

Managing Director

 

Fred Masotta

Analyst


Daily Trading Ranges

20 Proprietary Risk Ranges

Daily Trading Ranges is designed to help you understand where you’re buying and selling within the risk range and help you make better sales at the top end of the range and purchases at the low end.

(HEDG)EYE-CANDY: Quantifying the QM Drag

The new Qualified Mortgage (QM) regulations that went into effect on January 10th tightened mortgage underwriting standards and were broadly expected to compress credit availability – particularly at the lower end and across non-conforming loan categories. 

 

While the prevailing expectation was for some measure of credit tightening, there’s been a general dearth of hard data on the impact. 

 

We received some harder quant today with the release of the Fed’s 3Q Senior Loan Officer Survey (Here) which included a set of special questions on the effects on the approval rates for home-purchase loans of the Ability-to-Repay and Qualified Mortgage Standards under the Truth in Lending Act

 

Bottom Line:  ~30% of banks indicated that ATR/QM rules have reduced approval rates for borrowers across the FICO score spectrum while ~50% reported reduced approval rates across Jumbo and Nontraditional mortgage loans. 

 

In short, the new regulatory provisions are, indeed, dragging on loan approval rates and residential real estate transaction volumes by extension.  We expect that drag to continue to impact the reported housing data at least until we annualize the implementation in early 2015. 

 

(HEDG)EYE-CANDY: Quantifying the QM Drag - QM impact

 

(HEDG)EYE-CANDY: Quantifying the QM Drag - QM Summary

 

 

Joshua Steiner, CFA

 

Christian B. Drake


Real Conversations with Neil Howe, Historian and Author of "The Fourth Turning"

Hedgeye CEO Keith McCullough sits down with author and historian Neil Howe in our latest edition of Real Conversations. 

 

 


Invite: Inside the Organic Food Industry & New Best Idea Call

We are adding SHORT Hain Celestial Group (HAIN) to our Hedgeye Best Ideas list.

 

We will also be hosting two conference calls focused on the organic space of the food industry next week.

1. Thought Leader Discussion

The first conference call will be an expert call on Tuesday, August 12th, 2014 at 1pm EST and will feature guest speaker Bob Burke, Principal at Natural Products Consulting Group

 

Since 1998, Bob Burke has provided assistance in bringing natural, organic and specialty products to market across most classes of trade. This includes work in strategic planning, writing sales, marketing and business plans, building distribution, broker selection and management, organizational development and compensation, strategic options, financing, branding, trade spending and assistance around M&A, due diligence and venture strategy groups.  He is also the co-author of the Natural Products Field Manual, 6th Edition and The Sales Manager’s Handbook. Prior to consulting, Bob was with Stonyfield Farm Yogurt for 11 years as Vice President, Sales & Corporate Development.

 

During the call, Mr. Burke will focus on:

  • The state of the organic industry
  • GMO labeling and its impact on the food industry and supply chain
  • Thoughts on publicly traded organic stocks

2. Best Idea Call

The second conference call will be a Best Idea call on Thursday, August 14th, 2014 at 1pm EST.

 

The organic food industry is the only place in the consumer staples sector that investors can find real growth.  That being said, the last five years have been great for organic stocks – especially HAIN.  The past 12-months, however, have been more challenging with evidence mounting that industry headwinds will keep some stocks within the organic segment under intense pressure.  With HAIN being the 700 pound gorilla in the room, it has the potential to feel the most pain.

We’ve recently seen early signs of maturation in the organic segment of the food space.  This is despite several companies seeing above-average organic volume growth. 

 

Our call on HAIN will focus on the following issues:

  • Organic segment maturation
  • Acquisition fatigue – the “roll up” story is looking tired
  • Brand management and lack of disclosure
  • Slowing top line trends
  • Margin pressure
  • Signs of financial stress
  • Positive sentiment
  • Frothy valuation

 

If you would like to attend one, or both, of these events please contact .

 

Howard Penney

Managing Director

 

Matt Hedrick

Associate

 

Fred Masotta

Analyst

 


investing ideas

Risk Managed Long Term Investing for Pros

Hedgeye CEO Keith McCullough handpicks the “best of the best” long and short ideas delivered to him by our team of over 30 research analysts across myriad sectors.

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