prev

THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – October 15, 2014


As we look at today's setup for the S&P 500, the range is 68 points or 0.94% downside to 1860 and 2.68% upside to 1928.                                                                   

                                                            

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: 1.82 from 1.83
  • VIX closed at 22.79 1 day percent change of -7.51%

 

MACRO DATA POINTS (Bloomberg Estimates):

  • 7am: MBA Mortgage Applications, Oct. 10 (prior 3.8%)
  • 8:30am: Empire Manufacturing, Oct., est. 20.25 (prior 27.54)
  • 8:30am: Retail Sales Advance m/m, Sept., est. -0.1% (pr 0.6%)
  • 8:30am: PPI Final Demand m/m, Sept., est. 0.1% (prior 0.0%)
  • 10am: Business Inventories, Aug., est. 0.4% (prior 0.4%)
  • 10:30am: DOE Energy Inventories
  • 11am: Treasury Budget Statement, Sept., est. +$90b (pr +$75.1b)
  • 11:30am: U.S. to sell $33b 4W bills, $25b 1Y bills
  • 2pm: Federal Reserve releases Beige Book
  • 2pm: ECB’s Draghi speaks in Frankfurt

 

GOVERNMENT:

    • Senate, House out of session
    • Sec. of State Kerry travels to Vienna for meeting with EU High Rep. Catherine Ashton, Iranian Foreign Minister Javad Zarif on nuclear negotiations
    • 8:30am: PepsiCo CEO Indra Nooyi announces nutrition project hosted by Inter-American Development Bank
    • 10am: Supreme Court hears arguments in patent case over generic competition to Teva’s multiple-sclerosis drug Copaxone
    • U.S. ELECTION WRAP: Colo. Races; HRC on Trail; Money Reports Due

 

WHAT TO WATCH:

  • AbbVie Weighing Shire Breakup Sends Inversion Target Shares Down
  • Toyota Recalls 1.75m Autos to Fix Brakes, Fuel Leaks
  • Qualcomm Agrees to Buy U.K. Chipmaker CSR for $2.5b
  • Carnival to Help Build China’s First Cruise Ship as Demand Rises
  • Second Health-Care Worker Tests Positive for Ebola in Texas
  • Lenovo ‘Confident’ of Closing Motorola Mobility Deal This Year
  • Obama Pushes Allies as Doubts Grow on Islamic State Strategy
  • U.K. Unemployment Falls More Than Forecast as Wages Improve
  • ASML Forecasts Quarterly Sales Beating Estimates on Memory Chips
  • BofA Said Hired by Buyout Firms to Sell Turkey Memorial Stake
  • Broker Lobby Group Sees Conflicts in Nasdaq SIP Upgrade Process
  • Trump Casino’s Fate, Union Fight to Be Decided by End of Week

 

AM EARNS:

    • Bank of America (BAC) 7am, $0.32 - Preview
    • BlackRock (BLK) 6:30am, $4.66
    • Charles Schwab (SCHW) 8:45am, $0.24
    • Commerce Bancshares (CBSH) 7am, $0.71
    • IGate (IGTE) 6:09am, $0.52
    • KeyCorp (KEY) 6:30am, $0.26
    • MGIC Investment (MTG) 7am, $0.11 - Preview
    • PNC Financial (PNC) 6:30am, $1.70
    • St Jude Medical (STJ) 7:30am, $0.96 - Preview

 

PM EARNS:

    • American Express (AXP) 4:05pm, $1.37
    • Boston Private Finl (BPFH) 4:05pm, $0.21
    • eBay (EBAY) 4:15pm, $0.67 - Preview
    • El Paso Pipeline (EPB) 4:07pm, $0.39
    • Kinder Morgan (KMI) 4:05pm, $0.32
    • Kinder Morgan Mgmt (KMR) Aft-Mkt, $0.56
    • Las Vegas Sands (LVS) 4:01pm, $0.82
    • Netflix (NFLX) 4:05pm, $0.91 - Preview
    • Platinum Underwriters (PTP) 4pm, $1.32
    • RLI (RLI) 4pm, $0.59
    • Umpqua (UMPQ) 4:05pm, $0.29
    • United Rentals (URI) 4:15pm, $2.08

 

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • Brent Extends Biggest Plunge Since ’11 on Glut; WTI Nears $80
  • OPEC Finding U.S. Shale Harder to Crack as Rout Deepens: Energy
  • Brent Slump Seen Stalling Near $80 as Bear-Market Oil Oversold
  • Gold Imports by India Seen Rising More Than Fourfold Last Month
  • Bugs Join Robots to Overcome Global Copper Shortage: Commodities
  • Bloomberg Commodities Index Falls to Lowest Since July 2009
  • Palm Imports by India Surge for Third Month on Tax-Free Sales
  • Australia, Brazil Seen Taking 90% of Worldwide Iron Ore Trade
  • Copper Falls From Three-Week High on Chinese Inflation Figures
  • Palm Tumbles to Three-Week Low as Crude Oil Slump Reduces Demand
  • Gold Drops a Second Day on Dollar to Lower Demand After Advance
  • Corn Drops From Five-Week High as Drier Weather May Help Harvest
  • Palm Declines to Two-Week Low as Crude Oil Slump Reduces Demand
  • Rio Says Don’t Panic on Iron Ore And Won’t Halt Returns
  • Rubber Drops From Two-Week High as China Data Signal Weak Demand

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


October 15, 2014

October 15, 2014 - Slide1

 

BULLISH TRENDS

October 15, 2014 - Slide2

October 15, 2014 - Slide3

 

 

BEARISH TRENDS

October 15, 2014 - Slide4

October 15, 2014 - Slide5

October 15, 2014 - Slide6 

October 15, 2014 - Slide7

October 15, 2014 - Slide8

October 15, 2014 - Slide9

October 15, 2014 - Slide10

 


THE HEDGEYE MACRO PLAYBOOK

Takeaway: The Hedgeye Macro Playbook is a daily 1-page summary of our core ETF recommendations, investment themes and noteworthy quantitative signals.

CLICK HERE to view the document. In today’s edition, we highlight:

 

  1. Making a minor change to some language in/around TACRM to improve ease of user interpretation (no change to the underlying model, however)
  2. Swapping out domestic mega-cap exposure for the Japanese yen on the long side of our top global macro ideas 

 

Best of luck out there,

 

Darius Dale

Associate: Macro Team


GET THE HEDGEYE MARKET BRIEF FREE

Enter your email address to receive our newsletter of 5 trending market topics. VIEW SAMPLE

By joining our email marketing list you agree to receive marketing emails from Hedgeye. You may unsubscribe at any time by clicking the unsubscribe link in one of the emails.

RETAIL - DEPARTMENT STORE DEEP DIVE/BLACK BOOK ON THURSDAY

Takeaway: In Thursday's Black Book, we dive into the industry's supply/demand balance, real estate profiles, category exposure and e-commerce margins.

Please join us Thursday, October 16th at 11:00 am ET for our Deep Dive on Department Store Fundamentals and Stocks. Relevant tickers: JCP, M, KSS, DDS, JWN, SHLD, TGT, WMT, TJX, and GPS.

 

Key Topics Will Include:

 

1.  What will the Department Store Landscape look like (physically and financially) when we transition into the next economic cycle? This includes looking at the physical supply/demand balance in the industry.

 

2.  Detailed Revenue analysis for all the Department Stores – by category, consumer, and demographic.  Who has the most risk/upside based on where we are in the economic cycle?

 

3.  Margin Sustainability: Who has the most defendable margins and levers to pull in the event of a sales downturn?

 

4.  The importance of Financial Engineering to earnings algorithms.

 

5.  Current Business Trends: Results from our detailed 1,000 consumer survey. This is the 4th iteration of the survey that we started back in 3Q of 2013

  • Visitation statistics
  • Dot.com and Mobile trends
  • Buy Online/Pick Up in Store – does anyone really use this? Which retailers have the competitive advantage?
  • Detailed category analysis – what retailers are top of mind in each category
  • Who wins on price, sales, selection, and quality

6. Real Estate Deep Dive

  • What does the competitive matrix look like across the space
  • Winners &  losers from a demographic and spending vantage point
  • Are department stores over or under-indexed to their target customer?
  • The JCP and SHLD affect – what do more store closures mean for other names in this space

7.  E-commerce – we’ll be releasing a much more in depth look at e-commerce across the retail space in a Black Book due out in the next couple of weeks – but we will preview that work with a focused look on the department store space. Most importantly which retailers have invested the capital needed to drive growth in this channel.

 

Call Details

Toll Free Number:

Direct Dial Number:

Conference Code: 693664#

Materials: CLICK HERE

 


Cartoon of the Day: Crank It Up

Cartoon of the Day: Crank It Up - volume cartoon 10.14.2014

 

As markets are melting down, volume is going up.  Take Monday’s sell-off, for example. Total exchange volume soared 44% compared to its three-month average.

 

SUBSCRIBE TO CARTOON OF THE DAY


#EuropeSlowing: Some Ugly Charts

Takeaway: Here are a half-dozen charts that show just how poorly Europe's economies are faring.

This note was originally published October 14, 2014 at 10:29 in Macro

This market does not trust Draghi’s Drugs! (Draghi is European Central Bank President Mario Draghi.)

 

Below we show recent data points that are supportive our Q4 Macro Theme #EuropeSlowing.  Here’s an update on the latest Eurozone experiment:

  • Draghi’s policy to inflate has only resulted in deflation (France and Italy CPI in September fell 10bps to 0.4% Y/Y and -0.1% Y/Y, respectively)
  • BOTH the periphery and the core are contributing to the regional slowing
  • The gap between Germany’s fiscal policy stance and France and Italy is widening
  • There remains no singular voice from the ECB on the merits of its policy actions to produce sustainable economic growth

We’ll let the recent data from the region’s economic heavyweight speak for itself, #EuropeSlowing:

  • The German Government lowered its GDP forecast (leaked on Friday) to 1.2% in 2014 (vs 1.8% prior); and 1.3% in 2015 (vs 2.0% prior)
  • Germany ZEW Economic Growth Expectations in October hit a 2 year low
  • German Exports in August (down -5.8% M/M) largest fall in more than 5 years
  • German Factory Orders fell -1.3% in August Y/Y
  • German Industrial Production in August weakest reading in more than 5 years
  • German Bunds are making all time lows @ 0.855% and down 101 bps Y/Y

From an investment position, we are recommending shorting French (EWQ) and Italian (EWI) equities and the EUR/USD (FXE).

 #EuropeSlowing: Some Ugly Charts - z. ZEW Germany

 #EuropeSlowing: Some Ugly Charts - z. germnay exports imports

 #EuropeSlowing: Some Ugly Charts - zz. factorders

 #EuropeSlowing: Some Ugly Charts - zz. German Indust

 #EuropeSlowing: Some Ugly Charts - z. Germany 10YR yield

 #EuropeSlowing: Some Ugly Charts - z. cpi falling

 


get free cartoon of the day!

Start receiving Hedgeye's Cartoon of the Day, an exclusive and humourous take on the market and the economy, delivered every morning to your inbox

By joining our email marketing list you agree to receive marketing emails from Hedgeye. You may unsubscribe at any time by clicking the unsubscribe link in one of the emails.

next