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TODAY’S SET UP

As we look at today’s set up for the S&P 500, the range is 23 points or 1.1% (1,058) downside and 1.1% (1,081) upside.  Equity futures are trading above fair value following Wednesday's declines in the wake of Fed Chairman Bernanke's "unusually uncertain" economic outlook.

SBUX, QCOM, and EBAY posted solid results after the close. Today, Bernanke's testimony will be less a factor, as the focus is on corporate earnings, the weekly jobless figures and June home sales. 

TODAY’S BULLISH EUROPEAN HEADLINES 

  • Eurozone May Industrial New Orders +3.8% m/m vs. consensus +0.0% and prior revised 0.6%
  • UK June retail sales inc. fuel +0.7% m/m vs. consensus +0.5%
  • UK June retail sales inc. fuel +1.3% y/y vs. consensus +1.0%
  • Eurozone July Services PMI 56.0 vs. consensus 55.0 and year ago 55.5
  • Eurozone Jul Manufacturing PMI 56.5 vs. consensus 55.2 and prior 55.6
  • Germany Jul Services PMI 57.3 vs. consensus 54.5 and prior 54.8
  • Germany Jul Manufacturing PMI 61.2 vs. consensus 58.0 and prior 58.4
  • France Jul Services PMI 61.3 vs. consensus 60 and prior 60.8
  • France Jul Manufacturing PMI 53.7 vs. consensus 54.1 vs. prior 54.8
  • France Jul Consumer Confidence (39) vs. consensus (40) vs. prior (39)

THE HEDGEYE GLOBAL MACRO LOOK:

China closed up another 1.1% last night, bringing the four day rally to 5.6%.  Copper is up 7.2% over the last four days.       

Following yesterday’s 1.3% decline in the S&P 500, we only have Materials (XLB), Utilities (XLU) and Consumer Staples (XLP) positive on TRADE with XLU the only sector positive on TREND.  Every sector declined yesterday. 

China closed up another 1.1% last night, bringing the four day rally to 5.6%.  Copper is up 7.2% over the last four days and materials (XLB) is positive on trade – it’s all related!

Treasuries were stronger today on the recovery concerns and expectations for a prolonged period of low interest, according to Fed Chairman Bernanke. 

 

The Consumer Discretionary (XLY) was the worst performing sector yesterday.  The decline was broad-based - the home builders took it on the chin ahead of what we think will be a bearish housing data point this morning.  Notable decliners included MTH (3.3%), HOV (3%), SPF (2.6%) and TOL (2.6%).

On a relative basis, the Industrials (XLI) was the best performing sector yesterday.  TXT was one of the bright spots as both top and bottom-line results for 2Q10 came in ahead of expectations; the company also raised full-year guidance above the Street. Analysts were positive on the strength in manufacturing. 

THE HEDGEYE MACRO TRADE RANGES:

US STRATEGY – UNUSUALLY UNCERTAIN - levels and trends 721

 

US STRATEGY – UNUSUALLY UNCERTAIN - S P

 

US STRATEGY – UNUSUALLY UNCERTAIN - DOLLAR

 

US STRATEGY – UNUSUALLY UNCERTAIN - VIX

 

US STRATEGY – UNUSUALLY UNCERTAIN - OIL

 

US STRATEGY – UNUSUALLY UNCERTAIN - GOLD

 

US STRATEGY – UNUSUALLY UNCERTAIN - COPPER