TODAY’S S&P 500 SET-UP
As we look at today’s set up for the S&P 500, the range is 31 points or 2.1% (1,090) downside and 0.6% (1,121) upside. Equity futures are trading below fair value following Tuesday's inconclusive close which saw the S&P 500 snap a three day winning streak after US Steel provided an uncertain outlook statement.
Today sees a slew of earnings while the Fed's Beige Book and Durable Goods Orders will be the main MACRO focus.
- Advance/Decline Line: -360 (-2235)
- Volume: NYSE 1115 (+9.5%) - Volume is up DoD with negative breadth and but still below LTM average.
- Sector Performance: 5 sectors up/4 sectors down (RECOVERY/REFLATION trade underperforming)
- Market Leading Stocks: Lexmark +8.4%, Du Pont +3.5% and Masco -11.7%, Thermo Fisher -9.4%
- VIX: 23.19 (2.0%) - The VIX is broken on TRADE - BULLISH for stocks
- SPX Put/Call ratio: 1.40 down from 1.70 (low on 07/15/10 of 0.87)
- ABC Consumer confidence declined to -48 from -45
- Bullish sentiment increases to 38.2% from 35.6% in the latest Investor's Intelligence poll
Credit/Economic Market Look:
- TED Spread one-day change: 33.029 to 32.911
- 3-Month T-Bill Yield is at .15% from .14% yesterday
- Yield Curve one-day change: 2.406 to 2.413
- CRB: 266.66 +0.02%
- Oil: 77.50 -1.87%
- Copper: 320.65 (-0.51%) – trading above its TRADE line - BULLISH for growth expectations
- Gold: 1,159 (-2.1%) - Gold has decisively broken the Hedgeye intermediate term TREND line of support (1197); the long term TAIL of support -4.2% lower at 1115
- EURO: 1.30 (-0.1%) - Trading above the TRADE line
- DOLLAR: 82.05 (0.1%) - BEARISH formation
- ASIA - Markets closed sharply higher helped by a string of better than expected corporate earnings including Canon and Nippon Steel. China A-Shares close up another 2.3% last night (up 7 of last 8 days and +12.8% from July 5 YTD low)
- China could jolt markets on Aug. 1 with PMI below 50, Westpac & SocGen analysts say (Bloomberg)
- EUROPE - Major indices have pulled back from opening levels and appear to be waiting for the US open, as the benefit from the Asian markets gives way to some minor profit taking.
- LATIN AMERICA - Major indices are mixed, with Mexico down 0.8%
- MIDDLE EAST - Mostly higher with the UAE trading down another 0.60%