THE DAILY OUTLOOK

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%

Equity Sentiment:

  • 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

Commodity/Growth Expectation:

  • 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

Currencies:

  • EURO: 1.30 (-0.1%)  - Trading above the TRADE line
  • DOLLAR: 82.05 (0.1%) - BEARISH formation

Overseas Markets:

  • 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% 

THE DAILY OUTLOOK - levels and trends


Did the US Economy Just “Collapse”? "Worst Personal Spending Since 2009"?

This is a brief note written by Hedgeye U.S. Macro analyst Christian Drake on 4/28 dispelling media reporting that “US GDP collapses to 0.7%, the lowest number in three years with the worst personal spending since 2009.”

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7 Tweets Summing Up What You Need to Know About Today's GDP Report

"There's a tremendous opportunity to educate people in our profession on how GDP is stated and projected," Hedgeye CEO Keith McCullough wrote today. Here's everything you need to know about today's GDP report.

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Cartoon of the Day: Crash Test Bear

In the past six months, U.S. stock indices are up between +12% and +18%.

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GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist

“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.

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Exact Sciences Up +24% This Week... What's Next? | $EXAS

We remain long Exact Sciences in the Hedgeye Healthcare Position Monitor.

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Inside the Atlanta Fed's Flawed GDP Tracker

"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.

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Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

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People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

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UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

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Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

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Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

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An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

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