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Notes from CEO Keith McCullough

2 down days for the USD, 2 up days for Global Equities = Correlation Risk

  1. CHINA – not in headline news for the last few weeks but that doesn’t mean China’s growth slowdown (and implications to global growth) cease to exist; Chinese stocks got hammered overnight, closing down -3.3% close to their OCT lows (down -16.9% YTD). Thailand cut rates aggressively (125bps to 2.5%); expect more Asian rate cute (bullish for USD)
  2. EURO – just a pathetic week for European central planners and their currency’s credibility – rally to 1.34 is gone and now we’re testing intermediate-term lows of 1.32 again; bullish for the USD; bearish for Correlation Risk across Global Macro
  3. GOLD – down this morning because the US Dollar is up; this is a new correlation risk that’s developing and was only this high last in Q4 of 2008; immediate-term inverse correlation to USD now = -0.79 (vs TREND of +0.08). Liquidations and redemptions in the hedge fund business are significant and so is the gross and net long position in Gold. Selling what they can vs should.

Month-end is finally out of the way. Not a good month for most things other than the USD and Long-term Treasuries.





MCD: McDonald’s Corporation’s “Monopoly” promotion is the subject of a federal patent infringement suit launched by LaserLock Technologies.  LaserLock initiated the suit in 2010 against WS Packaging Group, one of the largest label converting operations in North America.

BAGL: Einstein Noah Restaurant Group announced the acquisition of Kettleman Bagel Company, a five-store bagel chain in Portland, Oregon.  The acquisition of Kettleman is part of the company's strategic growth plan aimed at strengthening its competitive position within the Pacific Northwest market. 


CAKE: The Cheesecake Factory was reiterated “Equal-weight” by Morgan Stanley following a meeting with management.

THE HBM: MCD, BAGL, CAKE - stocks 1130

Howard Penney

Managing Director

Rory Green