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REPLAY AND PODCAST: 3Q12 MACRO THEMES AND PRESENTATION

Earlier today, the Hedgeye Macro Team, led by CEO, Keith McCullough, and DOR, Daryl Jones, hosted our 3Q12 Macro Themes Call. 

  

Topics included:  

  • Growth Slowing's Slope - Our fundamental view is that growth will come in lower than expectations across a collection of major economies - including the U.S. We refute the notion of the U.S. decoupling and will present the main indicators that signal a higher probability of equities crashing from here. 
  • The Cliff - We analyze the assumptions embedded in consensus/CBO forecasts regarding the "fiscal cliff" and offer our view on how heightening uncertainty regarding this event should impact global financial markets. Further, we discuss the question: will slower domestic growth pull forward the debt ceiling debate and introduce uncertainty on a fiscal cliff resolution? 
  • Obama vs Romney - As elections approach we evaluate the policy impact on the broader economy based on the victor. Could the U.S. look more like Europe if Obama wins? And what asset classes stand to outperform based on the next president?  

To access the presentation materials, please click on the following link: "Q3 MACRO THEMES AND PRESENTATION".

 

To access the replay podcast, please copy/paste the following link into the URL of your browser: https://app.hedgeye.com/feed_items/21258-q3-macro-themes. NOTE: You must be logged into www.hedgeye.com for complete access. Email sales@hedgeye.com if you require a refreshed password.

 

ABOUT HEDGEYE

Hedgeye Risk Management is a leading independent provider of real-time investment research. Focused exclusively on generating and delivering actionable investment ideas, the firm combines quantitative, bottom-up and macro analysis with an emphasis on timing. The Hedgeye team features some of the world's most regarded research analysts - united around a vision of independent, uncompromised real-time investment research as a service.

 

Please contact if you have any questions.

  

Regards,

 

The Hedgeye Macro Team


HedgeyeRetail Visual: Athletic FW & Apparel - Solid Start to July

Athletic Footwear and Apparel sales accelerated into the first week of July. The month started off strong, on top of tough compares last year. Starting next week, both apparel and footwear yy comparisons become significantly more favorable. Underlying fundamentals would need to seriously erode in order to show disappointing headline results for the duration of the summer. 

 

HedgeyeRetail Visual: Athletic FW & Apparel - Solid Start to July - Footwear and apparel 1 yr

 

HedgeyeRetail Visual: Athletic FW & Apparel - Solid Start to July - FW app 2 yr


CHART(S) DU JOUR: MPEL PHILIPPINES OPPORTUNITY

Philippines opportunity underappreciated by investors

 

  • Details are scarce but we think MPEL will invest between US$300-580 million and procure a management fee
  • The phase one construction cost may be around US$700 million with any additional hotel towers/amenities likely funded almost exclusively by MPEL
  • As can be seen from the chart, MPEL generates positive shareholder value if the project generates EBITDA north of $125 million.  Resorts World Manila – the only existing integrated casino resort in the Philippines – generates annualized EBITDA over US$300 million.

 

CHART(S) DU JOUR:  MPEL PHILIPPINES OPPORTUNITY - phil2


Daily Trading Ranges

20 Proprietary Risk Ranges

Daily Trading Ranges is designed to help you understand where you’re buying and selling within the risk range and help you make better sales at the top end of the range and purchases at the low end.

Notes From Our Q3 Macro Call

Notes From Our Q3 Macro Call - Q3MACRO Slide1

 

 “Under capitalism, man exploits man, under communism, it’s just the opposite.” –John Kenneth Galbraith

 

Q3 Themes:                           

Inflation trades are over. Bubbles will continue to pop.

 

Growth Slowing: It’s about getting the slope of growth right. Get that right, you get a lot of other things right. People need to see growth. Short industrials since March 12.

 

 

Notes From Our Q3 Macro Call - Q3MACRO Slide2

 

 

The question is: are you bearish enough on growth?

 

Why not $60 oil? Brent bearish against all 3 durations. USD Index to 90s? Highly unlikely. Keith thinks it could happen. At $60 oil, I’ll be really bullish.

 

SPX hasn’t broken 1286 tail line. If you break 1286, you goto the 1100 line and get really bearish. Trade the range up to 1365.

 

Gold is on life support. Is the Fed out of bullets? We need to know the answer to this question. Gold is addicted to quantitative easing and expectations. If the USD Index continues higher, watch out for $1100 gold. A lot of hedge funds are caught up in gold and the GLD ETF and it does not bode well for them.

 

The Fiscal Cliff has two parts. Spending cuts and tax hikes have perpetuated The Cliff. Politicians manage career risk for themselves.

 

 

Notes From Our Q3 Macro Call - Q3MACRO Slide3

 

 

The US debt growth will increase if The Cliff is resolved poorly. If the can is kicked down the road, US will look like France. Congress needs to avoid massive tax increases, negotiate another debt ceiling compromise. Good luck with that.

 

Get rid of Bernanke, you’ll see stocks rip. Definitely not priced in that Romney could win the presidency. Obama separating himself from Bernanke could win him the election. Not likely, though.

 

More debt will not bring growth. They need to get a handle on things in Europe. We’re very low with the EUR/USD now. It could even go to parity.

 

LIE-BOR will disrupt the entire industry.

 

 

Notes From Our Q3 Macro Call - Q3MACRO Slide4

 

 

If you’d like access to this morning’s Q3 Big Macro Themes call, please email sales@Hedgeye.com.

 


BWLD: Upside Surprise

We have generally been bearish on Buffalo Wild Wings (BWLD) for some time now for multiple reasons. Be it the inflation risk associated with the cost of wings or an expectation of weaker same store sales, we were generally bearish on the stock…until yesterday.

 

A similar wings-and-beer chain called Wingstop that has 600 units across 31 states posted strong same-restaurant sales of +12.6% for the second quarter. Over the last two years, BWLD has been highly-correlated to Wingstop in terms of same-restaurant averages. This surprise move to the upside has us backing off the bearish tone we originally had. The current consensus the Street has on BWLD is 6%. We expect that to get blown out of the water as it’d require a complete reversal of the Wingstop correlation, which we don’t see happening. The chart below really gives you a feel for what to expect.

 

 

BWLD: Upside Surprise  - BWLD SSS


DIAL IN & MATERIALS: 3Q12 MACRO THEMES AND PRESENTATION

Valued Client,

  

5-10 minutes prior to the 11AM EST start time please dial:

 

(Toll Free) or (Direct)

Conference Code: 142354#

  

Materials: "Q3 MACRO THEMES AND PRESENTATION"

                  

To submit questions for the live Q&A, please email

 

******************************************************************************   

 

"Q3 MACRO THEMES AND PRESENTATION"

 

This Wednesday, July 11th at 11am EST, the Hedgeye Macro Team, led by CEO, Keith McCullough, and DOR, Daryl Jones, will be hosting our 3Q12 Macro Themes Call.    

  

Topics will include:  

  • Growth Slowing's Slope - Our fundamental view is that growth will come in lower than expectations across a collection of major economies - including the U.S. We refute the notion of the U.S. decoupling and will present the main indicators that signal a higher probability of equities crashing from here. 
  • The Cliff - We analyze the assumptions embedded in consensus/CBO forecasts regarding the "fiscal cliff" and offer our view on how heightening uncertainty regarding this event should impact global financial markets. Further, we discuss the question: will slower domestic growth pull forward the debt ceiling debate and introduce uncertainty on a fiscal cliff resolution? 
  • Obama vs Romney - As elections approach we evaluate the policy impact on the broader economy based on the victor. Could the U.S. look more like Europe if Obama wins? And what asset classes stand to outperform based on the next president?  

 

ABOUT HEDGEYE

Hedgeye Risk Management is a leading independent provider of real-time investment research. Focused exclusively on generating and delivering actionable investment ideas, the firm combines quantitative, bottom-up and macro analysis with an emphasis on timing. The Hedgeye team features some of the world's most regarded research analysts - united around a vision of independent, uncompromised real-time investment research as a service.

 

Please contact if you have any questions.

  

Regards,

 

The Hedgeye Macro Team


Hedgeye Statistics

The total percentage of successful long and short trading signals since the inception of Real-Time Alerts in August of 2008.

  • LONG SIGNALS 80.28%
  • SHORT SIGNALS 78.51%
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