• It's Here!

    Etf Pro

    Get the big financial market moves right, bullish or bearish with Hedgeye’s ETF Pro.

  • It's Coming...

    MARKET EDGES

    Identify global risks and opportunities with essential macro intel using Hedgeye’s Market Edges.

CLIENT TALKING POINTS

THE BERNANK

ADP numbers aside, everyone will truly be focused on the Federal Open Market Committee (FOMC) minutes and the language the Fed uses. Expect low volumes until the details are out; people want to know if we’re getting another dose of QE or not. If we do, gold and oil will rip to the upside. If not, expect King (US) Dollar to make an appearance. We’re of the belief that QE slows growth and simply hasn’t been working. Swallowing a bitter pill is difficult but necessary sometimes. Let’s see what Bernanke has on his mind later.

SOMEBODY GET ME A DOCTOR

Doctor Copper is back in play this morning. The #GrowthSlowing case in China does not bode particularly well for this commodity but ultimately, the fate of price lies in the hands of Ben Bernanke. The Federal Reserve Chairman has proven that he is willing to do anything to buoy commodity and equity markets, even if the rapid inflation includes feeling the heat at the pump and your local grocer.

GEITHNER THE GREAT

Tim Geithner has been making the rounds around the world, meeting with central planners cut from the same kind of cloth has he is. By that, we mean people who aren’t afraid of a bailout or five. He seems to forget that inflation is NOT growth. Per Keith in this morning’s Early Look:

US Consumption represents the 71% that I don’t hear the Democrats talking about inasmuch as I didn’t hear the Republicans talking about it under Bush. That’s the 71% of the US Economy (GDP). And it’s been getting jammed by the likes of Bernanke and Geithner since at least 2006. Policies to debauch the Dollar and inflate oil prices at the pump are a colossal failure of Keynesian sense.”

Isn’t the global economy just peachy?

_______________________________________________________

ASSET ALLOCATION

Cash                Flat                        U.S. Equities:   DOWN

Int'l Equities:  Flat                        Commodities:   Flat

Fixed Income: UP                         Int'l Currencies: Flat

 

_______________________________________________________

TOP LONG IDEAS

JACK IN THE BOX (JACK)

This company is transitioning from cash burn to $75mm annual free cash flow generation thanks to completion of a reimaging program and refranchising of JIB units. Qdoba is the leverage; a maturing and growing store base will bring higher margins. We see 8.5% upside over the next 6-9 months.

  • TRADE: LONG
  • TREND: LONG
  • TAIL:     LONG            

FIFTH & PACIFIC COMPANIES (FNP)

The former Liz Claiborne (LIZ) is on the path to prosperity. There’s a fantastic growth story with FNP. The Kate Spade brand is growing at an almost unprecedented clip. Save for Juicy Couture, the company has brands performing strongly throughout its entire portfolio. We’re bullish on FNP for all three durations: TRADE, TREND and TAIL.

  • TRADE: LONG
  • TREND: LONG
  • TAIL:     LONG

LIFEPOINT HOSPITALS (LPNT)

We continue to expect outpatient utilization to pick up in 2H12 alongside stabilization in acuity with ortho and cardiac/ICD volumes supporting both pricing and inpatient admissions growth. Births should serve as a tailwind into year-end, recent and prospective acquisitions offer some upside to 2012/13 numbers and the in place repo offers some earnings flexibility. With European and Asian growth slowing, we like targeted domestic revenue exposure as well.

  • TRADE: NEUTRAL
  • TREND: LONG
  • TAIL:     LONG

  

_______________________________________________________

 

THREE FOR THE ROAD

TWEET OF THE DAY

“BREAKING: US mortgage demand (MBA weekly mortgage applications) falls for the 3rd consecutive wk (-2.3% wk-over-wk) $XLF” -@KeithMcCullough

QUOTE OF THE DAY

“It is nobler to declare oneself wrong than to insist on being right - especially when one is right.” - Friedrich Nietzsche

STAT OF THE DAY

Chinese PMI fell to 50.1 in July from 50.2 in June, falling below economists’ consensus estimate of 50.5.