SAVING EUROPE
CLIENT TALKING POINTS
SAVING EUROPE
Tons of rumors coming out of Europe this morning. But that’s really all you need is one good, juicy rumor to save the day. In this case, it’s that Germany will go out buying unlimited peripheral debt in order to stabilize the Eurozone. Der Spiegel also reported that Germany was looking for way to cap yields on Spanish and Italian debt. This is all pretty ridiculous. Let’s sit back and see what happens. Without a doubt, US equities will respond positively to the news.
BUBBLING CRUDE
WTI crude futures are up on the NYMEX – more than 1.6% as of writing sending oil to $97.60 a barrel. The race to drive oil prices back up is upon us apparently. We never understood the hysteria surrounding why traders and investors want higher food and fuel prices. But one thing is certain: if you get the dollar right, you get a lot of other things right. And with the dollar down this morning, this move in oil makes sense and will continue higher should the dollar drop further.
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ASSET ALLOCATION
Cash: Flat
U.S. Equities: Flat
Int'l Equities: Flat
Commodities: Flat
Fixed Income: Flat
Int'l Currencies: UP
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TOP LONG IDEAS
NIKE INC (NKE)
Nike’s challenges are well-telegraphed. But the reality is that its top line is extremely strong, and the Olympics has just given Nike all the ammo it needs to marry product with marketing and grow in the 10% range for the next 2 years. With margin pressures easing, and Cole Haan and Umbro soon to be divested, the model is getting more focused and profitable.
- 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
LAS VEGAS SANDS (LVS)
LVS finally reached and has maintained its 20% Macau gaming share, thanks to Sands Cotai Central (SCC). With SCC continuing to ramp up, we expect that level to hold and maybe, even improve. Macau sentiment has reached a yearly low but we see improvement ahead.
- TRADE: LONG
- TREND: NEUTRAL
- TAIL: NEUTRAL
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THREE FOR THE ROAD
TWEET OF THE DAY
“We're about due for a $GS super-spike oil note up here.. $255 Brent here we come” -@HedgeyeENERGY
QUOTE OF THE DAY
“It's all right letting yourself go as long as you can let yourself back.” – Mick Jagger
STAT OF THE DAY
$17. The record price of soy beans per bushel as commodity prices shoot higher.