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CLIENT TALKING POINTS
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In the days leading up to last night’s presidential debate, there was much a stir about the choice of Candy Crowley as moderator of the debate. She said she would defy rules and rephrase questions as she saw fit. That’s like a replacement ref in the NFL making up stuff as they go along - it’s not right. She was clearly going out of her way last night to drum up a brouhaha over her work and she got it. She interpreted the debate as she saw fit and that’s not what the American people deserve. What happened to truth and fairness?
BETTER GET IT RIGHT
We bought gold into the close yesterday because when the dollar is down, gold goes up. When Obama does well in a debate, the dollar goes down and vice versa when Mitt is killing it. Gold is still in a long-term bubble but the point is that on the immediate-term side of things, if you get that US dollar right, you’re going to get a lot of other things right. Keith pointed out a factoid on the USD that’s worth sharing this morning because it has huge implications:
A) IF the US Dollar snaps its TAIL line of support ($78.11)
B) AND the Euro (vs USD) breaks out above its TAIL risk line of resistance ($1.31)
C) THEN the market is probably telling you that Obama is going to win the Election
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ASSET ALLOCATION
Cash: Flat
U.S. Equities: Flat
Int'l Equities: Flat
Commodities: Flat
Fixed Income: Flat
Int'l Currencies: DOWN
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TOP LONG IDEAS
BRINKER INTL (EAT)
Remains our top long in casual dining as new sales layers (pizza) and strong-performing remodels (~5% comps) should maintain sales momentum. The company is continuing to enhance returns for shareholders through share buybacks . The stock trades at a discount to DIN (7.7x vs 9.3x EV/EBITDA) and in line with the group at 7.3x.
- TRADE: LONG
- TREND: LONG
- TAIL: LONG
PACCAR (PCAR)
Emissions regulations in the US focusing on greenhouse gases should end the disruptive pre-buy cycle and allow PCAR to improve margins. Improved capacity utilization, truck fleet aging, and less volatile used truck prices all should support higher long-run profitability. In the near-term, Paccar may benefit from engine certification issues at Navistar, allowing it to gain market share. Longer-term, Paccar enjos a strong position in a structurally advantaged industry and an attractive valuation.
- TRADE: LONG
- TREND: LONG
- TAIL: LONG
HCA HOLDINGS (HCA)
While political and reimbursement risk will remain near-term concerns, on the fundamental side we continue to expect accelerating outpatient growth alongside further strength in pricing as acuity improves thru 1Q13. Flu trends may provide an incremental benefit on the quarter and our expectation for a birth recovery should support patient surgery growth over the intermediate term. Supply costs should remain a source of topline & earnings upside going forward.
- TRADE: NEUTRAL
- TREND: LONG
- TAIL: LONG
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THREE FOR THE ROAD
TWEET OF THE DAY
“The media simply don't hold Obama to a high standard. I call it the soft bigotry of low expectations.” -@TPCarney
QUOTE OF THE DAY
“Nothing is so admirable in politics as a short memory.” -John Kenneth Galbraith
STAT OF THE DAY
Pepsi’s Q3 earnings fells 4.9% amid a decline in food and beverage sales. Higher commodity prices at work, folks.