CLIENT TALKING POINTS
Japanese Bonfire
Japan’s plan to devalue the Yen is hilarious in a macabre sort of way. They’re taking cues from the good old US of A and think that the solution to their problems is to devalue their currency and trashing their economy in exchange for a bullish rocketship for the Nikkei. We’ve seen how well printing money has worked for us and if Japan is keen on following the advice of Paul Krugman and Ben Bernanke, then they’re going to get exactly what they asked for. Keep a close eye on Japan; if you spot a huge ball of fire, it’s their currency burning brightly.
Not So Precious
Precious metals like gold and silver are getting smacked up, dropping -1.2% and -2.4% this morning, respectively. As we’ve said before, the commodity super-cycle is turning and commodities are popping. Throw a strong US dollar into the mix and you’ll continue to see these metals decline in price. Long-term, the dollar will continue to make higher lows. The fiscal cliff will play a part in all of this, so in turn, we’ll play the waiting game to see what effects come out of Congress.
TOP LONG IDEAS
NKE
Our competitors are neutral to bearish on the name ahead of earnings, but we think they’re missing the bigger picture. We think concerns over the shoe cycle rolling over are overdone. With R&D in the mid-teens, NKE has the ability to drive the ‘sneaker cycle’ in a case of “the tail wagging the dog”. We also think $NKE is a candidate for releasing a special dividend when they report EPS next week.
SBUX
Uncertainty in US from a macro perspective (jobless claims uptick) gives us pause from TRADE perspective although coffee prices will serve as a tailwind going forward. Company is becoming more complex, taking on risk as it acquires new brands. Longer-term, we view Starbucks, along with YUM, as one of the most attractive global growth stories in our space.
FDX
Margins are in a cycle trough as the USPS is on the brink. FDX is taking more share in the U.S. and following the recent $TNT news flow we think $UPS is in a tough spot.
Asset Allocation
| CASH | 52% | US EQUITIES | 12% | |
| INTL EQUITIES | 6% | COMMODITIES | 0% | |
| FIXED INCOME | 18% | INTL CURRENCIES | 12% |
THREE FOR THE ROAD
TWEET OF THE DAY
“FED SAYS FED, BoC, BoE ECB & SNB EXTENDING $ SWAP LINES TILL FEB. 1, 2014 > just a buffer for a rainy day in case funding stress resurfaces” -@BergenCapital
QUOTE OF THE DAY
“Ethics are so annoying. I avoid them on principle.” -Darby Conley
STAT OF THE DAY
US Jobless Claims drop to 9-week low of 343,000.
