CLIENT TALKING POINTS
Stabilize and Economize
With global markets melting up this morning and the S&P 500 holding its key TRADE line of support (1419), markets are attracting the bulls like a red cape being waved in Barcelona. The overall theme is now switching from #GrowthSlowing to #StabilizingGrowth, which is a very positive catalyst for the markets. China saw the Shanghai Composite up +4.3% overnight and Germany saw the DAX make higher highs, blowing past September’s numbers. As for commodities, keep in mind that economic recoveries don’t occur when oil is at $150 a barrel and gold at $1900/oz.
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 | 49% | US EQUITIES | 18% | |
| INTL EQUITIES | 9% | COMMODITIES | 0% | |
| FIXED INCOME | 12% | INTL CURRENCIES | 12% |
THREE FOR THE ROAD
TWEET OF THE DAY
“Commodity Deflation is bullish for consumers; bearish for commodities. Period.” -@KeithMcCullough
QUOTE OF THE DAY
“A man may be so much of everything that he is nothing of anything.” -Samuel Johnson
STAT OF THE DAY
US November Consumer Prices fall 0.3%, Core Rate Rises 0.1%.