CLIENT TALKING POINTS
Calling The Shots
When we make calls or trades at Hedgeye, we make sure to timestamp everything we do. It's easy to say you saw a trend coming and put on a fantastic trade, but anyone can do that. We've only had four double digit losses out of several hundred trades this year and that's pretty damn good. Back in March, we made our Growth Slowing call that eventually turned into Earnings Slowing in Q3. With the housing market and stock market beginning to recover and commodities deflating, we're now in the camp of Growth Stabilizing. The fiscal cliff will play a big role in where we go from January and further out but right now, that's where we stand.
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 | 24% | |
| INTL EQUITIES | 12% | COMMODITIES | 0% | |
| FIXED INCOME | 0% | INTL CURRENCIES | 12% |
THREE FOR THE ROAD
TWEET OF THE DAY
"Like most successful buy-side pros, my forecasts change daily b/c risk does" -@KeithMcCullough
QUOTE OF THE DAY
"What we anticipate seldom occurs; what we least expected generally happens." -Benjamin Risaraeli
STAT OF THE DAY
The 10-year Treasury yield hit 1.78% this morning, a seven week high.