CLIENT TALKING POINTS
The Grinches
Even with Christmas over and done with, the Grinch is still around. Instead of looking like a hairy, green monster with devilish eyes, he now looks a lot like the political class of America. Does anyone actually believe that President Obama and Congressional Democrats and Republicans will come to a solidified agreement by the deadline of December 31? Doubtful. What a way to bring in the New Year, right? Higher taxes and a bunch of politicians who don’t actually serve the public’s needs. Shameful.
China's Bottom
In other news, it looks like China’s begun the bottoming process in commodities. Iron ore and rebar, two indicators of construction and the economy that we are fond of keeping an eye on, have had a strong quarter in terms of price appreciation. Growth is now stabilizing instead of slowing, this time on a global playing field. You’ve seen the housing market recovery and commodity drop out in the United States, now it’s time for other countries to give it a shot.
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 | 58% | US EQUITIES | 18% | |
| INTL EQUITIES | 12% | COMMODITIES | 0% | |
| FIXED INCOME | 0% | INTL CURRENCIES | 12% |
THREE FOR THE ROAD
TWEET OF THE DAY
“Better later than never @pdacosta: Spain's PM says does not rule out asking for European aidreut.rs/V8Rw5x” -@Nouriel
QUOTE OF THE DAY
“Everything of importance has been said before by somebody who did not discover it.” -Alfred North Whitehead
STAT OF THE DAY
The Financials Select SPDR ETF (XLF) is up +25.46% year-to-date, one of the best performing sectors in the market. Comparatively, Technology (XLK) is up only +12.69% for the same time period.
