CLIENT TALKING POINTS
Growth Games
With #GrowthStabilizing, you have two things happening: stocks are going up and bonds and commodities are getting crushed. We’ve seen the rally in stocks as the Dow hit 14,000 and the S&P 500 pole-vaulted past 1500. Treasuries, conversely, have been getting hammered and the yield on the 10-year ticked up to 2.05% this morning as fund flows continue to shift from bonds to stocks. With stocks up the last five weeks in a row, they show no sign of letting up soon.
End Of The Golden Days
Goldbugs are an interesting breed. They keep insisting gold will always go up, until it doesn’t. Gold made a long-term lower-high in mid November at $1755/oz then snapped our intermediate-term TREND line of $1698 in early December. Last week, gold net long positions crashed to 82,081. Those bugs went selling their net long positions in Gold contracts to the tune of down -24% wk-over-wk. Like we said before, the Growth Game is bearish on bonds and gold, bullish for stocks.
TOP LONG IDEAS
ASCA
We believe ASCA will receive a higher bid from another gaming competitor. Our valuation puts ASCA’s worth closer to $40.
FDX
With FedEx Express margins at a 30+ year low and 4-7 percentage points behind competitors, the opportunity for effective cost reductions appears significant. FedEx Ground is using its structural advantages to take market share from UPS. FDX competes in a highly consolidated industry with rational pricing. Both the Ground and Express divisions could be separately worth more than FDX’s current market value, in our view.
HOLX
HOLX remains one of our favorite longer-term fundamental growth companies given growing penetration of its 3D Tomo platform and high leverage to the 2014 Insurance Expansion from the Affordable Care Act.
Asset Allocation
| CASH | 46% | US EQUITIES | 15% | |
| INTL EQUITIES | 15% | COMMODITIES | 0% | |
| FIXED INCOME | 0% | INTL CURRENCIES | 24% |
THREE FOR THE ROAD
TWEET OF THE DAY
“08:16ET Herbalife subject of FTC investigation: NY Post” -@cbk_chi
QUOTE OF THE DAY
“It is by universal misunderstanding that all agree. For if, by ill luck, people understood each other, they would never agree.” -Charles Baudelaire
STAT OF THE DAY
The best start for US Equity flows since 1996 as stocks make multi-year highs.
