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MATERIALS FOR TODAY’S EXPERT CALL

We are hosting a call today at 1pm ET, titled, “An Insider’s Look Into Pricing And The Restaurant Industry”.  Please find the materials, and the dialing instructions, for the call below.

 

Please CLICK HERE to access the slides for today’s call.

 

Participant Dialing Instructions:

  • Toll Free Number:
  • Direct Dial Number:
  • Conference Code: 946362#

 

Howard Penney

Managing Director

 

Rory Green

Senior Analyst


THE HEDGEYE DAILY OUTLOOK

TODAY’S S&P 500 SET-UP – February 20, 2013


As we look at today's setup for the S&P 500, the range is 15 points or 0.85% downside to 1518 and 0.13% upside to 1533.           

                                                                                                                    

SECTOR AND GLOBAL PERFORMANCE


THE HEDGEYE DAILY OUTLOOK - 1

 

THE HEDGEYE DAILY OUTLOOK - 2

 

THE HEDGEYE DAILY OUTLOOK - 3

 

THE HEDGEYE DAILY OUTLOOK - 4

 

EQUITY SENTIMENT:


THE HEDGEYE DAILY OUTLOOK - 10


CREDIT/ECONOMIC MARKET LOOK:

  • YIELD CURVE: 1.76 from 1.76
  • VIX  closed at 12.31 1 day percent change of -1.20%

MACRO DATA POINTS (Bloomberg Estimates):

  • 7am: MBA Mortgage Applications, Feb 15. (prior -6.4%)
  • 7:45am: ICSC weekly sales
  • 8:30am: Housing Starts, Jan., est. 920k (prior 954k)
  • 8:30am: Housing Starts M/m, Jan, est. -3.6% (prior 12.1%)
  • 8:30am: Building Permits, Jan., est. 920k (prior 909k)
  • 8:30am: Building Permits M/m, Jan. est. 1.2% (prior 1%)
  • 8:30am: PPI, M/m, Jan., est. 0.4% (prior -0.2%)
  • 8:30am: PPI Ex Food/Energy M/m, est. 0.2% (prior 0.1%)
  • 8:55am: Johnson/Redbook weekly sales
  • 11am: Fed to purchase $2.75b-$3.5b notes in 2020-2023 sector
  • 11:30am: U.S. Treasury to sell 4W bills
  • 2pm: Fed releases minutes from Jan. 29-30 FOMC
  • 4:30pm: API weekly inventories

GOVERNMENT:

    • 9:30am: Commerce Dept, Intl Trade Admin. hold meeting of Renewable Energy and Energy Efficiency Advisory Cmte
    • 10:30am: FCC holds open meeting on reqs for signal boosters, boosting amt of unlicensed spectrum available for Wi-Fi
    • 11am: Sec. of State John Kerry’s first foreign policy address
    • 1:30pm: American College of Physicians webinar on state of health care

WHAT TO WATCH

  • Home construction in U.S. probably cooled from 4yr high
  • BofA increases Moynihan’s compensation 71% to $12m in 2012
  • N.J. casino owner Revel to file for prepackaged bankruptcy
  • Japan trade deficit hits record as yen inflates imports
  • Bank of Korea’s Kim signals no rate cut needed now
  • Boeing averts immediate engineers’ strike as labor peace elusive
  • Malware attack on Apple said to come from eastern European gang
  • Dell sales exceed estimates on business demand ahead of buyout
  • Monsanto gets support from high court justices on seed patents
  • Heinz deal trading anomalies subject of FBI’s criminal probe
  • Apple victory in Google case to be reviewed by U.S trade agency
  • Wal-Mart sales slump may signal U.S. consumer spending to cool
  • Sony expected to unveil new PS4 at New York media event, 6pm

EARNINGS:

    • Dish Network (DISH) 6am, $0.51
    • EchoStar (SATS) 6am, $0.02
    • Six Flags Entertainment (SIX) 6am, $(0.58)
    • Cinemark Holdings (CNK) 6:36am, $0.39
    • Government Properties Income (GOV) 7am, $0.53
    • Lumber Liquidators Holdings (LL) 7am, $0.42
    • Dentsply International (XRAY) 7am, $0.55
    • DTE Energy (DTE) 7am, $0.86
    • MGM Resorts International (MGM) 7am, $(0.22)
    • Vantiv (VNTV) 7am, $0.34
    • Garmin (GRMN) 7am, $0.73
    • Lithia Motors (LAD) 7:30am, $0.66
    • Sonic Automotive (SAH) 7:30am, $0.51
    • Clean Harbors (CLH) 7:30am, $0.40
    • Devon Energy (DVN) 7:30am, $0.75
    • Owens Corning (OC) 7:30am, $0.16
    • Medicines Co (MDCO) 8am, $0.27
    • Iconix (ICON) 8am, $0.38
    • Ameren (AEE) 8am, $0.16
    • PVR Partners (PVR) 8:30am, $0.14
    • Eaton Vance (EV) 8:39am, $0.52
    • Acadia Healthcare (ACHC) 4pm, $0.19
    • Equity One (EQY) 4pm, $0.21
    • HomeAway (AWAY) 4pm, $0.13
    • Boston Beer (SAM) 4pm, $1.25
    • Walter Energy (WLT) 4pm, $(0.92)
    • Crocs (CROX) 4pm, $0.00
    • InterDigital (IDCC) 4:01pm, $0.06
    • Polypore International (PPO) 4:01pm, $0.52
    • Trinity Industries (TRN) 4:01pm, $0.84
    • Jack in the Box (JACK) 4:01pm, $0.39
    • Sunoco Logistics Partners (SXL) 4:01pm, $0.91
    • Williams Cos (WMB) 4:01pm, $0.25
    • Williams Partners (WPZ) 4:01pm, $0.48
    • MedAssets (MDAS) 4:04pm, $0.28
    • LaSalle Hotel Properties (LHO) 4:04pm, $0.45
    • Waste Connections (WCN) 4:04pm, $0.38
    • Clearwater Paper (CLW) 4:05pm, $0.75
    • Franklin Electric (FELE) 4:05pm, $0.54
    • acquarie Infrastructure (MIC) 4:05pm, $0.21
    • RealPage (RP) 4:05pm, $0.14
    • EXCO Resources (XCO) 4:05pm, $0.16
    • Fluor (FLR) 4:05pm, $0.97
    • Questar (STR) 4:05pm, $0.35
    • Synopsys (SNPS) 4:05pm, $0.55
    • Tesla Motors (TSLA) 4:06pm, $(0.57)
    • KBR (KBR) 4:09pm, $0.02
    • KAR Auction Services (KAR) 4:15pm, $0.19
    • STAG Industrial (STAG) 4:15pm, $0.30
    • Cheesecake Factory (CAKE) 4:15pm, $0.52
    • Concho Resources (CXO) 4:15pm, $1.00
    • Heico (HEI) 4:26pm, $0.40
    • Sauer-Danfoss (SHS) 4:30pm, NA
    • Yamana Gold (YRI CN) 4:30pm, C$0.26
    • Regency Energy Partners (RGP) 4:45pm, $0.07
    • Energy Transfer Equity (ETE) 4:45pm, $0.60
    • Energy Transfer Partners (ETP) 4:45pm, $0.40
    • Mullen Group Ltd (MTL CN) 5pm, C$0.38
    • Orient-Express Hotels (OEH) 5pm, $(0.03)
    • Healthcare Realty Trust (HR) 5:01pm, $0.32
    • SM Energy Co (SM) 5:30pm, $0.23
    • Helix Energy Solutions Group (HLX) 6pm, $0.36
    • Avista (AVA) 7:05pm, $0.45
    • Centerra Gold (CG CN) Post-Mkt, C$0.42
    • Curtiss-Wright (CW) Post-Mkt, $0.93
    • First Industrial Realty Trust (FR) Post-Mkt, $0.23
    • Healthcare Trust of America (HTA) Post-Mkt, $0.14
    • Hersha Hospitality Trust (HT) Post-Mkt, $0.10
    • Pan American Silver (PAA CN) Post-Mkt, $0.36
    • HudBay Minerals (HBM CN) Post-Mkt, C$0.03
    • Iamgold (IMG CN) Post-Mkt, C$0.25
    • Tronox Ltd (TROX) Post-Mkt, $(0.13)

COMMODITY/GROWTH EXPECTATION (HEADLINES FROM BLOOMBERG)

  • World’s Biggest Wheat Buyer Steps Down From Egyptian Authority
  • No Women on Glencore’s Board Marks Mining Imbalance: Commodities
  • Copper Swings Between Gains and Declines as Inventories Expand
  • Gold Declines to Six-Month Low on Signs of Economic Improvement
  • WTI Crude Slips, Discount to Brent Narrows on Seaway Pipe Flows
  • Soybeans Reach One-Week High on Increasing Demand From China
  • Robusta Coffee Rebounds Amid Lack of Vietnam Sales; Sugar Falls
  • Egypt’s Wheat Tender Said to Get Offers From Only U.S. Supplies
  • BHP Names Mackenzie to Succeed Kloppers as Profit Declines
  • Harvesting Sewage Signaling Boon for Utilities to Skiers: Energy
  • U.S. to Ask China to Delay New Rules on Pork Imports, Group Says
  • Rebar Declines Amid Concern China May Curb Property Prices
  • Oil Inventories Climb for Fifth Week in Survey: Energy Markets
  • Copper Volatility Falls to 10-Year Low Amid ‘Super Cycle’ Debate

THE HEDGEYE DAILY OUTLOOK - 5

 

CURRENCIES


THE HEDGEYE DAILY OUTLOOK - 6

 

EUROPEAN MARKETS

 

THE HEDGEYE DAILY OUTLOOK - 7

 

ASIAN MARKETS

 

THE HEDGEYE DAILY OUTLOOK - 8

 

MIDDLE EAST


THE HEDGEYE DAILY OUTLOOK - 9

 

 

The Hedgeye Macro Team

 

 

 

 


Daily Trading Ranges

20 Proprietary Risk Ranges

Daily Trading Ranges is designed to help you understand where you’re buying and selling within the risk range and help you make better sales at the top end of the range and purchases at the low end.

THE M3: CNY REVENUES; MPEL PHILIPPINES; CHANGI; HAINAN

The Macau Metro Monitor, February 20, 2013

 

 

GAMING REVENUE DOWN 3.9% IN CNY: REPORT Macau Business

Macau casinos recorded a 3.9% drop in gross gaming revenue during the Lunar New Year holidays in comparison with the same festive period one year before, Lusa news agency reports.  Quoting unidentified sources in the gaming industry, Lusa reports that during the first seven days of the Year of the Snake (February 10 to February 16), Macau casinos recorded gross gaming revenue of MOP7.2 billion (US$900 million), down from the MOP7.5 billion recorded in the first seven days of the Year of the Dragon.

 

Gross gaming revenue dropped despite the city having recorded 937,000 visitor arrivals from February 9 to February 15 (including non-resident workers and students), marking a growth of 15.4% compared with last year’s holiday period, according to the Macau Government Tourist Office.  Among those, close to 630,000 visitors came from the mainland, marking an increase of 25.5%.

 

MELCO CROWN'S PHILIPPINE UNIT PREPARES SHARE SALE Macau Business

Manila-listed Manchester International Holdings Unlimited Corp is raising its capital stock to P5.9 billion (US$1.16 billion) from P900 million, with a unit of MPEL subscribing to 2.85 billion shares or 56.9% out of the total increase.  This is part of the move for Melco Crown to take control of the firm, as a vehicle for a backdoor listing in Manila and also as a vehicle for its planned investment in Belle Grande Manila Bay.


Manchester International Holdings has also announced it plans to further sell up to 1.2 billion shares.  The company will also be renamed Melco Crown (Philippines) Resorts Corp.  

 

MONTHLY BREAKDOWN OF PASSENGER MOVEMENTS Changi Airport Group

Singapore's Changi airport passengers rose 1.9% YoY in January to 4,325,530.  The slower growth reflects the difficult comparisons from last year's Chinese New Year which occurred in January.

 

HAINAN CASINO BAR SHUT DOWN: REPORT Macau Business

“We have shut the entertainment bar. We are investigating it and, so far, it looks like they have violated their operating regulations,” Chen Guangfa, the deputy director of the Sanya Culture and Sports Bureau, told Reuters.  “When we approved it, the regulations and the certificate said its operations would be entertainment in nature, but inside the bar there are some games, and they’ve gone beyond the scope of the regulations, so we closed it down,” the official said, without disclosing further details.  The local police are now conducting an investigation.

 

The casino bar had 50 gaming tables with minimum bets from RMB20 (MOP26) to RMB100,000.  The punters at the casino bar played with cash but could not win it back; they could only get points that could be used to pay for accommodation and luxury goods on sale at the resort.



Don't Hurry Mistakes

“Let’s not make our mistakes in a hurry.”

-Dwight D. Eisenhower

 

The 34th President of the United States was a process guy. He was also a world class Risk Manager. Getting the US out of Korea, averting the French invitation to Vietnam (1953), and avoiding the ongoing threat of engaging China or Russia in nuclear war is his legacy now. If you are a Portfolio Manager in this game, your legacy is your track record – and it’ll be the mistakes you don’t make that matter most.

 

But what kind of team culture should you foster to ensure you aren’t missing something? Do you accept the blame for your team’s mistakes, or do you point fingers? Is there an open forum for people who report to you to disagree with your position? If they do so and have sloppy reasoning, do they expect to be taken to task in front of their peers in kind?

 

I’m an athlete who believes in transparency, accountability, and trust. I have biases. But they are based on experience. There are a lot of great players – and even more good teams. But only few Championship Teams can repeat. To do that, your players can’t be scared to make a mistake. At the same time, they have to be disciplined so that their mistakes don’t blow up everything the team has worked for.

 

Back to the Global Macro Grind

 

Particularly when a market is in a Bullish Formation (Bullish on all 3 of our core risk management durations: TRADE, TREND, and TAIL), not getting squeezed (on the short side) can save the team from having a lot of losses.

 

If you accept that bullish and bearish formations (Gold is in a Bearish Formation, so is the Japanese Yen) can get immediate-term TRADE overbought and oversold, at a bare minimum you won’t be making the same mistakes over and over again in a hurry. You’ll wait.

 

It’s taken me at least 13-15 years to learn this the hard way. Getting squeezed is part of a short seller’s life. And guess what, I still have to re-learn the same lesson, weekly. This game isn’t easy. That’s why I try my best to make decisions on the signal now, instead of the noise.

 

To simplify what I mean by making high-probability decisions:

 

  1. Don’t be in a hurry to sell something until you get an immediate-term TRADE overbought signal
  2. Don’t be in a hurry to buy something until you get an immediate-term TRADE oversold signal
  3. Don’t eat yellow snow

 

Or, as President Eisenhower used to tell his brother Milton, “Never get in a pissing match with the skunk.” (Ike’s Bluff, pg 57)

 

Yes, I am sure there are some really smart people out there who have found a way to not have to deal with process, real-time decision making , etc. But I can almost guarantee you that what they do ends up having a higher realized level of volatility than what we do.

 

To put some meat on this bone, here are some immediate-term TRADE overbought signals in our models this morning:

 

  1. SP500 is immediate-term TRADE overbought at 1533
  2. Russell2000 is immediate-term TRADE overbought at 934
  3. Consumer Staples Sector ETF is immediate-term TRADE overbought at $38.06
  4. Kimberly Clark (KMB) is immediate-term TRADE overbought at $92.31
  5. Fedex (FDX) is immediate-term TRADE overbought at $107.39

 

First, note that I have no immediate-term TRADE overbought signals to act on in any of our long Asian Equities positions. Singapore (EWS) has immediate-term upside, and so does China (which we bought via CAF on an immediate-term TRADE oversold signal yesterday).

 

Second, I am agnostic on the direction of the signal. It works the same way for both my longs and shorts. Yes, we like and are long of Fedex (FDX), but A) that’s not new (we bought it when we went bullish on US Equities in late November) and B) what is new is that it gave me its first immediate-term TRADE overbought signal in at least the last few weeks.

 

Third, using immediate-term TRADE overbought signals is another way to hedge market (beta) risk. So, I can be bullish on US Equities on my intermediate-term TREND duration and A) realize I might get an overbought signal in SPY this morning but B) not force myself to short something consensus like SPY, and stock and sector pick on a better signal instead (shorting XLP and KMB into yesterday’s close).

 

I am certain that there are better ways to do this – and I assure you that before I retire, I will find better ways. But for now, this is how my team rolls because this process is both repeatable and helping us not hurry mistakes.

 

Our immediate-term Risk Ranges for Gold, Oil (Brent), US Dollar, USD/YEN, UST 10yr Yield, and the SP500 are now $1 (Gold remains in a Bearish Formation but is immediate-term TRADE oversold), $116.51-118.71, $80.25-80.83, 92.63-94.49, 1.97-2.05% and 1, respectively.

 

Best of luck out there today,

KM

 

Keith R. McCullough
Chief Executive Officer

 

Don't Hurry Mistakes - Chart of the Day

 

Don't Hurry Mistakes - Virtual Portfolio


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