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Client Talking Points

Chinese Deflation

The effects of the US dollar gaining strength week-after-week are being heard around the world. China is seeing a decrease in inflation as global food prices come down hard. Asian stocks are up this morning after Chinese CPI fell hard on a month-over-month basis to 2.1% in March vs 3.2% last month.

Confuse The Masses

The 10-year Treasury is in a nice little niche right now that can confuse the bulk of investors out there. "Which way will it go?" they'll ask. The 10-year has been making lower highs since March but is bearish on our immediate-term TRADE duration as 1.83% as resistance. If it can't break that level, expect lower yields as people think twice about Japanese and US bonds. 

Asset Allocation

CASH 26% US EQUITIES 28%
INTL EQUITIES 22% COMMODITIES 0%
FIXED INCOME 0% INTL CURRENCIES 24%

Top Long Ideas

Company Ticker Sector Duration
DRI

Darden stands to be a beneficiary from a housing recovery and an improved employment picture, which boosts casual dining trends. The company's net income declined on its recent earnings report but beat the Street's expectations.

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.

Three for the Road

TWEET OF THE DAY

"Fidelity Considers Scrapping Securities Lending Program [GC]" -@alea_

QUOTE OF THE DAY

"To succeed in the world it is not enough to be stupid, you must also be well-mannered." -Voltaire

STAT OF THE DAY

The March small-business optimism index of the National Federation of Independent Business fell 1.3 points to 89.5.