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THE WEEK AHEAD

The Economic Data calendar for the week of the 20th of May through the 24th is full of critical releases and events. Attached below is a snapshot of some (though far from all) of the headline numbers that we will be focused on.

 

THE WEEK AHEAD - WeekAhead


Trade of the Day: ADM

Takeaway: Keith bought shares of Archer Daniels Midland (ADM) this morning, then sold for a profit this afternoon.

Keith bought shares of Archer Daniels Midland (ADM) at 10:00am ET at $34.18 a share, and sold them at 3:33pm at $34.98 for a tidy 2.34% profit in a little more than five-and-a-half hours.

 

Keith writes of his purchase this morning: “(Consumer Staples sector head) Rob Campagnino reiterating his bullish view on ADM post the Berkshire sale. Higher-lows and bullish trend (are) intact into a big corn crop utilization.”

 

Warren Buffett’s Berkshire Hathaway disclosed in a filing this week that it had sold its entire stake in ADM, in which Berkshire had amassed holdings of nearly six million shares.

 

Keith writes of his sale of ADM this afternoon, “How’s that for some weekend moneys? ADM moved to immediate-term TRADE overbought within its bullish TREND, in a day!”

 

Trade of the Day: ADM - ADM


WWW Call: Dial-In Details

Takeaway: Here are the dial details for our WWW call for Hedgeye clients on Monday at 1pm.

 

CALL DETAILS

  • Date: Monday, May 20th at 1:00pm
  • Toll Free Number:
  • Direct Dial Number:
  • Conference Code: 465419#
  • Materials: will be distributed prior to the call 

 

WWW Call: Dial-In Details - wwwinvite


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.

CHART DU JOUR: ADMITTING THE PROBLEM

Regional gaming is primarily slots and slot players are dwindling

 

  • Almost all US casino operators have acknowledged seeing a decline in admissions. But as the chart below shows, this phenonemom isn't just limited to a couple of quarters.
    • The mature regional gambling markets haven't seen a +2% YoY growth in admissions since Q3 2007
    • Q1 2013 admissions tumbled 7.4% YoY.
  • The long-term decline in admissions occured despite numerous new casino openings in those markets i.e. Grand Falls (IA), River City (MO), Rivers (IL), Cape Girardeau (MO), and L'Auberge Baton Rouge (LA)
  • The opening of Ohio and the expansion of Kansas may have played a role; however, bad demographics is the main culprit in our opinion.  Generations below Baby Boomers just aren't interested in slots.

CHART DU JOUR: ADMITTING THE PROBLEM - r


WWW: Call on Monday 5/20

Takeaway: As a reminder, we're hosting a call to discuss our '2-Year Double' Call on WWW on 5/20. Please join us.

WWW: Call on Monday 5/20 - wwwinvite


#StrongDollar, Strong America

It’s no secret that we like #StrongDollar.  Historically, strong dollar periods have been characterized by lower commodity inflation, low energy prices, rising confidence and strong consumption growth. 

 

The Dollar is a causal factor in our model and our StrongDollar call over the last 5 months has backstopped our expectation for Gold and Commodity deflation and rising consumption as purchasing power benefits and discretionary share of wallet gets a boost. 

 

Year-to-date, we’ve seen the $USD march interminably higher alongside declining federal profligacy, improving domestic macro data, increasingly marginalized Fed policy, slower EM growth, emergent European dovishness and explicit Yen debauchery.  We expect the dollar to continue to benefit from a further perpetuation of these dynamics. 

 

Currently, the $USD remains in Bullish formation (Bullish TRADE/TREND/TAIL) and U.S. dollar correlations to the SPX (+) and Oil, Gold & Commodities (-) remain strong across durations.   

 

Now, we’re beginning to see confidence chase the dollar higher as consumer confidence measures begin a nascent break out of their 4 year slumber.   This morning’s University of Michigan Consumer confidence reading accelerated to 83.7 in May from April’s final reading of 76.4, posting it’s highest reading since July 2010.  

 

The acceleration in the Univ. of Michigan confidence reading agrees with recent breakout to new 5Y highs observed in the Bloomberg Consumer Comfort Index and the steady advance in the Conference Board’s measure of consumer confidence. 

 

Longer-term, outside of the last four years in which confidence readings essentially flat-lined, consumer confidence has been highly correlated with accelerating economic activity.  A sustained breakout in confidence alongside ongoing housing and labor market improvement represents a fertile factor cocktail capable of catalyzing positive economic reflexivity.    

 

 

#StrongDollar = Strong America.

 

 

Enjoy the weekend,

Hedgeye Macro

 

#StrongDollar, Strong America - U.S. Dollar

 

#StrongDollar, Strong America - Consumer Confidence vs DXY 051813

 

#StrongDollar, Strong America - Bloomberg Consumer Comfort 051713

 

#StrongDollar, Strong America - U.S. Dollar  Gas  GDP by Pres

 

Christian B. Drake

Senior Analyst 

 


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