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Client Talking Points

YEN

We've said it before, and we'll say it again: Get the US Dollar right and you will get a lot of other things "Big Macro" right. Yen (vs USD) is down for a 4th day in a row and the Weimar Nikkei has ripped a +6.8% 4-day move on that. It is now back above our 13,389 TREND line of support. The Dollar matters, folks.

GOLD

We have no short position currently in Gold. But we are looking at this $1268-1332 range (immediate-term TRADE resistance) to start re-populating our entire metals/mining book on the short side. Gold is a lot like AAPL was. Wall Street Consensus is still trying to call bottoms, instead of pressing one of the better Macro short calls there is. There is no support to $1174.

GREECE

Just in case you didn’t know how this whole debt/debauchery thing ends, now you know. Greek stocks were front-running the re-entry of the "Troikan Eurocrats" this week. Greece is down an astounding -26.4% since May 17. That there is what we call crashing. With most Asian and European Equity tapes bearish TREND right now, people are running out of places to put their money. Yes, that is a bullish catalyst for US Equity flows.

Asset Allocation

CASH 55% US EQUITIES 15%
INTL EQUITIES 6% COMMODITIES 0%
FIXED INCOME 0% INTL CURRENCIES 24%

Top Long Ideas

Company Ticker Sector Duration
WWW

WWW is one of the best managed and most consistent companies in retail. We’re rarely fans of acquisitions, but the recent addition of Sperry, Saucony, Keds and Stride Rite (known as PLG) gives WWW a multi-year platform from which to grow. We think that the prevailing bearish view is very backward looking and leaves out a big piece of the WWW story, which is that integration of these brands into the WWW portfolio will allow the former PLG group to achieve what it could not under its former owner (most notably – international growth, and leverage a more diverse selling infrastructure in the US). Furthermore it will grow without needing to add the capital we’d otherwise expect as a stand-alone company – especially given WWW’s consolidation from four divisions into three -- which improves asset turns and financial returns.

MPEL

Gaming, Leisure & Lodging sector head Todd Jordan says Melco International Entertainment stands to benefit from a major new European casino rollout.  An MPEL controlling entity, Melco International Development, is eyeing participation in a US$1 billion gaming project in Barcelona.  The new project, to be called “BCN World,” will start with a single resort with 1,100 hotel beds, a casino, and a theater.  Longer term, the objective is for BCN World to have six resorts.  The first property is scheduled to open for business in 2016. 

HCA

Health Care sector head Tom Tobin has identified a number of tailwinds in the near and longer term that act as tailwinds to the hospital industry, and HCA in particular. This includes: Utilization, Maternity Trends as well as Pent-Up Demand and Acuity. The demographic shift towards more health care – driven by a gradually improving economy, improving employment trends, and accelerating new household formation and births – is a meaningful Macro factor and likely to lead to improving revenue and volume trends moving forward.  Near-term market mayhem should not hamper this  trend, even if it means slightly higher borrowing costs for hospitals down the road. 

Three for the Road

QUOTE OF THE DAY

It is better to be hated for what you are than to be loved for something you are not.

- Andre Gide 

STAT OF THE DAY

Danske Bank A/S, the most-accurate gold forecaster tracked by Bloomberg over the past two years, predicts $1,000 in three months.