CLIENT TALKING POINTS
JAPAN
Smell that? It's the scent of Burning Yens back in the air with the USD stabilizing on Bernanke not being dovish enough and Team Abe and Aso ready to win an election this weekend. Cue the Nikkei, which is on a nice +5 day run. It was up another +1.3% overnight. Japan is up +43.8% year-to-date. It's the best looking (liquid) equity market in the world right now next to the USA.
UK
Slow and steady with some refreshing accelerations ... that’s the UK growth data as of late. The FTSE? She likes it. UK Retail Sales showing #GrowthAccelerating again in June to +2.2% year-over-year from +1.9%. I have the FTSE at #3 "Best Looking" in the deep and liquid Equity market standings next to USA and JAPAN right now.
OIL
The recent Viagra rallies in Gold, Oil and Copper, etc. are over as of Bernanke’s testimony yesterday. Thank God. Now we just need to see this gargantuan net long (futures/options) position in crude wear off and Down Oil would be your next catalyst for SPX 1700. Long-term TAIL risk line for Brent is 107.88/barrel.
TOP LONG IDEAS
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.
Asset Allocation
| CASH | 54% | US EQUITIES | 16% | |
| INTL EQUITIES | 8% | COMMODITIES | 0% | |
| FIXED INCOME | 0% | INTL CURRENCIES | 22% |
THREE FOR THE ROAD
TWEET OF THE DAY
Bernanke didn’t deliver the blue pills yesterday; commodity reflations backing off is a very good thing
QUOTE OF THE DAY
“I only take Viagra when I am with more than one woman.”
- Jack Nicholson
STAT OF THE DAY
In 2007, there were 500 million internet-connected devices - about 1 for every 20 people on the planet. In 2010, that number grew to 35 billion, or about 5 per person. By 2013, may grow to 1 trillion devices, or 140 devices per person. (PCMag)
