CLIENT TALKING POINTS
USD
What's going on with the US dollar is of paramount importance. This could be the 1st, 2nd and 3rd most important thing in my notebook. It is up for the thirdconsecutive week now. It's holding its higher-lows vs June and knocking the Yen solidly back into a Bearish Formation. Here's the Hedgeye formula: #StrongDollar + #RatesRising = good things for the TREND that is growth stocks rising in the USA.
COPPER
You visit Dr. Copper lately? Because the Doctor no likey the #StrongDollar bounce. Copper is down -3.3% for the week after failing, big time at Hedgeye's TREND resistance of $3.39/lb. It banged the top of of the range and failed miserably.
KOSPI
This has to be the surprise gainer of the week. It broke out from our Hedgeye TREND resistance line of 1890 yesterday and had a full +1% of follow through again last night to 1926. South Korean economic data supported that move this week too. Look, Asia needed a bone. It's a potentially a bullish signal for tech and industrials.
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 | 28% | US EQUITIES | 26% | |
| INTL EQUITIES | 24% | COMMODITIES | 0% | |
| FIXED INCOME | 0% | INTL CURRENCIES | 22% |
THREE FOR THE ROAD
TWEET OF THE DAY
When whining about Syria ends, what's the next End of the World #EOW bear call? @KeithMcCullough
QUOTE OF THE DAY
“Everybody has a plan until they get punched in the face.” - Mike Tyson
STAT OF THE DAY
Despite the recent rip in oil prices, Russian stocks are still getting crushed down over -12% year-to-date. Sorry Putin.