LEISURE LETTER (05/05/2014)



Tuesday, May 6

• RHP Q1 earnings – 10am , Passcode: 25122491

• SHO Q1 earnings – 12pm

• TRIP Q1 earnings – 4:30pm

• DIS FQ2 earnings – 5pm , Passcode: 36995300


Wednesday, May 7

• STAY Q1  – 830am

• STN Q1 – 4pm

• CZR Q1 – 5pm , Passcode: 20337702


Thursday, May 8

• PCLN Q1 – 730am

• MPEL Q1 – 830am , Passcode: MPEL

• CAR Q1 – 830am , Passcode Avis Budget

• BEE Q1 – 10am , Passcode: 10895989

• HOT – 10:10am presenting at Baird's 2014 Growth Stock Conf

• SGMS Q1 – 430pm , Password: SGMS


Friday, May 9

• HLT Q1 earnings – 10am , Passcode: 25981567

• AHT Q1 earnings – 11am


LVS - announced that it intends to keep Sands Bethworks, which was rumored to be for sale $1 billion.  Additionally, the Company announced it will continue to invest in several property level projects.  Finally, the Company appointed Mark Juliano as president of Sands Beth.  Juliano previously ran Marina Bay Sands following the departure of Tom Arasi, who departed in February 2011.

TAKEAWAY:  A strong talent transfer from MBS to Bethworks.  We wonder who will back fill Juliano's vacate MBS role? 


WYNN - (Reuters) A Nevada judge ruled that a civil suit between Wynn Resorts and Kazuo Okada could continue and rejected the U.S. government's request to postpone it for another six months to conceal the identity of witnesses in a criminal investigation into Okada's business in the Philippines

TAKEAWAY:  The saga continues...


Genting Singapore (G13) - announced it "organized a dedicated project team"

as it relates to a potential new integrated resort development in Japan.  Genting Singapore noted Japan may pass the casino bill in the Lower House by the end of the month.

TAKEAWAY:  This fits with our expectation for the Casino Introduction Bill to be vetted in the days following the Japanese Gaming Congress (see our conf notes for more details).


Iao Kun Group - Junket Iao Kun Group Holding Company Limited announced unaudited Rolling Chip Turnover for April at US$1.72 bn, up 17% YoY.  Win rate was 1.90%.

TAKEAWAY:  A very low hold % at this junket could've contributed to lower than normal hold for the market in early April.


SGMS - announced it signed an amendment to its contract with Loteria Nacional de Beneficencia of Panama to provide the country’s first online lottery game, Pega 3.  Created by Scientific Games, Pega 3 is scheduled to launch in June 2014 as a standard Pick 3 game.


NCLH - (Cruise Critic) the Norwegian Breakaway was directionless for several hours on Sunday in the Hudson River after one if its side thrusters malfunctioned and left the ship  wallowing in the Hudson from 7:45 a.m. until it docked at Pier 88 at 10 a.m.  Prior to the breakdown, NCL had planned to celebrate the ship's one year anniversary.  The Breakaway was scheduled to depart at 5 p.m. for a cruise to Bermuda.


NCL spokeswoman AnneMarie Mathews said there was no real propulsion problem. Only a "small, technical maintenance item on one of the two azipods."  "We were closely monitoring the currents in the river and being very cautious. We don't expect it to have any affect on the next sailing," she said.

TAKEAWAY:  Yet another media black-eye for the cruise industry. 


Macau April Market Share - according to LUSA, Macau's April GGR market shares were:

SJM 23.4%

LVS 22.9%

GALAXY 20.0%

MPEL 13.0%

WYNN 11.0%

MGM 9.7%

TAKEAWAY:  Wynn Macau had the best month in terms of share relative to recent trend and Galaxy the worst.  The others were generally in line with their 3 month moving average.


Macau Visitation Scrutinized - During 2013, approximately 2.64 million Chinese visitors entered Macau from the mainland using visas for overseas journeys. But little over 20%of them exited Macau. The Macau Government suspects many of the mainland visitors used transit visa to Macau as a means of avoiding the regular IVS entry permit which limits frequency of visitation. 

TAKEAWAY:  We are hearing the Macau government will study terms of restricting the stay period that mainland visitors can enjoy when transiting Macau - the related restriction measure may be put
forward in July.


Macau May Day March - This year’s Labor Day march demonstrated a wider variety of concerns and larger participation of casino workers. While gaming industry employees united to urge for a full smoking ban in casinos, youth groups appealed for a reshaping of the living space for residents.  Additionally, an unprecedented motorcade of 31 cars and nine motorcycles was organized by four casino workers groups under the Macau Federation of Trade Unions (FOAM). Departing from Taipa,they eventually handed in a petition letter to the Legislative Assembly against the importation of foreign labor, while demanding a fair promotion system.

TAKEAWAY:  The locals are getting restless as YoY growth in GGR strongly outpaces casino wages. 


Macau Airlift - Macau International Airport handled 10% more passengers during April 2014 versus the prior year. The airport welcomed about 450,000 passengers last month, versus nearly 409,000 in the same month of the previous year. 

TAKEAWAY:  Positive for the premium mass and VIP segments. 


Macau Hotel Construction - There are a total of 18 hotels currently being constructed in Macau, with an additional 25 development projects being appraised. All 43 projects together could mean up to 25,600 new hotel and guestrooms. Currently under construction are 18 hotels encompassing 9,800 guestrooms. Ten of the properties are being built on the Macau side and will offer about 1,000 guestrooms altogether; five are being built in Cotai and could offer as many as 7,500 guestrooms, while two are under construction in Taipa and will offer 1,000 rooms. A hotel is also being built in Coloane, which will offer up to 200 rooms. 

TAKEAWAY:  We hope supply creates demand...


Hard Rock Hotel & Casino Sioux City - speculation regarding the opening date is increased as Warner Gaming announces concert bookings for the new, yet to open property.  Thus far the earliest concert is scheduled for August 7th, followed by Quiet Riot on August 15, and the Goo Goo Dolls and Daughtry on Aug 30.

TAKEAWAY:  Given the increasingly pugnacious comments from PENN regarding Argosy Sioux City, the last weeks of July and first weeks of August will be a media frenzy.  


Atlantic City - Mayor Don Guardian proposed a large outdoor stage to help increase visitation to Atlantic City.   Thus far, two Atlantic City beach concerts are planned – the first in July 31 featuring Blake Shelton.  A second concert is planned for Sunday, August 3 for a yet unnamed headliner.

TAKEAWAY:  First, we recall concerts being a foundational pillar of The Revel's differentiated programming as well as Showboat's House of Blues, so how is this different - except for the potential to become a drunken beach brawl...Second, we go out with an early call and our $$ is on The Boss.


Airbnb - (Reuters) Buffett endorses Airbnb to combat hefty Omaha hotel prices

Buffett said it is understandable that rates might rise, given that Berkshire's annual meeting now attracts some 38,000 shareholders - roughly two-thirds from outside the area - for what is Omaha's largest annual tourism event other than the baseball College World Series.  "Since we want to increase the demand ... that's why we have encouraged Airbnb to come in," he said.


Critics say Airbnb takes away business from legitimate hoteliers, and deprives municipalities of tax revenue.  New York Attorney General Eric Schneiderman last month said he is examining whether the service violates state laws on subletting.

TAKEAWAY:  We don't see it as a threat to the hotel companies.


Alaska cruising - Port Metro Vancouver’s 2014 Alaska cruise season looks to be on par with a strong 2013.  Some 812,000 passengers on 243 calls by 29 ships are forecast. This compares to 812,398 passengers on 235 calls by 29 ships last year, a 22% increase in passengers over 2012.

TAKEAWAY:  This data point suggests a slight decline in Alaska demand for 2014.


China Economy - HSBC China April manufacturing PMI 48.1 vs 48.3 flash, 48.0 in March - new orders and new export orders decrease.

TAKEAWAY:  China macro continues to signal weakness


Las Vegas Housing Recovery - recently developers laid out plans to build the long-delayed, bankruptcy-plagued Park Highlands community, with 15,000 homes built in two phases starting by early 2015. The 2,700 acre project near Aliante Parkway and the 215 Beltway is expected to cost $3.2 billion over 15 years of construction. 

TAKEAWAY:  While an optimistic plan, recent data indicate Southern Nevada new home sales were down 22% YoY during Q1 2014, with about 1,300 home sold.  Also, approximately 40% of all Las Vegas home owners remain underwater. 


Hedgeye remains negative on consumer spending and believes in more inflation.  Following  a great call on rising housing prices, the Hedgeye Macro/Financials team is turning decidedly less positive. 

TAKEAWAY:  We’ve found housing prices to be the single most significant factor in driving gaming revenues over the past 20 years in virtually all gaming markets across the US.


Monday Mashup: YUM, BOBE and More

*Reminder: We’re hosting a call with Pat Grismer, CFO of Yum! Brands, on Tuesday, May 6th at 11am EST to talk succession planning, Taco Bell breakfast and China.

Investment Ideas

The table below lists our current Investment Ideas as well as our Watch List – a list of potential ideas that we are in the process of evaluating.  We intend to update this table regularly and will provide detail on any material changes.


Monday Mashup: YUM, BOBE and More - chart1



BOBE – We’re adding Bob Evans to our Investment Ideas list as a long.  Activist Sandell Asset Management has identified significant opportunities for value creation at the company.  We, here at Hedgeye, tend to think BOBE would also benefit from a transition to an asset light model.

Recent Notes

04/28/14  Monday Mashup: Adding ZOES, BOBE to the Watchlist

04/30/14  PNRA: Much Noise, Little Clarity

05/01/14  YUM: Conversation with CFO About Succession Planning

05/02/14  New Best Idea: Long BOBE

05/02/14  Employment Data: Beyond the Headline Numbers

Earnings Calls This Week

05/05/14  TXRH earnings call 5:00pm EST

05/06/14  TAST earnings call 8:30am EST

05/06/14  ARCO earnings call 10:00am EST

05/06/14  FRGI earnings call 4:30pm EST

05/06/14  PBPB earnings call 5:00pm EST

05/06/14  CHUY earnings call 5:00pm EST

05/07/14  PZZA earnings call 10:00am EST

05/07/14  THI earnings call 2:30pm EST

05/08/14  WEN earnings call 10:00am EST

05/08/14  JMBA earnings call 5:00pm EST

05/09/14  BLMN earnings call 9:00am EST

Chart of the Day

Monday Mashup: YUM, BOBE and More - chart2

Recent News Flow

Monday, April 28th

  • PNRA downgraded to underperform at Longbow Research with a $138 PT.
  • BOBE appointed new independent directors Kevin Sheehan, Kathy Lane and Larry McWilliams to its Board of Directors.  Gordon Gee stepped down from the board effectively immediately, while Larry Corbin and Robert Lucas will be retiring from the board when their terms expire.
  • BOBE Sandell essentially deemed BOBE’s announcement inadequate, calling it a “knee-jerk reactionary step.”
  • PZZA Papa John’s aired a TV commercial featuring NBA All-Star Paul George of the Indiana Pacers promoting its new Sweet Chili Chicken Pizza.

Tuesday, April 29th

  • THI launched its newest drink, Frozen Hot Chocolate, across all U.S. restaurants.
  • PZZA declared a quarterly dividend of $0.125 per common share payable May 23, 2014 to shareholders of record at the close of May 12, 2014.
  • DRI announced that Chief Restaurant Operations Officer, Dave Pickens, will retire effective May 23.  DRI will not replace Pickens and plans to eliminate the position altogether.

Wednesday, April 30th

  • RRGB announced it has signed purchase agreements to acquire 32 franchised restaurants in the U.S. and Canada for approximately $40M.
  • NDSL announced the opening of its first MA location in Shrewsbury with franchisee operator, Hamra Enterprises.

Thursday, May 1st

  • PNRA was upgraded to positive at Susquehanna with a $184 PT.
  • YUM announced that Chairman and CEO David Novak will become Executive Chairman on Jan. 1, 2015, transitioning from his current role.  At this time, Greg Creed, Preisdent of Taco Bell, will become the next CEO of Yum! Brands.  Novak will then form the Office of the Chairman, which will include Sam Su (YUM Vice-Chairman and Chairman/CEO of the China Division) and Greg Creed.  According to the press release, "This new Office of the Chairman will partner as a triumvirate on overall corporate strategy and leadership development to propel continued growth."
  • JMBA is re-introducing its Fruit Refreshers with coconut water for the summertime.  The Fruit Refreshers are available in three flavors: Pina Colada, Tropical Mango and Island Strawberry.
  • KKD upgraded to buy at Sidoti.

Friday, May 2nd

  • BAGL board authorized a $20M repurchased program.
  • WEN new product team was honored with the Hot N’ Juicy Award for its Pretzel Bacon Cheeseburger.
  • FRSH Papa Murphy’s IPO priced at $11.00 per share, at the low end of the expected $11.00 to $13.00 range and had an underwhelming day trading, up only +0.46% at the close.

U.S. Macro Consumption

It was a bit of a bounce back week for consumer discretionary stocks.  Following several weeks of underperformance, the XLY (+1.3%) outperformed the SPX (+1.0%) last week.  In aggregate, casual dining stocks outperformed the broader index, while quick service stocks underperformed.  The Hedgeye U.S. Consumption Model reverted back to neutral, now flashing green on 6 out of 12 metrics.


Monday Mashup: YUM, BOBE and More - chart3

XLY Quantitative Setup

From a quantitative setup, the sector remains bearish on an intermediate-term TREND duration.


Monday Mashup: YUM, BOBE and More - chart4

Casual Dining Restaurants

Monday Mashup: YUM, BOBE and More - chart5


Monday Mashup: YUM, BOBE and More - chart6

Quick Service Restaurants

Monday Mashup: YUM, BOBE and More - chart7


Monday Mashup: YUM, BOBE and More - chart8




Howard Penney

Managing Director


Fred Masotta


Over the Waterfall?

Client Talking Points


Did the 10-year US Treasury Yield just go over the waterfall of interconnected risk? After one of the more epic 2 hour moves I’ve ever seen for the 10-year yield (between 8:30-10:30am on Friday), my long-term TAIL risk line of 2.60% broke (2.58% this morning). Gold is breaking out again and European stocks don’t like it inasmuch as high multiple US Growth Stocks won’t. 


After frustrating people who missed the rip higher to $1380 in early March, Gold has been consolidating and finally broke out above my immediate-term TRADE momentum line of $1292 on Friday. There is 0% coincidence in that after the 10-year yield gave it direction. Gold loves falling bond yields.


Europe is down hard this morning (Germany's DAX -1.3%) after most European Equity markets failed to make higher-highs last week. While EuroStoxx600 was up +1.3% last week to +2.9% beats being long the Russell2000 (down -3.0% YTD), it is May… and I’m not into the "Buy in May and Pray" thing.

Asset Allocation


Top Long Ideas

Company Ticker Sector Duration

Hologic is emerging from an extremely tough period which has left investors wary of further missteps. In our view, Hologic and its new management are set to show solid growth over the next several years. We have built two survey tools to track and forecast the two critical elements that will drive this acceleration.  The first survey tool measures 3-D Mammography placements every month.  Recently we have detected acceleration in month over month placements.  When Hologic finally receives a reimbursement code from Medicare, placements will accelerate further, perhaps even sooner.  With our survey, we'll see it real time. In addition to our mammography survey. We've been running a monthly survey of OB/GYNs asking them questions to help us forecast the rest of Hologic's businesses, some of which have been faced with significant headwinds.  Based on our survey, we think those headwinds are fading. If the Affordable Care Act actually manages to reduce the number of uninsured, Hologic is one of the best positioned companies.


Construction activity remains cyclically depressed, but has likely begun the long process of recovery.  A large multi-year rebound in construction should provide a tailwind to OC shares that the market appears to be underestimating.  Both residential and nonresidential construction in the U.S. would need to roughly double to reach post-war demographic norms.  As credit returns to the market and government funded construction begins to rebound, construction markets should make steady gains in coming years, quarterly weather aside, supporting OC’s revenue and capacity utilization.


Darden is the world’s largest full service restaurant company. The company operates +2000 restaurants in the U.S. and Canada, including Olive Garden, Red Lobster, LongHorn and Capital Grille. Management has been under a firestorm of criticism for poor performance. Hedgeye's Howard Penney has been at the forefront of this activist movement since early 2013, when he first identified the potential for unleashing significant value creation for Darden shareholders. Less than a year later, it looks like Penney’s plan is coming to fruition. Penney (who thinks DRI is grossly mismanaged and in need of a major overhaul) believes activists will drive material change at Darden. This would obviously be extremely bullish for shareholders and could happen fairly soon driving shares materially higher.

Three for the Road


Yield Spread (10yr minus 2yr) coming in hot to +216bps - fresh YTD low (bearish for Financials $XLF) @KeithMcCullough


"Courage is fear holding on a minute longer." -General George Patton


Sorry, Vladimir. The Russian stock market continues to crash. It is down 20.7% year-to-date.

Hedgeye Statistics

The total percentage of successful long and short trading signals since the inception of Real-Time Alerts in August of 2008.

  • LONG SIGNALS 80.43%
  • SHORT SIGNALS 78.35%

Just Charts: Sticking With What Works

Just Charts: Sticking With What Works - chart1


Consumer Staples traded in-line with the broader market last week, rising 0.9%.  XLP is up 2.8% year-to-date versus the SPX at 1.8%. The coming week is marked by a number of earnings releases.


Earnings Calls (in EST):


Monday (5/5):  TSN (9am)

Tuesday (5/6):  IFF (10am); HSH (10:30am); NUS (11am)

Wednesday (5/7):  BUD (9am); MDLZ (10am); TAP (11am and 2pm)

Thursday (5/8):  HAIN (8:30am); DF (9am); THS (9am); LNCE (9am); MNST (5pm)

 Friday (5/9):  POST (9am)



For the last two months, XLP is bullish on immediate term TRADE and intermediate term TREND durations from a quantitative set-up.


Just Charts: Sticking With What Works - chart2


The Hedgeye U.S. Consumption Model shows a muted outlook over recent weeks, with 6 of the 12 metrics flashing green (up from only 3 two week ago). 


Just Charts: Sticking With What Works - chart3


Despite the bullish quantitative set-up for the sector, we continue to believe that the group is facing numerous headwinds, including:


  • U.S. consumption growth is slowing as inflation rises, in-line with the Macro team’s 1Q14 theme of #InflationAccelerating, and Q2 2014 theme of #ConsumerSlowing
  • The economies and currencies of the emerging market – once the sector’s greatest growth engine – remain weak with the prospect of higher inflation in 2014 eroding real growth
  • The sector is loaded with a premium valuation (P/E of 19.4x)
  • Less sector Yield Chasing as Fed continues its tapering program
  • The high frequency Bloomberg weekly U.S. Consumer Comfort Index (recently rescaled for cosmetic and not component reasons) has not seen any real improvement over the past 6 months, but improved to 37.9 versus 37.3 in the prior week

Just Charts: Sticking With What Works - chart44

Just Charts: Sticking With What Works - chart5

Just Charts: Sticking With What Works - chart6



Top 5 Week-over-Week Divergent Performances:

Positive Divergence:  ENR 17.3%; LO 8.6%; EL 4.7%; DPS 4.5%; HLF 3.7%

Negative Divergence:  AVP -8.6%; BG -6.1%; BNNY -4.5%; NWL -4.0%; BUD -2.6%



Last Week’s Research Notes


Quantitative Setup

In the charts below we look at the largest companies by market cap in the Consumer Staples space from both a quantitative perspective and fundamental aspect where we can offer one.  As you will see over time, sometimes our fundamental view does not align with the quantitative setup (though not often).


BUD – stiff selloff on a bearish volume signal, but didn’t quite break 105.23 TREND support yet


Just Charts: Sticking With What Works - chart7



DEO – still bearish TREND (despite the entire world chasing low-beta consumer staple yield); TREND resistance = $125.33


Just Charts: Sticking With What Works - chart8



KO – slow-growth-yield-chasing remains in vogue; TREND support = $39.81


Just Charts: Sticking With What Works - chart9



PEP – low-volume ramp as of late, but the bullish TREND breakout remains intact with $84.18 support


Just Charts: Sticking With What Works - chart10



GIS – still one of the best looking charts on this list; bullish intermediate-term TREND support = $50.73


Just Charts: Sticking With What Works - chart11



MDLZ – held its recent breakout from its TREND base ($34.42 support)


Just Charts: Sticking With What Works - chart12



KMB – in spite of the scare a few weeks back, the stock has held $107.62 TREND support


Just Charts: Sticking With What Works - chart13



PG – correction late last week but still holding intermediate-term TREND support of $80.73


Just Charts: Sticking With What Works - chart14



MO – big bullish-yield-chasing remains a big time bullish TREND = $37.94 support


Just Charts: Sticking With What Works - chart15



PM – recipient of the style factors the market is paying for (big cap, low beta with yield); TREND support now $83.42


Just Charts: Sticking With What Works - chart16




Howard Penney

Managing Director


Matt Hedrick



Fred Masotta


Nimble and Changing

This note was originally published at 8am on April 21, 2014 for Hedgeye subscribers.

“Small, nimble, fast changing.”

-Julia Lovell


That’s how Julia Lovell described early 19th century England (relative to China) in The Opium War. “While China’s slavish people had been homogenized into speaking one language … and sympathizing in the same manners.” (pg 79)


As a company or a country, you do not want to become 17-19th century China. You don’t want to be what Europe morphed into during the 20th century either. As a Canadian capitalist who came to this country in the 1990s, I often wonder what America’s 21st century will look like. It’s not what it used to be.


Sadly, the path of least resistance is one of a slower-growth bureaucracy. That’s not my opinion. That’s the history of countries who age. So don’t do that. Do what you can to put two-feet on the floor every morning and earn your keep; fight the tyranny of government groupthink; be nimble and changing.


Nimble and Changing - nimble


Back to the Global Macro Grind


If only because I finally took a vacation, watching the US equity market melt-up to lower-highs on no volume was interesting to watch, intermittently. But one week does not an intermediate-term TREND make. As a friendly reminder, it’s late April and most major US stock market indices are down year-to-date.


Inclusive of the Dow (which we are short in Real-Time Alerts via the DIA) and US Consumer Discretionary stocks (XLY) rising +2.4-2.5% last week, they are both still -1.0% and -4.6% for 2014. If you are long America thinking this is the 1990s #StrongDollar growth cycle again, that is not good.


Two of our most outside of consensus Global Macro Themes are:

  1. US #InflationAccelerating
  2. US #ConsumerSlowing

Both have continued to play out in April. While they are bearish from a cyclical and secular US consumption growth perspective (see our Q2 Global Macro Themes deck for details), there are obvious ways to play this from the LONG side:

  1. Long Inflation, explicitly, via Commodities (DBA, UNG, CAFE, etc.)
  2. Long Inflation, protection, via Treasury Inflation (stagflation) Protection (TIPs)
  3. Long #GrowthSlowing via Bonds (TLT) and any slow-growth Equity (XLU) that looks like a bond

Those speaking the Fed’s language (“there is no inflation”) and/or #OldWall consensus (“Wall Street Bond Dealers Whipsawed on Bearish Treasury Bets” –Bloomberg this morning) don’t get this, yet. But markets do.


Speaking of YTD market scores, how about those commodity markets!

  1. CRB Food Index up another +2.7% last week to +21.6% YTD
  2. Coffee and Soybean prices up again last week to +77% and +19% YTD, respectively
  3. Natural Gas +2.6% last week to +15.8% YTD

I know, I know. As long as you don’t eat and/or plan on running the air conditioning in your house this summer, those food and utility bills (according to those speaking one language in Washington) are “non-core” to what you really need to be spending on – a $600-700 iPhone 6 upgrade!


Nimble and Changing - Chart of the Day


While I was in the pool with my kids Thursday, our long Natural Gas (UNG) and Coffee (CAFE) buy-signals in Real-Time Alerts ripped. But don’t tell the Fed that. They’re still saying what US consumers had to pay (front-month) to heat their homes this winter was “transient.”


Sure, almost every “fundamental” analyst in the Federal League can tell you that there is an “over-supply of Natural Gas” in America. But most of them won’t tell you there is an over-supply of people who were long the Dow and social media stocks on January 1st.


The YTD score doesn’t lie though; those saying there is no inflation do.


Into the belly of US “earnings season” (and away from the aforementioned asset allocations to commodities and bonds), how does all of this look from a Hedgeye Style Factoring perspective (in US Equities) in the last month?

  1. Top 25% Sales Growth Companies (Top Quartile of SP500 Companies) are -2.2% (vs. the bottom 25% being +2.2%)
  2. Top 25% EPS Growth Companies are -1.3% versus the bottom quartile being +2.6%
  3. High Beta Equities are -0.2% versus Low Beta +1.8%

Since it’s also NHL Playoff season, as Herb Brooks said in Miracle, “Again!”


Again, and again, and again… for centuries, big, fat, centrally planned countries who have devalued the purchasing power of their people in exchange for political safety have lost this war. It ends with inflation. And inflation slows both growth, and the multiples markets pay for them.


Our immediate-term Global Macro Risk Ranges are now:


SPX 1833-1880

Nasdaq 3961-4149  

USD 79.11-80.03

Brent Oil 108.21-110.62

Natural Gas 4.46-4.78

Gold 1285-1330

Corn 4.94-5.11


Best of luck out there this week,



Keith R. McCullough
Chief Executive Officer

CHART OF THE DAY: 10-YR UST "Un-friending" US Growth


CHART OF THE DAY: 10-YR UST "Un-friending" US Growth - Chart of the Day

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