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Poll of the Day Recap: 65% Say Yes, the S&P 500 Will Cross 2,000 This Year

Takeaway: 65% said YES; 35% said NO.

As bond yields crash year-to-date and the Russell delivers negative returns, the world’s most consensus short position (SPX Index + E-mini) hit another new high on no volume yesterday.
 

Today’s poll question was: Is the S&P 500 going to cross 2,000 this year?
 

Poll of the Day Recap: 65% Say Yes, the S&P 500 Will Cross 2,000 This Year - nyse
 

At the time of this post, 65% said YES; 35% said NO.
 

(Voters sharply swung so much in one way, that we didn’t receive any comments on why people voted NO.)
 

Here’s what those who voted YES had to say:

  • “2000 is serving as a magnet, and it's only about 4 - 5% from here. Technically the chart is looking very constructive despite all the sector variances (which are not healthy). More shorts still need to be squeezed, by the time all said and done, shorts will be scared to short anything. The current pain is not severe enough for many.”
     
  • “Policy to inflate requires currency devaluation, S&P 500 only needs to rise 4% from here and it's imperative equities continue rising post Financial Crisis; so it's quite likely S&P 500 will exceed 2000 in 2014.”
     
  • “The global central banks will continue digitally printing money and artificially suppressing interest rates to push asset prices until there is a monetary crisis of some sort to force them to stop.”
     
  • “It’s already baked in. It’s a political imperative. The question is, will the S&P 2200 predictions come true, or will there be a road bump that will turn the market into road kill?”
     
  • “It will probably cross 2000, and then 1750 in the next twelve months.”
     
  • “Yes, but after summer pullback.”
     
  • “The FED cannot have the public lose confidence and stock market is harbinger of confidence.”
     
  • “The SPX will hit 2000 via the mother of all short squeezes and dovish monetary policy whereas the RUT will not revisit the March 4 high this year. I'm in Mr. McCullough's no-growth camp with the exception that I believe that if the Fed pulls out or fails then the country will find that it has actually been in a depression and the growth seen in the past 5 years was solely because of the false bottom in the economy created by the Fed.”
     
  • “Easy money pushing stocks higher.”
     
  • “The global central banks will continue digitally printing money and artificially suppressing interest rates to push asset prices until there is a monetary crisis of some sort to force them to stop.”

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Hedgeye Retail: Columbia Sportswear Acquisition Priced High, But May Expand Offerings | $COLM

Takeaway: Price seems a bit rich, but we have to ask if Columbia Sportswear could enter this category on its own.

 Hedgeye Retail: Columbia Sportswear Acquisition Priced High, But May Expand Offerings | $COLM - prana vendorhome

 

Columbia Sportswear Company Completes Acquisition of prAna Lifestyle Apparel Brand

  • "Columbia Sportswear Company...today announced that at midnight, May 30, 2014 it successfully completed its previously announced acquisition of prAna Living LLC for a purchase price of $190 million in cash, subject to customary post-close working capital adjustments."
     
  • "Purchase price of $190 million, subject to customary post-close working capital adjustments, equates to approximately 13 times prAna's projected 2014 EBITDA."
     
  • "PrAna will remain headquartered in Carlsbad, California as a wholly owned subsidiary of Columbia Sportswear Company and will continue to be led by current CEO Scott Kerslake, who will report directly to Columbia president and CEO Tim Boyle."
     

Hedgeye Retail: Columbia Sportswear Acquisition Priced High, But May Expand Offerings | $COLM - chart3 6 3 large

Takeaway From Hedgeye’s Brian McGough:

Price seems a bit rich, but we have to ask if Columbia Sportswear could enter this category on its own. We think the answer to that question is no. PrAna helps Columbia Sportswear diversify its cold weather offering and gives it instant exposure to the women's yoga market. Overall, it’s a good acquisition for Columbia Sportswear getting a brand with solid distribution but limited awareness.

 

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Editor's Note: This is a complimentary research excerpt from Hedgeye Retail sector head Brian McGough. Follow Brian on Twitter @HedgeyeRetail

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Video | McCullough Answers Questions on the Euro, Consumer Spending, Inflation and More

Here's the question-and-answer portion from our daily institutional Morning Call hosted by Hedgeye CEO Keith McCullough and Senior Macro Analyst Darius Dale.


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Daily Trading Ranges, Refreshed

Takeaway: SPX hits all-time-bubble high on one of the lowest volume days of the decade, while the Russell falls again.

Editor's note: This unlocked edition of Daily Trading Ranges was originally provided to subscribers on June 3, 2014 at 7:46 a.m EST. For more information on how you can receive these levels every morning in your inbox click here.  

 

Daily Trading Ranges, Refreshed - Slide1 large

BULLISH TRENDS

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Daily Trading Ranges, Refreshed - Slide6

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BEARISH TRENDS

 

Daily Trading Ranges, Refreshed - Slide9

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Daily Trading Ranges, Refreshed - Slide11
Daily Trading Ranges, Refreshed - Slide12

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RETAIL CALLOUTS (6/3): DG, ICSC, COLM, NKE

Takeaway: DG - margins an issue. COLM closes acquisition of Prana. NKE shakes up category leaders.

EVENTS TO WATCH

 

WEDNESDAY (6/4)

FIVE - Earnings Call: 4:30pm

 

THURSDAY (6/5)

PVH - Earnings Call: 9:00am

VNCE - Earnings Call: 9:00am

 

ECONOMIC DATA

 

ICSC - Chain Store Sales Index

 

Takeaway: A little sign of life, but numbers still below 2013 readings. Through the first 22 weeks of this year we've had 8 weeks above last years numbers and 14 below. The average beat = 63 bps and average miss = -120 bps.

 

RETAIL CALLOUTS (6/3): DG, ICSC, COLM, NKE - chart1 6 3

 

COMPANY NEWS

 

DG - 1Q14 Earnings

 

Takeaway: All in, not a disaster of a quarter for DG despite the penny miss. At least the company comped positive, while the more discretionary retailers are struggling to keep their heads in positive territory.   Margins, however, were concerning, as mix and occupancy deleverage hurt Gross Margin, while SG&A growth of 8.8% further pressured EBIT margins. At least inventories remain reasonably controlled. But one thing that concerns us is that that this was an 'easy margin compare'. This is the fifth consecutive quarter of margins being down year/year. That doesn't set a good precedent for the next few quarters.

 

RETAIL CALLOUTS (6/3): DG, ICSC, COLM, NKE - chart2 6 3

 

COLM - Columbia Sportswear Company Completes Acquisition of prAna Lifestyle Apparel Brand

(http://investor.columbia.com/releasedetail.cfm?ReleaseID=851790)

 

  • "Columbia Sportswear Company...today announced that at midnight, May 30, 2014 it successfully completed its previously announced acquisition of prAna Living LLC for a purchase price of $190 million in cash, subject to customary post-close working capital adjustments."
  • "Purchase price of $190 million, subject to customary post-close working capital adjustments, equates to approximately 13 times prAna's projected 2014 EBITDA."
  • "PrAna will remain headquartered in Carlsbad, California as a wholly owned subsidiary of Columbia Sportswear Company and will continue to be led by current CEO Scott Kerslake, who will report directly to Columbia president and CEO Tim Boyle."

 

RETAIL CALLOUTS (6/3): DG, ICSC, COLM, NKE - chart3 6 3

 

Takeaway: Price seems a bit rich, but we have to ask if COLM could enter this category on its own. We think the answer to that question is no. Prana helps COLM diversify its cold weather offering and gives it instant exposure to the women's yoga market. Overall good acquisition for COLM getting a brand with solid distribution but limited awareness.

 

OTHER NEWS

 

NKE - Nike Promotes Craig Zanon to Lead Expanded Men's Training Category 

(http://www.sportsonesource.com/news/article_home.asp?Prod=1&section=1&id=51392)

 

  • "Nike, Inc. announced a number of general management changes within key Geographies and Categories across its global business. The changes are designed to continue to drive the company’s global growth while further strengthening and diversifying its leadership bench."
  • "In an effort to continue to focus and accelerate growth across Nike’s training business, Craig Zanon will now lead an expanded and elevated role in the Men’s Training category as VP, GM of Global Men’s Training. Zanon, currently VP, GM of Global Basketball, has held a range of senior management roles in the US during his 23-year career with NIKE."
  • "Michael Jackson will take the lead in the Basketball category as VP, GM of Global Basketball. Currently VP, GM of North America Basketball…"
  • "Marc van Pappelendam, currently VP, GM of UK & Ireland becomes VP, GM of Central & Eastern Europe...Jim Reynolds becomes VP, GM of Japan, transitioning from his current role as VP, GM of Russia…"

 

BURL - Burlington Stores, Inc. Announces Appointment of Thomas A. Kingsbury as Chairman of the Board and Formation of Nominating and Corporate Governance Committee

(http://burlingtoninvestors.com/press-releases/Press-Release-Details/2014/Burlington-Stores-Inc-Announces-Appointment-of-Thomas-A-Kingsbury-as-Chairman-of-the-Board-and-Formation-of-Nominating-and-Corporate-Governance-Committee/default.aspx)

 

  • "Burlington Stores, Inc. today announced that Thomas A. Kingsbury, the Company’s Chief Executive Officer and President, has been unanimously elected by the Board of Directors to be Chairman of the Board."

 

WMT - Price competition causes historic lows in market growth

(http://www.cbsnews.com/news/as-amazon-fights-hachette-wal-mart-seeks-to-profit/)

 

  • "The latest supermarket share figures from Kantar Worldpanel, published today for the 12 weeks ending 25 May 2014, show a slowdown in grocery market growth to 1.7% – the lowest level for at least 11 years.* Supermarket price competition is prompting another drop in the level of grocery price inflation to 1.2%."

 


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