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Retail Callouts (10/8): COST, NKE, WMT, WWW, JCP

Takeaway: COST beats but facing FX & gas price headwind. Jordan Flight 23 coming to Chicago. WMT making healthcare changes.

EVENTS TO WATCH

 

Thursday (10/9)

FDO - Earnings Call: 5:00pm

 

 

COMPANY HIGHLIGHTS

 

COST - 4Q14 Earnings

 

Retail Callouts (10/8): COST, NKE, WMT, WWW, JCP - 10 8 chart1

 

Takeaway:  Slight beat in the quarter both on the top and bottom line. Monthly sales numbers for September came in at 6% (FX & Gas adjusted) - that marks the 7th straight month of 5% or better comp growth. But, the reported comp was 200bps lower due to a stronger USD (+7% YY) and gas prices (average price per gallon -2% to -3%). That will be a headwind going forward.

 

FL, NKE - Jordan-brand-only Flight 23 store coming to Chicago

(http://www.chicagotribune.com/business/ct-flight-23-footaction-1008-biz-20141007-story.html?dssReturn&z=10549)

 

  • "Flight 23 at Footaction, a Jordan Brand-only store that debuted this year in New York, plans to open a 36,000-square-foot retail store in the space in June 2015, property owner Thor Equities said."

 

Takeaway: At 36,000 feet this new door in Chicago seems massive for Brand Jordan, but it's only a few thousand square feet larger than the new UA door moving in down the street. Both brands are now over $2bil in revenue and growing. These new footprints allow the brands to showcase the goods in a mono-branded format and over all we think it’s a good opportunity. Especially for NKE. Partnering with Footaction is a pretty savvy move. FA is marginal at best, and they'll do whatever Nike wants -- and they'll probably pay for a disproportionate amount of the start-up costs. Nike will handle the merchandise and branding. Footaction will sit back, write checks, and let Nike do its thing.

 

OTHER NEWS

 

WMT - Wal-Mart to End Health Insurance for Some Part-Time Employees

(http://online.wsj.com/articles/wal-mart-to-end-health-insurance-for-some-part-time-employees-1412694790)

 

  • "Wal-Mart Stores Inc. is cutting health insurance for another 30,000 part-time workers and raising premiums for its other employees, as U.S. corporations push to contain costs in the wake of the federal health-care law."
  • "Autumn is typically when U.S. companies unveil changes to employee insurance plans. This is the first such enrollment period since employers could assess the full financial impact of the federal health-care overhaul, and it is a key moment as companies work to lower their spending ahead of looming taxes on the most generous plans."
  • "Several other retailers already have moved away from providing health insurance to part-time workers. Target Corp. earlier this year said it would stop offering such benefits, citing options available through public exchanges. Home Depot Inc. last year ended health-care coverage for almost 20,000 part-time workers, while United Parcel Service Inc. cut coverage for workers’ spouses who had access to insurance through their own employers.

 

WMT - Walmart Introduces Cancer Care Benefits for Associates at Mayo Clinic

(http://news.walmart.com/news-archive/2014/10/07/walmart-introduces-cancer-care-benefits-for-associates-at-mayo-clinic)

 

  • "Building on its innovative program that has enhanced the quality of health care for its associates, Walmart announced it is expanding its Centers of Excellence program to include three cancers with Mayo Clinic, one of the nation’s leading health care providers."
  • "Effective Jan. 1, 2015, Walmart associates and family members enrolled in the company’s health reimbursement account plans or health savings account plan who are diagnosed with breast, lung or colorectal cancer can obtain a review of their medical records by Mayo Clinic, and when recommended, receive care covered at 100 percent for on-site visits at Mayo Clinic Cancer Center locations in Rochester, Minn., Jacksonville, Fla., or Phoenix, Ariz."

 

WWW - Wolverine Worldwide Appoints Melissa Howell Senior Vice President of Global Human Resources

(http://phx.corporate-ir.net/phoenix.zhtml?c=88408&p=irol-newsArticle&ID=1974955)

 

  • "Wolverine Worldwide announced the appointment of Melissa A. Howell to the position of Senior Vice President of Global Human Resources. Ms. Howell will report directly to Blake Krueger, Wolverine Worldwide's Chairman, Chief Executive Officer and President."
  • "Ms. Howell has more than 24 years of experience in human resource management with General Motors Company, one of the world's largest automobile companies, with well over 200,000 employees in over 150 countries.   Ms. Howell most recently served as Senior Vice President of Global Human Resources and also held numerous other human resource leadership roles during her time with the company."

 

JCP - B. CRAIG OWENS TO JOIN JCPENNEY BOARD OF DIRECTORS

(http://ir.jcpenney.com/phoenix.zhtml?c=70528&p=irol-newsCompanyArticle&ID=1975229)

 

  • "J. C. Penney Company, Inc. today announced that B. Craig Owens, a highly accomplished and respected executive in the consumer food and beverage industry, has been elected to its Board of Directors. Mr. Owens recently retired from his post as chief financial officer and chief administrative officer of Campbell Soup Company, where he led its finance, supply chain and information technology organizations."


DG - Dollar General rolls out digital coupons program

(http://www.retailingtoday.com/article/dollar-general-rolls-out-digital-coupons-program)

 

  • "Dollar General’s new Fast Way to Save program, which runs from now through Nov. 15, uses the retailer’s new DG Digital Coupon platform powered by Coupons.com to offer its customers more than 100 in additional digital coupon savings."

 

Tesco asks another senior executive to step aside

(http://www.ft.com/intl/cms/s/0/da0ae8d6-4de6-11e4-adfe-00144feab7de.html?siteedition=intl#axzz3FYGAJFFv)

 

  • "Tesco has asked a fifth senior executive to step aside as it probes an estimated £250m overstatement of its expected profits."
  • "The development came as shares in Tesco rose almost 5 per cent on buyer interest in Dunnhumby, the data consultancy that helped Tesco create its Clubcard loyalty scheme. Several private equity and trade buyers are interested in the business, which is now wholly owned by Tesco and could be worth up to £2bn, according to people familiar with the situation."

LEISURE LETTER (10/08/2014)

Tickers: BYI, CZR, HT, MHGC, CCL

EVENTS

  • Wed Oct 8  HT Investor Day
  • Thurs Oct 9:  Todd Jordan in Macau

COMPANY NEWS

BYI –announced that a special meeting of its stockholders has been scheduled for November 18 to consider and vote on a proposal to approve the previously announced agreement and Plan of Merger with Scientific Games Corporation

Takeaway: The merger appears on track to occur prior to year-end 2014.

 

CZR – filed an 8K and disclosed Wilmington Savings Fund Society issued what the Wilmington called a purported notice of default.  In response to the notice, CZR's responded that the company will review the notice and respond within the 60 days allowed to avoid a default.

Takeaway: Could this be the beginning of a long anticipated debt reorganization?

 

HT – in a precursor to the Company's investor day, announced preliminary Q3 2014 comparable RevPAR of +9.4% based on ADR +5% and occupancy +3.44%, consoliated hotel RevPAR of +12% based on ADR +6.9% and occupancy +3.94%

Takeaway: Early indications of very strong coastal market hotel performance during Q3 2014.

 

MHGC (NY Post) started a formal sales process to sell the 928-room Hudson Hotel located on Columbus Circle and is seeking $500M and is also seeking to sell the 194-room Delano hotel in Miami for $200M, according to sources

Takeaway: Hmmm, Hilton has $1.95 billion of Waldorf proceeds to reinvest and both assets could fit under the Curio flag.

 

CCL – will construct a training facility for deck and technical officers in Almere, Netherlands. The company already has a maritime training center in Almere, the Center for Simulator Maritime Training (CSMART). The new CSMART will be three times larger, according to Carnival Corp. Construction is scheduled to start next year, and a 2016 opening is planned. The facility will serve 6,500 deck and technical officers per year from all nine of Carnival Corp.’s cruise brand, the company said.

 

CCL (Cruise Critic) A nine-night Japan sailing onboard Diamond Princess continues to see delays and port cancellations due to two back-to-back typhoons in the Pacific Ocean. The sailing, scheduled to depart October 6, has already been pushed back to October 8 due to Typhoon Phanfone, but now Typhoon Vongfong is hampering the ship's itinerary as well. Princess is giving each passenger a future cruise credit of 50% of the cruise fare paid for the voyage. The credit may be used on any Princess cruise booked before the end of 2015.

Takeaway:  Princess Japan back in the news 

 

AirBnB – San Fransisco Approves Airbnb Law – Addressing the controversial and fast-growing practice of ad-hoc hotels in homes, San Francisco Board of Supervisors agreed to legalize but rein in short-term residential rentals by passing the so-called "Airbnb law".  The law allows only permanent residents to offer short-term rentals, sets up a new city registry for hosts, requires collection of the hotel tax, limits entire-home rentals to 90 days a year and establishes guidelines for enforcement by the Planning Department. It is slated to take effect February 2015.

Takeaway:  AirBnB finally gets recognition in SF

INDUSTRY NEWS

Mainlanders shun Hong Kong, flock to Macau Macau Business
750,000 mainlanders poured into Macau during this year’s golden week of Chinese National Day holidays, +17% YoY.  The surge in Macau was the reverse side of a slowing of growth in the number of mainlanders visiting Hong Kong as pro-democracy demonstrations there acted as a deterrent to tourism.

Takeaway:  Visitation has been the lone bright spot.  Some people think there is less foot traffic to the casinos but it's a guessing game.

 

Hong Kong CEO Corruption Investigation (The Sydney Morning Herald) Chief Executive CY Leung faces questions over secret $7m payout from Australian firm.  The payments were made in two installments, in 2012 and 2013,  after he became Hong Kong's top official. The arrangement is outlined in a secret contract dated December 2, 2011, before he was elected chief executive, in which Australian engineering company UGL agreed to pay the Beijing-backed politician £4 million - related to a deal in which UGL bought an insolvent 200-year old British property services firm he was associated with called DTZ Holdings, whose prospects depended on Mr Leung's network of managers and clients in Hong Kong and mainland China.

Takeaway: When protests don't get the desired results, the protesters dig deeper into personal lives and conduct.


China Warns Against HK-style in China (IBN Live) Wary over the pro-democracy protests in Hong Kong spreading to China, the official media said that any attempt to launch a "color revolution" in the mainland would be futile and a day dream. "Any intention among a small number of people to hold a color revolution on the mainland through Hong Kong would be a daydream," the ruling Communist Party of China's official mouthpiece, the People's Daily said. In a front-page commentary under the headline, "Determined to protect the rule of law in Hong Kong," the newspaper said that democracy without the rule of law would only result in chaos.

Takeaway: Protests unlikely on Mainland China.

 

China Corruption Crackdown (Xinhua News) A total of 162,629 phantom staff on the government payroll have been removed since a national campaign targeting corruption and bureaucracy was launched last year. Hebei Province saw the largest number of such officials, with 55,793 found to be getting paid even though they never worked, the Communist Party of China flagship newspaper People's Daily.

 

(wantchinatimes.com) So far, five out of 13 members of the Shanxi Provincial Committee of the Communist Party of China have been detained for graft. The high percentage of officials being probed for corruption is rare among provincial cities and provinces around China

Takeaway: The corruption crackdowns continue.

 

Philippines May Penalize Delayed Casino Opening (themalaysianinsider.com) The Philippines' gambling regulator will penalise the local affiliate of Japan's Universal Entertainment Corp if it fails to open a US$2 billion (RM7 billion) casino-resort along Manila Bay next year as planned, the head of the state authority said. Tiger Resorts Leisure and Entertainment Inc, the local affiliate of Universal which is controlled by gaming magnate Kazuo Okada, said last month it was likely to launch the first phase of its casino-resort project in 2016, a year later than planned.

Takeaway: PAGCOR threatening penalties for delayed openings.

 

Cabo San Lucas Hotel Update – While Mexican authorities report that 100% of electrical services have been restored in Los Cabos and in Baja California Sur, the reopening of hotels will be much slower.  The following are hotel openings that have been confirmed:

• Sheraton Hacienda del Mar Golf & Spa Resort, reopening the first phase of 200 rooms, pools, beach areas and kids club on Nov. 1. Second phase of the remaining 70 rooms will end at the end of November. The opening of the DeCorte restaurant is to be determined.

• Westin Los Cabos, not expected to open before Oct. 31.

• Hilton Los Cabos, taking no reservations until Jan. 15, 2015.

• One&Only Palmilla is not taking reservations until Dec. 15, but will know by Oct. 15 whether the resort will be open for the Christmas holidays.

• Hyatt Ziva Los Cabos will reopen April 30, and Hyatt Place Los Cabos will reopen June 1.
• Holiday Inn Resort Los Cabos is closed until Dec. 1

• Holiday Inn Express Cabo San Lucas is open with 60 guestrooms, and 35 rooms, the pool and business center are closed “indefinitely” for repairs

• Esperanza, an Auberge Resort, closed until Dec. 15.

Takeaway: The slow process of reopening a hotel in remote locations with limited access to rebuilding supplies. We hope the properties re-open for the busy December holidays and New Year's celebrations.


Lourve Hotels – Louvre Hotels has more than 110 operating properties under the Premiere Classe, Campanile, Kyriad, and Golden Tulip brands in 47 countries.  US-based private equity group Starwood Capital is seeking buyers for its international budget hotel operator Louvre Hotels Group (LHG), according to French media reports, with the sale expected to raise €1.2 - €1.5 billion, representing more than 10 times LHG's annual gross operating profit. 

Takeaway: Starwood Capital looking to harvest portfolio gains.

 

Cruise Lines Cancel West Africa – Several cruise lines have changed itineraries due to concerns over Ebola, canceling port stops in West Africa. On Holland America Line’s 35-day African Explorer cruise due to depart November 15 aboard the MS Rotterdam, from Cape Town, South Africa, to Southampton, England, three ports of call in Ghana, Gambia and Senegal will be replaced with an added overnight in Cape Town, an added overnight in Cape Verde and a stop in Tangier, Morocco,

Takeaway: This is what is being reported as the cause of the sharp stock declines in the cruiser space yesterday and concerns on European visitation.  It's a mere excuse to mask the already underlying worsening trends in Europe. 

MACRO

China Macro – September HSBC Services PMI 53.5 vs 54.1 in August

 

China Golden Week Retail Sales (Reuters) retail sales during the "Golden Week" holiday slowed to 12.1% from a 13.6% rise last year. The Ministry of Commerce said retailers and catering firms chalked up sales of 975B yuan ($158B) during the week-long holiday.

 

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.


MORTGAGE DEMAND - THE SOFT STREAK ENDS AT 12

Takeaway: Housing demand shows its first sign of life in months, rising 2.4% W/W and 3.0% Q/Q (4Q14 v 3Q14).

Our Hedgeye Housing Compendium table (below) aspires to present the state of the housing market in a visually-friendly format that takes about 30 seconds to consume. 

 

*Note - to maintain cross-metric comparability, the purchase applications index shown in the table below represents the monthly average as opposed to the most recent weekly data point.

 

MORTGAGE DEMAND - THE SOFT STREAK ENDS AT 12  - Compendium 100814

 

Today's Focus: MBA Mortgage Applications

 

MBA Mortgage Applications

The Mortgage Bankers Association today released its weekly mortgage applications survey data for the week ended October 3rd. 

  • Total Mortgage Applications rose +3.8% W/W as the sub-170 streak on the Purchase index – the longest such soft streak since April of 1995 – ends at 12 weeks with purchase demand rising +2.4% sequentially to start 4Q. 
  • Purchase Activity is off to a good start in 4Q, tracking +3.0% Q/Q and down just -5% Y/Y. As the first chart below shows, the comps ease notably against 4Q13 and will ease further into 1Q next year.
  • Refinance activity rose +5% W/W sequentially alongside easy comps and a -3 bps drop in the 30Y FRM contract.  After an expedited +14 bps, 4 week advance in rates to 4.39% on September 19th, we’ve retraced much of that over the last two weeks.  down to 4.30%.

 

 MORTGAGE DEMAND - THE SOFT STREAK ENDS AT 12  - Purchase Qtrly

 

MORTGAGE DEMAND - THE SOFT STREAK ENDS AT 12  - Purchase   Refi YoY   

 

MORTGAGE DEMAND - THE SOFT STREAK ENDS AT 12  - Purchase Apps LT w summary stats 

 

MORTGAGE DEMAND - THE SOFT STREAK ENDS AT 12  - Composite Apps LT w summary stats 

 

MORTGAGE DEMAND - THE SOFT STREAK ENDS AT 12  - 30Y FRM

 

 

 

About MBA Mortgage Applications:

The Mortgage Bankers’ Association’s mortgage applications index covers more than 75% of mortgage applications originated through retail and consumer direct channels. It does not include loans delivered through wholesale broker and correspondent channels. The MBA mortgage purchase applications index is considered a leading indicator of single-family home sales and construction. Moreover, it is the only housing index that is released on a weekly basis. 

 

Frequency:

The MBA Purchase Apps index is released every Wednesday morning at 7 am EST.

 

  

Joshua Steiner, CFA

 

Christian B. Drake

 


Early Look

daily macro intelligence

Relied upon by big institutional and individual investors across the world, this granular morning newsletter distills the latest and most vital market developments and insures that you are always in the know.

#GROWTHSLOWING

Client Talking Points

EUROPE

ECB President Mario Draghi’s drugs were good for a no-volume market bounce, but his EUR devaluation did nothing for the economy and now the DAX has round-tripped, selling off right back to where it was pre-Jackson Hole (AUG lows) – 0 + 0 still = 0; all European Equity indices = bearish TREND.

VIX

The front month volatility just punched a higher-high (than the AUG closing high) and #VolatilityAsymmetry (see our JUL 2014 slide deck) remains very much in play off the all-time lows in macro market volatility as both the RUT and SPX are now bearish TREND.

SECTORS

While the “oil is down, buy consumer” thing was intellectually stimulating, it has been a depressing position to have – Discretionary (XLY) now down -1.8% year-to-date alongside Industrials (XLI) -1.7% - both the early and mid-cycle sectors are now seeing what we call #Quad4 deflation.

Asset Allocation

CASH 68% US EQUITIES 0%
INTL EQUITIES 6% COMMODITIES 2%
FIXED INCOME 24% INTL CURRENCIES 0%

Top Long Ideas

Company Ticker Sector Duration
EDV

The Vanguard Extended Duration Treasury (EDV) is an extended duration ETF (20-30yr). Now that we have our first set of late-cycle economic indicators slowing in rate of change terms (ADP numbers and the NFP number), it's time to really think through the upcoming moves of this bond market. We are doubling down on our biggest macro call of 2014 - that U.S. growth would slow and bond yields fall in kind.

TLT

Fixed income continues to be our favorite asset class, so it should come as no surprise to see us rotate into the Shares 20+ Year Treasury Bond Fund (TLT) on the long side. In conjunction with our #Q3Slowing macro theme, we think the slope of domestic economic growth is poised to roll over here in the third quarter. In the context of what may be flat-to-decelerating reported inflation, we think the performance divergence between Treasuries, stocks and commodities may actually be set to widen over the next two to three months. This view remains counter to consensus expectations, which is additive to our already-high conviction level in this position.  Fade consensus on bonds – especially as growth slows. As it’s done for multiple generations, the 10Y Treasury Yield continues to track the slope of domestic economic growth like a glove.

RH

Restoration Hardware remains our Retail Team’s highest-conviction long idea. We think that most parts of the thesis are at least acknowledged by the market (category growth, real estate expansion), but people are absolutely missing how all the pieces are coming together to drive such outsized earnings growth over an extremely long duration. The punchline of our real estate analysis is that a) RH stores could get far bigger than even the RH bulls seem to think, b) Aside from reconfiguring 66 existing markets, there’s another 19 markets we identified where the spending rate on home furnishings by people making over $100k in income suggests that RH should expand to these markets with Design Galleries, and c) the availability and economics on large properties for all these markets are far better than people think. The consensus is looking for long-term earnings growth of 28% -- we’re looking for 45%.  

Three for the Road

TWEET OF THE DAY

10yr UST yield is crashing (-22% YTD), just fyi

@KeithMcCullough

QUOTE OF THE DAY

The drops of rain make a hole in the stone not by violence but by oft falling.

-Lucretius

STAT OF THE DAY

According to a PricewaterhouseCoopers Survey shoppers remain cautious on the economy and are concerned about disposable income, for the Holiday season the average household will spend $684, down from $735 in 2013.


Adapt and Evolve

This note was originally published at 8am on September 24, 2014 for Hedgeye subscribers.

“When we are no longer able to able to change a situation – we are challenged to change ourselves.”

-Viktor E. Frankl

 

As egotistical as many successful stock investors seem on the outside, a common attribute for many of them is, ironically, their ability to change their minds.  Now often some poor analyst in their employ is blamed for the mistake, but when the facts and/or thesis changes, the position is rightfully exited.

 

Hubris is a dangerous thing and in investing it can be downright deadly.  The ability to adapt to new information and admit mistakes, on the other hand, can be an immensely valuable skill.

 

The ability to adapt, of course, is hardly new to our species.   A recent article in Smithsonian magazine based on new research actually argues that the ability to adapt is maybe the most important skills and has enabled homo sapiens to thrive over the last 1.85 million years. 

 

According to this article:

 

“What results from these analyses is the realization that there is no simple, clear picture; no obvious mechanism as to why the genus we know as Homo came to arise and dominate. What we've long thought of as a coherent picture—the package of traits that make Homo species special—actually formed slowly over time.”

 

So if it was not our unique skill set that allowed us to thrive, what was it? Well, according to the article, the answer is quite straight forward:

 

“That early Homo species would have had to cope with this constantly-changing climate fits with the idea that it was not our hands, nor our gait, nor our tools that made us special. Rather, it was our adaptability.”

 

Adapt and Evolve - dj7

 

So, of course, it begs the questions: when are the Old Wall consensus economists going to adapt their projections for 3% U.S. economic grow in perpetuity?

 

Back to the Global Macro Grind...

 

The 3% growth projection noted above may seem like a non-sequitur, but the comment was actually born of out attending the Bloomberg Markets Most Influential conference earlier this week and comments from William C. Dudley, the President of the New York Fed.  Since Bloomberg radio and TV called him one of the smartest men in the world, it seems only prudent that we pay attention to his comments.

 

Aside from his comments that all will indeed be well if we hit 3% in growth in perpetuity, Dudley also indicated he doesn’t have a lot of faith in that happening.  We’ve paraphrased below, but a couple of interesting comments from Dudley were as follows:

  • The Fed is difficult to manage as it relates to the economic estimates that come in from various methods (Takeaway: this transparency and democracy stuff related to setting policy may be less effective if the inputs aren’t systematic, which they are not);
  • Dudley said not to overweight the “dots . . . he has a wide confidence interval in his dots (Takeaway: we would agree as the fascination with the dots is reaching near epic proportions, so they are certainly soon to be irrelevant);
  • According to Dudley, the Fed doesn’t care about the dollar per se, but too strong of a dollar is an economic deterrent (Takeaway: the Fed cares about the dollar, and, shockingly still doesn’t get the economic value of a strong dollar policy); and
  • There are reasons to be patient on monetary policy and as an example monetary policy was tightened too quickly during the Great Depression (Takeaway: if you didn’t know whether Dudley was dovish, now you know.  But really Bill, a Great Depression reference?).

On one hand, we certainly appreciate Dudley acknowledging the flaw in forecasting--it shows his adaptability.  Conversely, the Great Depression and strong dollar fear mongering is a little disturbing, but certainly difficult to read much from brief comments on a thirty minute panel!  And who are we to judge...

 

As for Hedgeye, we don’t know what the Fed is going to do next and frankly despite my comments above, Fed watching is a bit of fool’s errand.  In our analysis, as the data changes, we adapt.  It is that simple.

 

The most recent change for us recently has been the view that the U.S. economy is now likely in what we call Quad 4, which is an environment in which growth is slowing, inflation is slowing, and monetary policy is loose.  

 

Especially on inflation, this is an about face for us.  But that fact is that headline inflation is now down to +1.8% for the quarter, which is a deceleration.    Along with that many commodities are now deflating incrementally, and Brent Crude in particular is down more than -12% on the year.

 

Even as inflation is decidedly decelerating, we do continue to get mixed data on growth (some good, some bad).  But as my colleague Darius Dale recently highlighted, we think it’s important to highlight the risk of #GrowthSlowing given where consensus expectations for growth remain – i.e. out to lunch. Moreover, the lack of dispersion among forecasts remains a key risk.

 

Specifically, in the previous five quarters, the standard deviation of growth is 0.44% and peak to trough is 122 basis points.   Meanwhile the forward consensus projections for the next five quarters have a standard deviation of 0.02% and peak/trough spread of 18 basis points.  We don’t know much, but we do know those projections will be missed. 

 

Our immediate-term Global Macro Risk Ranges are now (with intermediate term TREND signal in brackets)

 

RUT 1115-1149 (bearish)

Shanghai Comp 2281-2355 (bullish)

VIX 13.14-14.99 (bullish)

Pound 1.62-1.64 (bullish)

Copper 3.01-3.09 (bearish)

 

Keep your head up and stick on the ice,

 

Daryl G. Jones

Director of Research

 

Adapt and Evolve - chart of day


THE HEDGEYE MACRO PLAYBOOK

Takeaway: The Hedgeye Macro Playbook is a daily 1-page summary of our core ETF recommendations, investment themes and noteworthy quantitative signals.

CLICK HERE to view the document. In today’s edition, we highlight:

 

  1. The round-trip in the performance of DM Equities during the YTD and how TACRM was out in front of that
  2. The burgeoning illiquidity risk in domestic small caps

 

Best of luck out there,

 

Darius Dale

Associate: Macro Team


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