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.

NKE: NFL Uniforms Unveiled


Nike’s new NFL uniforms were unveiled today and we like what we see. Concerns over the potential for radical changes (a la Oregon Ducks) proved unwarranted. While fluorescents did make its way into the new Seattle Seahawks jerseys redesign, there was an obvious effort to respect league history (see pics below).


In typical Nike fashion, there are visible improvements to the finer elements (e.g. seem location and weight). Importantly, Nike didn’t need to make a big splash in its first big NFL reveal, it just needed to give consumers enough reason to come back and see what they come up with next and that is exactly what they did. As expected, the Nike/NFL era has started in favorable field position.



For additional perspective, here is a sense of the P&L contribution from our note titled "NKE: Eight Bucks:"


“By our math, the NFL deal, which flips from adibok to Nike in early April, will probably be around $200-$300mm in year 1. That’s the lower end of where Reebok had it. That’s also why we think Nike will double this rate in year 2. And likely grow it by 50% in year 3. If this is the case in year 1, then let’s say $200mm of it is set for delivery within Nike’s current futures window. Assuming that 85% of Nike’s US business is on the futures program, that suggests that the NFL deal helped futures by about 5%. So…22% minus 5% = 17% growth in North American futures. For what it’s worth, we have to look back to the Clinton Administration to find the last time the North American business grew at this pace – and back then the company was stuffing the channel with apparel product and was STILL half the size it is today.”


NKE: NFL Uniforms Unveiled  - NFL All 4 3 12


NKE: NFL Uniforms Unveiled  - NFL teams 4 3 12


Casey Flavin




ECB and BOE on Hold: Currency Update

No Current Position in Europe

We expect both the ECB (on Wednesday) and BoE (on Thursday) to keep their main interest rates on hold at 1.0% and 0.5%, respectively, and not to add any major non-standard measures or asset purchases.  We expect both banks to continue implementing a “wait-and-see” process to determine the impact of policy moves, including the LTROs, reduced collateral requirements, and reduced SMP sovereign bond purchases in the last two months by the ECB and increases in the BOE’s asset purchasing program (increased purchases by £50 Billion on 2/9 and remained unchanged on 3/8).


Below we present our quantitative views on the EUR/USD and GBP/USD over the near term TRADE and intermediate term TREND.


ECB and BOE on Hold: Currency Update - 11111111111. EUR


ECB and BOE on Hold: Currency Update - 11. GBP


We continue to highlight that despite pockets of optimism on the Eurozone and UK economies, recent data continues to be weak. Yesterday we received European Manufacturing PMIs, which, as the table below shows, largely declined month-over-month in March (the UK saw a positive inflection), or were at or below the 50 line that divides contraction (below) from expansion (above).  We expect a similar trend with European Services PMIs, which will be announced tomorrow.


ECB and BOE on Hold: Currency Update - 11. table


Matthew Hedrick

Senior Analyst

Impressive: SP500 Levels, Refreshed

POSITIONS: Long Utilities (XLU), Shorting Industrials (XLI) and SPY


A market that doesn’t go down and has no volume is impressive, until it isn’t. It’s April the 3rdand US Equity volumes are running down between -6-17%, daily, versus my YTD composite average. We have only had 1 down day greater than -0.7%.


Maybe that is the new normal. Maybe Growth Slowing won’t matter this time either. But right around this time in 2008, 2010, and 2011, that was a really bad risk management assumption to make.


The most important lines across durations in my model are now: 

  1. Immediate-term TRADE overbought = 1424
  2. Immediate-term TRADE support = 1407
  3. Intermediate-term TREND support = 1324 

In other words, impressive should remain impressive, provided that 1407 holds. If it doesn’t, both economic gravity and 1324 are in play.


I have 13 LONGS and 14 SHORTS in the Hedgeye Portfolio.



Keith R. McCullough
Chief Executive Officer


Impressive: SP500 Levels, Refreshed - SPX

Daily Trading Ranges

20 Proprietary Risk Ranges

Daily Trading Ranges is designed to help you understand where you’re buying and selling within the risk range and help you make better sales at the top end of the range and purchases at the low end.