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The Best of This Week From Hedgeye

Here's a quick look at some of the top videos, cartoons, market insights and more from Hedgeye this past week.

HEDGEYE TV

McCullough: This Is The Uber-Bull Case For Gold

In this excerpt from Wednesday's Morning Macro Call, Hedgeye CEO Keith McCullough responds to a viewer's question about recent moves in gold and outlines what he believes could make the "uber-bull" setup for gold moving forward.

 

Hedgeye's Morning Macro Call Replay: Is JPM Set Up Worse Now Than 2011? 

On a special extended edition of the Morning Macro Call (from Wednesday), Hedgeye CEO Keith McCullough gives his global macro rundown, welcomes in Financials Sector Head Josh Steiner to talk JP Morgan after they missed earnings, and announces Hedgeye's Market Marathon, an all-day live streaming event that will air on January 27. 

 

To sign up for the Market Marathon, visit live.hedgeye.com/market-marathon

 

McCullough to Underperformers: Stop Whining

In the Q&A portion of Tuesday’s Morning Macro Call, Hedgeye CEO (and Mite Hockey Coach) Keith McCullough discusses the drastic performance divergences in early 2015 and offers his insight for investors who are under-performing early in 2015. Keith also reveals where he has received the most pushback on the 1Q15 Macro Themes and why the bond market is refuting those concerns.

 

McCullough: Why I'm in No Hurry to Buy Energy Stocks | RTA Live

In this excerpt from Monday’s Real-Time Alerts Live show, Hedgeye CEO Keith McCullough responds to a question about one stock in the energy sector.

 

Subscribe to Real-Time Alerts for access to the full show, plus all of Keith's signals, #timestamped and sent right to your inbox -http://www.hedgeye.com/pages/individuals#real-time-alerts

 

CARTOON

RETAIL SALES DECLINE

The Best of This Week From Hedgeye - retail decline 1.14.15

Retail sales suffered their largest decline in nearly a year, down 0.9% in December.

 

PASS THE DRAMAMINE

The Best of This Week From Hedgeye - sectors 1.13.15

As the new year begins, it's a fair wind for some sectors and a perfect storm for others.

CHART

CENTRAL PLANNING, SWISS STYLE!

The Best of This Week From Hedgeye - swiss

Editor's note: This is a brief excerpt from Thursday's Morning Newsletter by Hedgeye CEOKeith McCullough.

 

*  *  *  *  *  *  *

While I probably don’t deserve a Ph.D. (or a perma bull II vote) for this, I’ve always said that un-elected central market planners would perpetuate the next crisis. That’s #on this morning – follow the interconnected risk:

 

  1. SWISS – there’s CTRL+Print, then there’s panic – and this is rightly A) freaking people out and B) equating to a massive margin call on levered FX trades – Swiss cut by 50bps (to neg -0.75%!) and cut the wire loose on their exchange rate? (Richemont -11.2%, Swatch -8.5%, UBS -7.2%, Adecco -7.9%, Credit Suiss -8.2%, Julius Baer -7.5%, ABB -7.4%) #nice

 

WHAT IF JOBLESS CLAIMS (ENERGY STATES) BREAK OUT TO THE UPSIDE?

The Best of This Week From Hedgeye - wti

 

POLL OF THE DAY

WILL OIL PRICES DROP BELOW $30 AT ANY POINT THIS YEAR?


We wanted to know what you thought.

 

 


Cartoon of the Day: Mo "Mo-Mo", Mo Problems...

Cartoon of the Day: Mo "Mo-Mo", Mo Problems... - Momentum cartoon 01.16.2015

It ain't easy being a mo-bro these days. As Hedgeye CEO Keith McCullough recently wrote, "Don't be a momentum-chasing long only monkey." One moment you and the mo-mo monkeys are on top of the world, the next moment you're all sitting alone on a dirty sidewalk, talking to a dog.


Hedgeye’s McCullough: The Great Central Planning Experiment Is Destined To Fail

Hedgeye CEO Keith McCullough appeared on Opening Bell with Maria Bartiromo this morning to talk volatility, central planning, and deflation. With bond yields plummeting and global tensions rising, Keith thinks that the U.S. jobs market and Europe are now vulnerable as well.

 

 

 


investing ideas

Risk Managed Long Term Investing for Pros

Hedgeye CEO Keith McCullough handpicks the “best of the best” long and short ideas delivered to him by our team of over 30 research analysts across myriad sectors.

Keith's Macro Notebook 1/16: UST 10YR | Financials | Kospi

 

 

 

Hedgeye CEO Keith McCullough shares the top three things in his macro notebook this morning.


Retail Callouts (1/16): NKE, AdiBok, KATE, DG, TIF

Takeaway: Port disruption/potential strike can only hasten NKE's plan to diversify manufacturing base. KATE Saturday partnership with NB.

COMPANY HIGHLIGHTS

 

Footwear industry warns of ‘catastrophe’ if U.S. West Coast ports shut down

(http://www.joc.com/port-news/footwear-industry-warns-%E2%80%98catastrophe%E2%80%99-if-us-west-coast-ports-shut-down_20150115.html)

 

Takeaway: The title of this article borders on ridiculous, as it would be a catastrophe for a few dozen industries (not just footwear), as well as the balance of US/Asia trade if the West Coast Ports shut down. But that's exactly why they will not shut down.

 

That said, continued interruptions are probable, which we're not sure is a bad thing in the footwear space. Keep in mind that Nike is on the verge of rolling out broader footwear production for FlyKnit product (non-labor intensive) in the US, and closer to the point of sale in other developed markets.  We can only think that problems with product delivery at the ports can only hasten Nike's plan to diversify its manufacturing base.  

 

Retail Callouts (1/16): NKE, AdiBok, KATE, DG, TIF - 1 16 chart1

 

KATE - Kate Spade Saturday/New Balance Partnership

 

Takeaway: This is Saturday's 2nd partnership of 2015. The first with West Elm debuted earlier this month and the 2nd (pictures below) with New Balance just went live. These partnership have zero downside for KATE. West Elm is carrying the load on the home wares side and the New Balance collection is featured in just 10 stores nationwide with an e-comm presence. They can't damage what does not exist in the event that this initiative goes South. 

 

Retail Callouts (1/16): NKE, AdiBok, KATE, DG, TIF - 1 16 KSS

 

OTHER NEWS

 

DG - Dollar General Provides Update on FTC Review of Its Proposed Acquisition of Family Dollar

(https://investor.shareholder.com/dollar/releasedetail.cfm?ReleaseID=891443)

 

TIF - Tiffany’s Slumping Shares May Rekindle Takeover Talk: Real M&A

(http://www.bloomberg.com/news/2015-01-16/tiffany-s-slumping-shares-may-rekindle-takeover-talk-real-m-a.html)

 

RSH - RadioShack Prepares Bankruptcy Filing

(http://www.wsj.com/articles/radioshack-prepares-bankruptcy-filing-1421279360?autologin=y)

 

Verizon: Retailers fail to maintain PCI compliance

(http://www.chainstoreage.com/article/verizon-retailers-fail-maintain-pci-compliance)

 

WTSL - Wet Seal Files for Chapter 11 Bankruptcy Protection

(http://ir.wetsealinc.com/releasedetail.cfm?ReleaseID=891670)


What Is The Trade?

Client Talking Points

UST 10YR

Coming into the week there was a -250,163 net SHORT position in the 10YR Treasury CFTC futures/options contracts (consensus had the wrong answer to the question); now we’re tapping the 1.70% target zone we’ve had for a year; that’s already -47 basis points (21%) year-to-date, -132 basis points(-43%) year=over-year – global #GrowthSlowing + #Deflation.

FINANCIALS

Obviously if you have a bearish rates view, you’re short/underweight the Financials (XLE, KRE, JPM), and liking it – with Gold up, this is very reminiscent of 2011 (fully loaded with European headlines), but this time the employment cycle can turn bearish too; U.S. jobless claims breaking out  – Janet Yellen gets easier on that.

KOSPI

As consensus stares at Europe, while obviously slowing, Asian demand read-throughs don’t cease to exist – KOSPI continues to signal bearish, -1.4% overnight and re-testing 12 month lows; even if you think the U.S. economy is going to “de-couple” from this, macro markets wont.

Asset Allocation

CASH 54% US EQUITIES 4%
INTL EQUITIES 2% COMMODITIES 0%
FIXED INCOME 31% INTL CURRENCIES 9%

Top Long Ideas

Company Ticker Sector Duration
EDV

The Vanguard Extended Duration Treasury (EDV) is an extended duration ETF (20-30yr). As our declining rates thesis proved out and picked up steam over the course of the year, we see this trend continuing into Q1.  Short of a Fed rate hike, there’s no force out there with the oomph to reverse this trend, particularly with global growth decelerating and disinflationary trends pushing capital flows into the one remaining unbreakable piggy bank, which is the U.S. Treasury debt market.

TLT

As growth and inflation expectations continue to slow, stay with low-volatility Long Bonds (TLT). We believe the TLT has plenty of room to run. We strongly believe the dynamics in the currency market are likely contribute to a “reflexive deflationary spiral” whereby continued global macro asset price deflation and reported disinflation both contribute to rising investor demand for long-term Treasuries, at the margins.

HOLX

Hologic (HOLX) is a name our Healthcare Sector Head Tom Tobin has been closing monitoring for awhile. In what Tom calls his 3D TOMO Tracker Update (Institutional Research product) of U.S. facilities currently offering 3D Tomosynthesis, month-to-date December placements signaled a break-out quarter after a sharp acceleration in October and slight correction to a still very high rate in November. We believe we are seeing a sustained acceleration in placements that will likely drive upside to Breast Health throughout FY2015. Tom’s estimates are materially ahead of the Street, but importantly this upward trend in Breast Health should lead not only to earnings upside, but also multiple expansion and a significant move in the stock price.

Three for the Road

TWEET OF THE DAY

The biggest risk from the Financials sector is LEVERAGE - all time highs in NYSE margin debt @HedgeyeFIG https://twitter.com/hedgeyeJC/status/556049087725072384/photo/1

@HedgeyeJC

QUOTE OF THE DAY

I have seen that in any great undertaking it is not enough for a man to depend simply upon himself.

-Lone Man Teton Sioux

 

STAT OF THE DAY

Mars robot Beagle2 has been found 11 years after launch, it was one of the cheapest ever missions costing $76 million.


Early Look

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