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Timestamping David Tepper

We are big believers in accountability and transparency here at Hedgeye. And, like any truly successful athlete, team, company or organization, we have our fair share of loathers out there. But one thing is for certain ... no one can accuse us of not being transparent or accountable.

 

In that vein, we'd like to take a minute to highlight two big market calls recently made by Appaloosa hedge fund manager David Tepper.

 

As the first graphic below shows, exactly one month ago today Tepper was bulled up on stocks calling for 8-10% upside in 2015. He told CNBC's Melissa Lee the following:

 

"It's not the time to be careful now. Enjoy the ride."

 

The S&P 500 is down approximately -4% since. 

 

Timestamping David Tepper - appa3

 

As the second graphic below shows, Tepper's call on bonds back in September to Bloomberg's Stephanie Ruhle, well, it was  #epically wrong.  

 

“It’s the beginning of the end of the bond market rally,” Tepper said in a telephone interview. “We are done.”

 

Hedgeye CEO Keith McCullough and his macro team took a lot of heat during that time (we were non-consensus and long the long bond via TLT in 2014).

 

For the record, TLT is up over +17% since Tepper declared the end of the bond rally as 10-year Treasury yields flirt with record lows at 1.77%

 

Yes, we remain long the long bond.

 

Timestamping David Tepper - boom1


Cartoon of the Day: Alibubble

Cartoon of the Day: Alibubble - Alibaba cartoon 01.29.2015

 

Very few research firms have been cautious or negative on the BABA, but at Hedgeye, we’ve been on the other side of consensus.


GLD: Adding Gold to Investing Ideas

Takeaway: We are adding Gold to Investing Ideas.

Please note that we are adding Gold (GLD) to Investing Ideas today.

 

Our macro team will outline our bullish thesis in this weekend's edition. 

GLD: Adding Gold to Investing Ideas - Gold cartoon 07.23.2014


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McCullough: Don’t Buy Most Expensive Bubble We’ve Seen Since Beginning of Mankind | $BABA

 

In today's edition of RTA Live, Hedgeye CEO Keith McCullough did not mince words when asked about Alibaba.

RTA Live is available exclusively to Real-Time Alerts subscribers.


January 29, 2015

 

In today's edition of RTA Live, Hedgeye CEO Keith McCullough ran through the Real-Time Alerts positions as of 10:30AM ET and answers subscriber questions on $RH, $BABA, and more.


INITIAL CLAIMS | BACK TO Y2K, UNLESS YOU LIVE IN AN ENERGY STATE

Takeaway: The last time jobless claims were this low it was the year 2000. $45 oil, however, continues to take its toll on energy states.



Below is the detailed breakdown of this morning's initial claims data from Joshua Steiner and the Hedgeye Financials team. If you would like to setup a call with Josh or Jonathan or trial their research, please contact 

 

Claims Match Y2K Lows, While Energy State Labor Weakness Persists 

Total initial claims showed an impressive decline in the latest week, falling -80k Y/Y to 265k (SA) and putting in their lowest reading since 2000.  NSA claims, meanwhile, were lower by -22% Y/Y on a single week basis. There don't appear to be any special factors in the report.  

 

It's worth noting that while Y2K started out decently from an equity market performance standpoint, the S&P 500 was down 10% by the end of that year and went on to lose another 13% in 2001 and 23% in 2002.

 

For the last several weeks we've been calling out the performance of the eight energy states (AK, LA, NM, ND, OK, TX, WV, WY) to gauge whether labor conditions there are diverging from the country as a whole. In the latest week it appears the spread between the country and the basket of energy states remained steady at around 15 points. For reference, we've indexed the two series back to May of last year and we're interested in the spread between the two indices. The two charts below illustrate this dynamic.

 

INITIAL CLAIMS | BACK TO Y2K, UNLESS YOU LIVE IN AN ENERGY STATE - Claims18

 

INITIAL CLAIMS | BACK TO Y2K, UNLESS YOU LIVE IN AN ENERGY STATE - Claims20

 

The Data

Prior to revision, initial jobless claims fell -42k to 265k from 307k WoW, as the prior week's number was revised up by 1k to 308k.

 

The headline (unrevised) number shows claims were lower by -43k WoW.

Meanwhile, the 4-week rolling average of seasonally-adjusted claims fell -8.25k WoW to 298.5k.

 

The 4-week rolling average of NSA claims, another way of evaluating the data, was -9.2% lower YoY, which is a sequential improvement versus the previous week's YoY change of -8.0%

 

INITIAL CLAIMS | BACK TO Y2K, UNLESS YOU LIVE IN AN ENERGY STATE - Claims2 without trend line

 

INITIAL CLAIMS | BACK TO Y2K, UNLESS YOU LIVE IN AN ENERGY STATE - Claims3

 

 

Joshua Steiner, CFA

 

Jonathan Casteleyn, CFA, CMT



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