Hedgeye's Morning Macro Call with CEO Keith McCullough

On today's Morning Macro Call, Hedgeye CEO Keith McCullough shares his Top Three Things, welcomes Financials Sector Head Josh Steiner via phone to discuss the current housing setup, and takes questions from viewers. 






Takeaway: MBS was lucky, which resulted in share gains but VIP volumes remain the key risk.


LVS and Genting struck different chords when describing the Singapore market performance and outlook.  Luck was definitely on the side of LVS’s MBS in Q4, but overall, Genting’s assessment is probably more accurate.


While Singapore generated GGR growth in 4Q 2014, it was mainly due to easy YoY comps and a high hold percentage (good luck for the house).  On a hold-adjusted basis, Singapore 4Q GGR declined for a 5th straight quarter.


Mass volume growth is stable at best.  But most disconcerting is the accelerating decline in VIP volumes, indicative of systemic risks in the market, particularly those stemming from the high-end Mainland Chinese. 


Please see our detailed note:

XLU: Removing Utilities from Investing Ideas

Takeaway: We are removing Utilities from Investing Ideas.

Interest rates are falling today post dovish Fed comments, so we’re selling Utilities (XLU) today on the bounce. We think there are better opportunities (like Penn Gaming) to be buying on weakness. 

XLU: Removing Utilities from Investing Ideas - 356

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PENN: Adding Penn Gaming to Investing Ideas

Takeaway: We are adding Penn Gaming to Investing Ideas.

NoteThe excerpt below was written earlier today by Hedgeye CEO Keith McCullough. Stay tuned for further updates from our Gaming, Lodging & Leisure sector head Todd Jordan.


PENN: Adding Penn Gaming to Investing Ideas - rrr


Janet Yellen's testimony today was, on the margin, dovish. I think this keeps the lower-rates-for-longer Macro Theme in play and also augments our bullish Q1 (Quad1) view of US domestic consumption. 


One of the best ways to play that Macro Theme is via regional gaming stocks (where both gas prices and accelerating housing trends are bullish for their core consumer).


As I pointed out in a previous note, Todd Jordan has already added Penn Gaming to our Institutional Research Best Ideas list. So that's not new today - the stock testing the low-end of its risk range on no volume is...


To review Jordan's bull case, while he's not ready to call a V-shaped regional gaming recovery, due to a variety of factors the numbers are looking a lot better. PENN had a solid Q4. January was one of the best months in regional gaming since well before the “Great Recession” began in 2008. 


Buy Best Ideas (on red) when testing the low-end of the risk range.


Macro Minute: The 3 Things You Need to Know From Yellen’s Testimony Today


Hedgeye CEO Keith McCullough distills the three things that really matter from Fed Chair Janet Yellen’s testimony before Congress today. 

Cartoon of the Day: Moby Deflation

Cartoon of the Day: Moby Deflation - Deflation cartoon 02.24.2015

The deflation data? It's only going to worsen throughout the first half of 2015.

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