CLIENT TALKING POINTS
JAPAN
Another horrendous economic data point with Auto Sales -14.2% year-over-year in FEB, so Japanese stocks make another fresh 15 year high on that at +8% year-to-date for the Nikkei moving up +2.3% on the week (S&P 500 was -0.3% last week); Nikkei loves Burning Yens.
EURO
The Euro is oversold to fresh year-to-date lows of $1.11 last week (-7% vs. USD year-to-date) and bouncing small +0.2% this morning on a mixed bag of PMI prints (Italy better, Germany in line, France sucking wind) – Italian stocks +2.3% last week (+0.6% this morning) = +18.2% year-to-date!
OIL
WTI was down -2.1% last week on #StrongDollar +1.1% (back to its JAN highs) and the Oil #deflation continues this morning -1.4% with next immediate-term TRADE support of $47.66/barrel and a risk range of 47.66-53.08 (no $60-70 price deck from us).
TOP LONG IDEAS
EDV
WTI was down -2.1% last week on #StrongDollar +1.1% (back to its JAN highs) and the Oil #deflation continues this morning -1.4% with next immediate-term TRADE support of $47.66/barrel and a risk range of 47.66-53.08 (no $60-70 price deck from us).
TLT
Low-volatility Long Bonds (TLT) have plenty of room to run. Late-Cycle Economic Indicators are still deteriorating on a TRENDING Basis (Manufacturing, CapEX, inflation) while consumption driven numbers have improved. Inflation readings for January are #SLOWING. We saw deceleration in CPI year-over-year at +0.8% vs. +1.3% prior and month-over-month at -0.4% vs. -0.3% prior. Growth is still #SLOWING with Real GDP growth decelerating at -20 basis points to +2.5% year-over-year for Q4 2014.The GDP deflator decelerated -40 basis points to +1.2% year-over-year.
HOLX
Hologic (HOLX), at this stage in their product cycle and in the current stage of the economic cycle, has some very impactful tailwinds emerging to their revenue growth and the implied growth in the future. A stock generally will perform really well when doubt about future growth turns to optimism while the most recent data confirms the optimism. So far, we have a little bit of both; recent positive data like the December 2014 quarter upside and consensus estimates and ratings starting to move off of multi-year lows. A less-worse trend in Pap testing and rising patient volume can combine to get us close to flat for HOX’s Cytology (Pap) business. As the growth in Cytology improves and is less of a drag, the 3D Mammography growth can flow through. We think the outlook is bright, and with a few more data points, we think a lot more investors will agree with us.
Asset Allocation
| CASH | 41% | US EQUITIES | 10% | |
| INTL EQUITIES | 10% | COMMODITIES | 0% | |
| FIXED INCOME | 29% | INTL CURRENCIES | 10% |
THREE FOR THE ROAD
TWEET OF THE DAY
In today's Early Look "Hairy Little Forecasters" I show you the flow-through from Global #Deflation to sector returns
@KeithMcCullough
QUOTE OF THE DAY
We must find time to stop and thank the people who make a difference in our lives.
-John F. Kennedy
STAT OF THE DAY
Consumer Discretionary stocks (XLY) led gainers, +0.7% on the week to +5.3% year-to-date and Energy stocks (XLE) led losers -1.9% on week-over-week at -0.2% year-to-date.