prev

Keith's Macro Notebook 3/3 : USD | Oil | UST 10YR

 

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


MACAU: HEDGEYE MONTHLY UPDATE CONF CALL

MACAU: HEDGEYE MONTHLY UPDATE CONF CALL 

 

 

The Hedgeye Gaming, Lodging, and Leisure team will host a conference call tomorrow (Wednesday) at 1PM to discuss the latest Macau data and our overall thoughts on the market and the stocks.  Relevant tickers include:  LVS, WYNN, MGM, MPEL, 0027.HK, 1128.HK, 1928.HK, 2282.HK, 6883.HK, and 0880.HK.


Discussion Points:

  • The company and market details behind February’s 49% GGR decline
  • The true Mass/VIP split is masked by smoking ban related reclassifications of tables – we’ll get you the right numbers
  • Optically, March should look better than February but…
  • Revised 2015 monthly market projections
  • Hedgeye company EBITDA estimates vs the Street (LVS, WYNN, MGM, MPEL, and Galaxy Entertainment)
  • What if Analysis: Junket volumes go to zero

 

Please contact  for dial-in information.


TODAY AT 11AM: CRUISE CONF CALL - FEBRUARY

The Hedgeye Gaming, Lodging, and Leisure team will host a conference call today at 11AM to discuss the latest findings from our proprietary cruise pricing database.

 

 

 

 

Points of discussion include:

  • One market experienced a surge in close-in pricing in February while another discounted summer pricing
  • New ship premiums - 1st look at Norwegian Escape premiums
  • Did the Norwegian brand continue to outperform its contemporary peers in the Caribbean and Europe?
  • Are Costa and Anthem holding their ground in Europe?
  • (NEW*) RCL pricing vs load in Asia
  • (NEW*) Same-ship pricing across different markets (e.g. Europe vs Caribbean)

Please contact  for dial-in information.


the macro show

what smart investors watch to win

Hosted by Hedgeye CEO Keith McCullough at 9:00am ET, this special online broadcast offers smart investors and traders of all stripes the sharpest insights and clearest market analysis available on Wall Street.

MACAU FEBRUARY DETAIL

Takeaway: February GGR down 49%. Trends still worsening - 2015 EBITDA set to disappoint.

CALL TO ACTION

GGR fell 49% - slightly better than expected as of last week but well below expectations prior to the start of the month.  We remain negative on the near and intermediate Macau outlook. Sequential trends continue to worsen and unless volumes pick up sequentially, March could fall 35-40%, despite a relatively easy comparison. For the full year, we are projecting GGR to decline 24% YoY which would disappoint investors and drive company earnings and EBITDA estimates much lower than current Street estimates.  

 

Please see our detailed note:  

http://docs.hedgeye.com/HE_Macau_3.3.15.pdf


Consumer Tax Cut #Deflation Persists

Client Talking Points

USD

Higher-highs for the U.S. Dollar Index yesterday drove the CRB Index down another -0.9% (-3.4% year-to-date) and Energy stocks continued to lag as U.S. equity sector styles focused on consumption continue to crush (XLY +6.6% year-to-date vs. SPX +2.8%).

OIL

Oil is whipping around as Oil Volatility remains wicked high (OVX = 54 after topping at 64), but Dollar Down days (today after signaling overbought yesterday) give Oil these bounce bids, up +1.3% this morning to $50.23 with a risk range of $48.04-52.23.

UST 10YR

The UST 10YR experienced another rate ramp yesterday (Bunds and JGBs up 10% too, in yield % terms!) to 2.08% this morning – the risk range has widened to 1.84-2.16% ahead of Friday’s jobs report, so this can get more volatile, faster, now. 

Asset Allocation

CASH 43% US EQUITIES 10%
INTL EQUITIES 10% COMMODITIES 0%
FIXED INCOME 29% INTL CURRENCIES 8%

Top Long Ideas

Company Ticker Sector Duration
YUM

Our bullish thesis on Yum! Brands is slowly becoming more mainstream, as activist talk has recently heated up. Management implemented a shareholder friendly amendment to the company’s by-laws that will permit a shareholder, or group of shareholders, with 3% or more ownership of common stock (for three years or more), to nominate directors representing up to 20% of the board. This is good news for several reasons: 1) an activist may be involved in the name 2) shareholders are speaking up 3) management is feeling the pressure and 4) management is open to adopting more shareholder friendly policies. We continue to believe there is significant upside here despite the stock’s strong recent outperformance.  This stock is one major announcement away from hitting $95.

PENN

Penn National Gaming is the best way to play improving domestic regional gaming trends due to its superior operational management and unit growth opportunities. Catalysts include positive estimate revisions, the opening of the first Massachusetts casino in June, and industry leading earnings growth in 2015 and 2016.

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.

 

Three for the Road

TWEET OF THE DAY

2015: Germany +14.8%, Italy +17.7%, EuroStoxx50 +14.8% YTD

@KeithMcCullough

QUOTE OF THE DAY

There is a fine line between fishing and just standing on the shore like an idiot.

-Steven Wright

STAT OF THE DAY

Copper is down -1.6% this morning, down -6.4% year-to-date. Copper remains one of the most obvious ways to play our top theme, Global #Deflation.


Is Keith McCullough Right About News Bias at Bloomberg?

It was was originally supposed to be a humorous, little Friday morning poke at billionaire Mike Bloomberg's news organization...

Is Keith McCullough Right About News Bias at Bloomberg? - 45

 

But the polarizing results of this recent Hedgeye/Polstir poll (see below) are startling to say the least. The clear takeaway suggests that a large swath of people don't have a whole lot of confidence in Bloomberg's reporting of U.S. economic news and events.

 

When asked the question, "Do you think Mike Bloomberg's company tells the truth about the U.S. economy?" an unbelievable 75% of respondents voted NO. While the poll sample is obviously small, it certainly raises eyebrows about the perceived veracity of Bloomberg's version of economic events.

 

One is left wondering what it all means... Would the numbers hold up and be in the same ballpark if there was a broader sample survey?

 

Here's the poll:


Hedgeye Statistics

The total percentage of successful long and short trading signals since the inception of Real-Time Alerts in August of 2008.

  • LONG SIGNALS 80.65%
  • SHORT SIGNALS 78.63%
next