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Client Talking Points

EURO

Euros Burning to fresh year-to-date lows of $1.10 as Mario Draghi prepares to say something – since he cannot stop economic gravity (and only lift stock markets), it’s interesting to see the Italian recession reported (GDP -0.5% year-over-year) and neither French (10.4%) nor Greek (26.0%) unemployment improve, at all… #NeedMoreCowbell.

CHINA

Evidently equity markets did not like the hopeful guidance of 7% GDP and 3% Inflation – Shanghai Composite down -1% overnight (back to flat year-to-date) and Hang Seng down -1.1% (-2.1% in the last 2 sessions)… 7% and 3% look unlikely, at best.

 

TURKEY

#StrongDollar Deflation is not good for plenty of Emerging Markets – if you’re the market that gets tagged with a crashing currency (Lira) and your stock market doesn’t have a daily central planning message, what to do? Stocks in Istanbul down -2% this morning to -6.1% year-to-date. 

Asset Allocation

CASH 37% US EQUITIES 12%
INTL EQUITIES 11% COMMODITIES 0%
FIXED INCOME 30% INTL CURRENCIES 10%

Top Long Ideas

Company Ticker Sector Duration
ITB

iShares U.S. Home Construction ETF (ITB) is a great way to play our long housing call, U.S. #HousingAccelerating remains 1 of the Top 3 Global Macro Themes in the Hedgeye Institutional Themes deck right now. Not only did U.S. home prices accelerate (in rate of change terms) in the Core Logic data this week to +5.7%, but the supply/demand data has been improving throughout the last 3 months.

PENN

iShares U.S. Home Construction ETF (ITB) is a great way to play our long housing call, U.S. #HousingAccelerating remains 1 of the Top 3 Global Macro Themes in the Hedgeye Institutional Themes deck right now. Not only did U.S. home prices accelerate (in rate of change terms) in the Core Logic data this week to +5.7%, but the supply/demand data has been improving throughout the last 3 months.

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

which means continued slowdown in #Macau gaming volumes $LVS $WYNN $MGM $MPEL

@HedgeyeSnakeye

QUOTE OF THE DAY

We delight in the beauty of the butterfly, but rarely admit the changes it has gone through to achieve that beauty.

-Maya Angelou

STAT OF THE DAY

Greece stocks are down another -1% in Athens this morning, down -11% since FEB 24, Greece posted a putrid 26% unemployment rate report.