Takeaway: April claims data suggests the labor market remains very healthy for now. Looking back 20 years, only one year (Y2K) saw a stronger April.
This is an excerpt of a research note originally published earlier this morning. Click here for more information on how you can subscribe to our services.
INITIAL CLAIMS | ROCK STEADY
Claims rose only slightly week over week to 295k from 294k and the 4-week rolling average, now at 284.5k, has held strong within a tight range of 282.8k to 284.5k for four weeks.
Looking at the current data in the context of history (as we show in the first chart below) the sum of seasonally adjusted claims in the first three weeks of April are below those seen in every year since 1996 with the sole exception of 2000.
The energy states basket decoupled further from the broader US in the week ending April 11th, even with the price of oil bouncing a bit. The spread between the energy and non-energy baskets widened to 31.9 from 27.0 in the most recent week. We show this in the second chart below.
Editor's Note: This is an excerpt from Hedgeye research this morning. If you're curious and considering becoming a subscriber (a very good idea), please feel free to take a look around and see how we can help you by clicking here.
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So, a very loud and vocal chorus of Bond Bears was out in force yesterday (see Bill Gross on German Bunds… and in the U.S., those saying the Housing data was “too good”, so that meant the Fed would hike, etc, etc).
All that chirping accomplished was tap the top-end of our 1.84-1.99% immediate-term risk range for 10YR UST (which we are still long via TLT).
Our advice? Buy red, sell green. In other words, buy more bonds at the top-end of the yield range.
Rinse and repeat.
Risk Managed Long Term Investing for Pros
Hedgeye CEO Keith McCullough handpicks the “best of the best” long and short ideas delivered to him by our team of over 30 research analysts across myriad sectors.
Takeaway: We reiterate our bullish bias on Japanese equities amid a powerful trifecta of supportive factors.
Below watch a video update of our intermediate-to-long term thesis on the Japanese economy and its financial markets.
CLICK HERE to download the associated presentation in PDF format (11 slides).
As always, feel free to ping us with questions.
Best of luck out there,
Hedgeye's Macro Analyst Darius Dale shares the the top three things in CEO Keith McCullough's macro notebook this morning.
Takeaway: Removing SKX from our short bench.
EVENTS TO WATCH
SKX - Removing From Short Bench
Takeaway: We’re removing SKX from our Short Bench. We added the name to the Bench on Monday after we flagged it as a negative on our SIGMA screen this past week. As a reminder, this analysis triangulates the P&L and balance sheet to hone in on which companies are likely to beat on the Gross Margin line, and of course...which companies are going to miss. We were looking for 1) the SIGMA trajectory coming out of 1Q15 and 2) the quality of the print. Both of which looked good enough for us to pull this name off our radar screen on the short side for now.
EBAY - Ebay lays out post-split vision for marketplace and PayPal
TJX - TJX chairman Cammarata to retire, CEO Meyrowitz will succeed him
ZQK - Quiksilver Investor Renews Calls for Retailer to Pursue Sale
SPLS - Staples Acquires Makr to Make More Design Services Happen
ABG Acquires Jones New York And Taps Mark Weber, Former CEO LVMH, Inc., As Strategic Advisor
Bill Langsdorf Named to Lead Former Wet Seal
Kering - Puma Appoints General Manager for EMEA
M - Macy's gets intimate with Heidi Klum
Ikea changes the rules on high-tech furnishings
Metro interested in some Target Canada stores
Sears Hometown and Outlet CEO to leave Aug. 1
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