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INITIAL CLAIMS | STICKING THE LANDING

Takeaway: The labor market finished strong in April. The sum of initial claims came in at the lowest level since 1996 and is almost tied with 2000.

Below is the detailed breakdown of this morning's initial claims data from Joshua Steiner and the Hedgeye Financials team. If you would like to setup a call with Josh or Jonathan or trial their research, please contact 

 

APRIL: STRONG....& LONG:

April finished just as strong as it started. As we have pointed out in the last few weeks and show in the first chart below, in terms of cumulative initial claims April 2015 has been the best April since 1996 with the small exception of 2000 (with which it's almost tied). We now look to the jobs report on Friday to see if claims strength with show up in the overall employment situation.

 

One thing to note about tomorrow's NFP report is that it will have 5 weeks in it vs the normal 4. The BLS corrects for this, but in years when an April with 5 weeks follows years with a 4-week April data problems have tended to ensue. Remember that the establishment survey measures from the weeks of the 12th to the 12th. As such, it's possible that there will be an upward bias to tomorrow's number on the order of ~25% owing to the inclusion of the additional week. We continue to rely on claims as our primary indicator of the Labor market's health.

 

In the second chart below, oil prices have made steady progress upward of late. Given that movement, the spread between the indexed basket of claims in energy-heavy states and the U.S. as a whole tightened week over week from 28.1 to 26.6.

 

INITIAL CLAIMS | STICKING THE LANDING - Claims20

 

INITIAL CLAIMS | STICKING THE LANDING - Claims18

 

The Data

Initial jobless claims rose 3k to 265k from 262k WoW, as the prior week's number was unrevised. Meanwhile, the 4-week rolling average of seasonally-adjusted claims fell -4.25k WoW to 279.5k.

 

The 4-week rolling average of NSA claims, another way of evaluating the data, was -10.8% lower YoY, which is a sequential deterioration versus the previous week's YoY change of -11.6%

 

INITIAL CLAIMS | STICKING THE LANDING - Claims2

 

INITIAL CLAIMS | STICKING THE LANDING - Claims3

 

INITIAL CLAIMS | STICKING THE LANDING - Claims4

 

INITIAL CLAIMS | STICKING THE LANDING - Claims5

 

INITIAL CLAIMS | STICKING THE LANDING - Claims6 normal  1

 

 

Joshua Steiner, CFA

 

Jonathan Casteleyn, CFA, CMT


Keith's Macro Notebook 5/7: Bonds | Euro | Asia

 

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


Keith's Daily Trading Ranges [Unlocked]

This is a complimentary look at Daily Trading Ranges - our proprietary buy and sell levels on major markets, commodities and currencies sent to subscribers weekday mornings by CEO Keith McCullough. It was published this morning at 7:31am ET. Click here to learn more and subscribe. 

Keith's Daily Trading Ranges [Unlocked] - z charts55

BULLISH TRENDS

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BEARISH TRENDS

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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 80.33%
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BABA: IPO Yo-Yo (F4Q15)

Takeaway: Marked improvement off a weak F3Q15. The mobile debate remains in focus; while the setup gets progressively worse starting F2Q16.

KEY POINTS

  1. 1Q15 = MARKED IMPROVEMENT: China Retail revenue growth accelerated off F3Q15, despite a slide in total GMV growth to 40% y/y (vs. 49% in the prior quarter).  Commission revenue growth held steady from the prior quarter off a rebound in Tmall Mix (y/y change); suggesting the company may be making improvement in Tmall uptake on the mobile platform.  Marketing improved off a moderating y/y decline in desktop take-rates.  The biggest surprise from the quarter (for us) was the surge in average spending, which was up 6% y/y on a TTM basis.  We can’t explicitly calculate the quarterly trend off the reported data, so we’re not sure if this is the beginning a of positive inflection, or a mirage from the GMV strength earlier in F2015.
  2. THE MOBILE DEBATE: Can mobile monetization rates catch up to desktop, particularly on the advertising side since?  We believe much of the improvement on mobile take-rates has to do with the migration of consumer traffic (ad click volume) to mobile.  Management suggested as much on the call, but also spoke to improving demand from merchants for mobile advertising.  The latter is encouraging, but we have a hard time believing that mobile will approach desktop rates that are more than double that of mobile.  Traffic has been the predominant driver of growth, and mix is already over 83% of active shoppers (vs. 64% in the prior year).  See note below for detail.
  3. IPO YO-YO: BABA beat top-line estimates by 5% in F2Q15; consensus estimates rose in response.  On the F3Q15 print, BABA missed by -5%, then estimates came down significantly.  BABA just beat F4Q15 revenues by 4% on reduced consensus estimates, and we’re expecting consensus revenue to shoot back up in response.  Note that the prior estimate cut following the F3Q15 release was concentrated into F4Q15 and F1Q16, so if estimates do rise as we expect, the setup will get progressively worse starting in F2Q16.    

BABA: IPO Yo-Yo (F4Q15) - BABA   Tmall GMV   F4Q15

BABA: IPO Yo-Yo (F4Q15) - BABA   Tmall vs. GMV F4Q15

BABA: IPO Yo-Yo (F4Q15) - BABA   Avg GMV 4Q15

BABA: IPO Yo-Yo (F4Q15) - BABA   Mobile Mix F4Q15

BABA: IPO Yo-Yo (F4Q15) - BABA   Marketing vs. Active Buyer 4Q15

 

BABA: The Mobile Debate

03/04/15 10:34 AM EST

[click here]

 

 

Let us know If you have any questions or would like to discuss in more detail.

 

Hesham Shaaban, CFA

@HedgeyeInternet

 


MPEL 1Q 2015 CONFERENCE CALL NOTES

Takeaway: Benefiting from releasing Q1 after most Macau, MPEL doesn't miss. Margins were a positive surprise.

MPEL 1Q 2015 CONFERENCE CALL NOTES - mpel2

 

CONF CALL

  • Macau still weak demand environment
  • Control operating costs
  • Gained RC volume share in 1Q
  • Improved mass share in April
  • Non-gaming entertainment - MPEL the leader
  • Studio City: on budget, on time (targeting Q3 but not a hard target) - management seemed to hedge on this. We think a Q3 opening is not in doubt
  • 79% of mgmt team are locals
  • CoD Manila:  customer database very strong. Hotel occupancy at 75%. Mass market strong.  VIP junkets will open in coming months.
  • Property EBITDA margin (including CoD) 24.3% compared with 28.8% in 1Q 2014, 25.1% in Q4 2014.
  • Property Macau margins: 25.5% , unchanged QoQ
  • Q1 2015 hold-adjusted EBITDA:  benefited from $6m of better luck overall ($12m better hold at CoD offset by $6m lower hold at Altira)
  • CoD building lease 1Q 2015: US$7m 
  • 2Q 2015 guidnace
    • D&A: $110-115m
    • Corp expense: $32m
    • Consolidated interest expense: $40m ($11m relating to CoD Manila, $37m capitalized interest)

Q & A

  • Govt has engaged with MPEL on gaming policy (e.g. smoking ban, tourist visa)
  • CoD Manila:  quite pleased with how it's tracking.  Grand opening on Feb 2. Manila is a market where competitors are much more aggressive with regards to reinvestment rates.  But promotions/giveaways have tapered down recently.  Junket VIP now beginning to ramp up (big operator opening this weekend).
  • Dividend policy: prudent in setting initial dividend policy.  Comfortable maintaining dividend. 
  • Studio City: non-gaming attractions are different from CoD. Believe they will be profitable there as stand-alone.
  • Sees further efficiencies on a EBITDA per table
  • Doing a little bit better than Macau market on VIP contribution
  • On a QoQ basis, saw increase in mid-tier premium mass segment. Comped 100 more rooms in Q1 in mid-tier premium mass segment to boost occupancy.
  • Long-term outlook on Macau hasn't changed
  • Macau Margins:  had identified issue of VIP deterioration spreading to premium mass segment.  In April, had best mass share in last 2 years
  • Premium mass hold rate: quite happy
  • Smoking ban impacted mass gaming floor. Mass Hold % averaged down with lower betting levels (due to changes to in mix of customers).  Should be able to sustain mass hold % (seeing improvement in April)
  • CoD & MSC have own non-recourse agreements. These debt deals make it very difficult to move tables from one property to the other.
  • Has 2 out of the top 5 junket operators. Hopeful to add one more top 5 junket in Philippines. Had soft junket opening in April.
  • CoD Macau: got table allocation 4-6 wks before opening
  • Phillipines: longer-term could be another Vegas or Singapore. 

RTA Live: May 7, 2015

Here is the replay of today's edition of RTA Live.

 

 


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