prev

Hedgeye Cares Calls on All Golfers and Supporters!

The Hedege Cares team invites you to our 2nd annual Hedgeye Cares Charity Golf Challenge on July 21st at the exclusive GlenArbor Golf Club in Bedford Hills, NY.

 

Watch a recap of last year's event below.


This year’s tournament will again benefit Bridgeport Caribe Youth League (BCYL),

a tremendous organization that focuses on providing underprivileged youth with diverse educational and sports opportunities that foster intellectual, physical and social development.  It’s truly a great organization and dedicated group of kids!

 

Hedgeye Cares Calls on All Golfers and Supporters! - Glen Arbor

 

For a second straight year we’re very excited and proud to have The Lincoln Motor Company as our title sponsor, and we are still in need of more participation to be able to make a meaningful donation. Beyond signing up to play, there are numerous ways to contribute through sponsorship, auction items and donations.  

 

Hedgeye Cares Calls on All Golfers and Supporters! - sponrsorships

 

We appreciate you helping to make a difference in our local community and look forward to seeing you on a beautiful course!  

 

For any inquiries and to RSVP please contact Josefine Allain (

 

Hedgeye Cares Calls on All Golfers and Supporters! - Golf 2014


HEDGEYE INSIGHT | The Slow March to Tautness: May Employment

This note was originally published June 05, 2015 at 10:31 in Macro. Click here for more information on the various products we offer individual investors.

Has a policy maker ever said that “strength” was transitory and “we expect conditions to worsen away from target over the medium term”?  Anyway, the May employment report was strong pretty much across the board.

 

As always - we’re not big on adding to the noise of manic data reporting on employment Friday but below are some quick highlights.  If you have any specific questions or would like to dig/discuss a particular dimension of the labor market in more depth, let us know.

 

  • Payrolls: RoC Solid -  NFP & Private payrolls improved both sequentially (MoM and 3M/6M MA) and in RoC terms.  March/April get net positive revision of +32K
  • Unemployment Rate & LFPR : Off the Lows - Unemployment rate ticked up to 5.5% but the internals were largely positive with labor participation rising for a second month and the chg in employed > chg in unemployed.
  • Wages: Golf Clap - Both Total Private & Nonsupervisory Worker wage growth accelerated sequentially (from sub-middling to more discretely middling).  ECI and NFIB data continue to suggest forward wage inflation but that been true for a while; material BLS reported wage acceleration has remained a panglossian phantasm. 
  • Slack: Paint Still Drying -  The U-6/Underemployment rate held at 10.8%.  From a Trend perspective every slack chart looks basically the same (charts at bottom below): The labor markets painfully slow march towards tautness remains ongoing.  
  • Housing = Mojo Extends to May:  Residential Construction employment growth re-accelerated (suggesting ongoing health in demand trends) while 25-34YOA employment again accelerated to a new cycle high - headship rates/HH formation will benefit on a lag.
  • Energy Sector: Broad Strength > Concentrated Weakness -  The bleed in Energy sector employment continued in April/May but the concentrated weakness continues to get swamped by the broader labor mkt strength.  
  • (Firm) Size Matters:  Small Firm employment (1-499) growth is carrying the load (+2.5% YoY) according to the latest May ADP data.  Large & Extra-Large Firm employment remains in multi-month deceleration mode currently.   
  • Income/PCE: Its Just Math - The net of rising employment + rising wages + flat hours worked should = another solid month of reported aggregate income growth in May.  Whether that income actually gets spent is a different question but rising income + rising savings remains a positive for the aggregate household PnL/BS. Salary and wage income remains of particular import as it has been the primary source of funds for households as credit growth has remained somewhat muted.  We’ll get the April consumer credit figures this afternoon
  • Policy = Don’t Call it a Comeback:  The May data is probably irrelevant for direct policy action in June but it will likely serve as a backboard in the framing of the June meeting statement (i.e. 1Q probably represented transitory weakness and ‘we expect employment/inflation to trend toward target over medium term’) 

A visual tour of the data is below.  Have a great weekend. 

 

HEDGEYE INSIGHT | The Slow March to Tautness: May Employment - z1 CD

 

HEDGEYE INSIGHT | The Slow March to Tautness: May Employment - Housing Demand 25 34 YOA employment

 

HEDGEYE INSIGHT | The Slow March to Tautness: May Employment - Resi Empl

 

HEDGEYE INSIGHT | The Slow March to Tautness: May Employment - Oil   Gas May

 

HEDGEYE INSIGHT | The Slow March to Tautness: May Employment - Oil Industry April

 

HEDGEYE INSIGHT | The Slow March to Tautness: May Employment - Payroll Growth vs Earnings Growth

 

HEDGEYE INSIGHT | The Slow March to Tautness: May Employment - NFP TTM gains

 

HEDGEYE INSIGHT | The Slow March to Tautness: May Employment - Empl diffusion Indices

 

HEDGEYE INSIGHT | The Slow March to Tautness: May Employment - Available Workers per Job

 

HEDGEYE INSIGHT | The Slow March to Tautness: May Employment - ST Unemployed

 

HEDGEYE INSIGHT | The Slow March to Tautness: May Employment - JOLTS Quits

 

HEDGEYE INSIGHT | The Slow March to Tautness: May Employment - Employment By Firm Size

 

HEDGEYE INSIGHT | The Slow March to Tautness: May Employment - NFIB Jobs Hard to Fill

 

Christian B. Drake

cdrake@hedgeye.com

@HedgeyeUSA

 


MACAU WEEKLY ANALYSIS (JUNE 1-7)

CALL TO ACTION

Yes, this past week’s table revenues were awful. But that’s not the reason we like the Macau stocks on the short side. Following last week’s relief rally, which was totally predictable, valuations are full again and the most disconcerting issue – base mass trends are decidedly negative – is not well understood nor projected by the Street. Thus, even if GGR trends hold, the mix is unfavorable and Street estimated margins and EBITDA need to come down considerably for 2015 and especially 2016.

 

As we discussed in our Macau conference call/presentation on Friday, Sands China (LVS) looks most at risk:  it maintains the most exposure to base mass segment – biggest negative delta to current expectations and most targeted segment by upcoming Cotai supply – and LVS’s competitive positioning should outperform in good times and underperform in bad. It’s clear what environment Macau is in now.

 

Please see our detailed note:  

http://docs.hedgeye.com/HE_Macau_6.8.15.pdf


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 80.28%
  • SHORT SIGNALS 78.51%

Rates, Gold and Emerging Markets

Client Talking Points

RATES

We got slammed staying long Treasuries last week as both the Global Yield move (German 10YR Yield doubled in 3 days) and the U.S. jobs report (NFP growth +2.21% year-over-year vs. its cycle peak of 2.34% year-over-year in FEB) and that puts the U.S. 10YR right @Hedgeye TREND resistance of 2.40% - if growth (global and local) wasn’t slowing, we’d reverse the call.

GOLD

No follow through this morning on either the U.S. rates or USD move (up) from Friday – that has Gold up +0.2% off a pretty good zone of $1150-1170 support (which is a higher-low vs. both the NOV and MAR Gold lows).  Fortunately we’re just getting bullish on Gold now and didn’t wear it the whole way (3 years) down. 

EMERGING MARKETS

Emerging everything (ex-China +2.2% Shanghai Composite to +22% in the last month!) didn’t like the #StrongDollar move on Friday either – stocks in Turkey are down -5.7% this morning and after dropping -3.2% last week, India’s BSE Sensex is down another -1% this morning; Emerging Market stocks get more interesting now into the Fed meeting (June 17th).

Asset Allocation

CASH 43% US EQUITIES 5%
INTL EQUITIES 10% COMMODITIES 12%
FIXED INCOME 28% INTL CURRENCIES 2%

Top Long Ideas

Company Ticker Sector Duration
PENN

Penn National Gaming is a true growth story in regional gaming, finally, ripe with catalysts, same store and new unit growth, and accelerating cash flow.  We see stability in regional gaming revenues over the next several months providing some much needed earnings visibility.  PENN maintains the best new unit growth story in domestic gaming with the opening of the Plainridge casino in Massachusetts in June and the Jamul casino in Q2 2016. PENN has a proven track record as the best regional casino operator and recently proved its prowess at successfully opening racinos (casinos at racetracks) with estimate beating Dayton and Mahoning commencing slot operations last year.

ITB

The takeaway on Purchase Activity was mixed as demand declined -3.0% sequentially but accelerated from +13.1% to +13.9% on a year-over-year basis.  More broadly, and inclusive of the latest week, purchase demand in 2Q continues to reflect both sequential and year-over-year improvement with demand growth for the quarter currently tracking +13.6% QoQ and +12.8% YoY. No major callouts in the latest week as the larger trend towards ongoing improvement in purchase activity in 2Q remains intact. CLICK HERE to watch Housing Sector Head Josh Steiner give a brief update on our call on ITB.

TLT

Considering we are already well passed an above average length expansion, and moving into the second half of 2015 growth and inflation comps (i.e. the base effects) become very difficult, growth is likely to continue to slow. We put the likelihood of a rate hike in 2015 as highly unlikely and continue to expect rates to move to make a series of lower-highs through the balance the year (bullish for EDV, TLT, and VNQ. When forward looking growth expectations are downwardly revised and the Fed kicks the can on rate hike expectations, rates and the dollar move lower. Gold has historically performed well in an environment of falling rates and a declining U.S. dollar and we don’t expect anything different this time around. Supporting our view, both gold (GLD) and treasuries (TLT, EDV) remain BULLISH on an intermediate-term TREND duration (3-months or more).   

Three for the Road

TWEET OF THE DAY

NEW | Two-Hitter: Ben Axler Brings One Long Idea & One Short to Hedgeye TV  https://app.hedgeye.com/insights/44526-two-hitter-ben-axler-brings-one-long-idea-one-short-to-hedgeye-tv… via @sprucepointcap + @HedgeyeIndstrls

@Hedgeye

QUOTE OF THE DAY

Destiny is not a matter of chance, but of choice. Not something to wish for, but to attain.

William Jennings Bryan

STAT OF THE DAY

Ralph Lauren in 75 years old, he is the seventh oldest CEO in the S&P and has 81.5% of the voting power at RL.

 

 

The Macro Show - CLICK HERE to watch today's edition at 8:30am ET.


The Macro Show Replay | June 8, 2015

 


CHART OF THE DAY: US Non-Farm Payrolls Are In the #Process of Peaking

Editor's Note: The excerpt and chart below are from today's Morning Newsletter by CEO Keith McCullough. Click here for more information on how to subscribe.

*  *  *  *  *  *  *

CHART OF THE DAY: US Non-Farm Payrolls Are In the #Process of Peaking - z 06.08.15 chart

Click to enlarge

 

...As you can see in today’s Chart of The Day (it’s actually a rock solid table of historical labor cycle data), these are the facts about US labor metrics. I’d like you to zero in on the number of NFP months (+/-) vs. economic cycle peaks:

 

  1. DEC 1969 (economic cycle peak) = +4.9 months (# of months after DEC 69’ when NFP peaked)
  2. NOV 1973 =  +5.9 months
  3. JAN 1980 = +3.9 months
  4. JUL 1981 = +2.0 months
  5. JUL 1990 = +1.0 months
  6. MAR 2001 = +1.0 months
  7. DEC 2007 = +3.0 months

 

...unless it’s “different this time”, US non-farm payrolls are in the #process of peaking. And I’m not a big fan of capitulating at peaks.


investing ideas

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.

next