Buy Everything?

Client Talking Points

USD

If you ask Doctor Dollar, Janet Yellen may very well do what we think she should do and stay “data dependent” with no timing on rates – that would = Down Dollar, Down Rates – Up almost Everything (much like our March 18th FOMC meeting call). We think both U.S. equity futures (yesterday), and Oil again today are front-running this scenario.

VIX

The VIX ramped right to the top-end of our range yesterday then backed off – there is no support to 12.75 on a potential buy everything ramp – sentiment is bearish (this morning’s II Bull/Bear Spread is at year-to-date lows and SPX NET SHORT positions (futures/options) are at year-to-date highs).

EUROPE

Sorry, you get #StrongerEuro on this – and the DAX, CAC (both -4% in the last month) no likey Down Dollar because it means up Euro – so we like long U.S. Equities still vs short EuroStoxx with the Slower-For-Longer (down rates) view, for now ….

 

**The Macro Show - CLICK HERE to watch today's edition at 8:30AM ET featuring Macro Analysts Darius Dale and Ben Ryan. 

 

Asset Allocation

CASH 40% US EQUITIES 6%
INTL EQUITIES 12% COMMODITIES 13%
FIXED INCOME 27% INTL CURRENCIES 2%

Top Long Ideas

Company Ticker Sector Duration
PENN

Penn National Gaming will likely tee off on the bears with a strong Q2, upward 2015/2016 EPS revisions, and the start of a 2 year growth period. PENN’s stock has climbed 27% this year on stabilizing regional gaming revenues, transaction-fueled optimism (real estate) surrounding the regional gaming companies and proximity to the opening of the new Plainridge racino on June 24. So what will drive even more upside? More and better. We think regional gaming trends are even better than anticipated by the Street and Q2 earnings should be a solid beat even before Plainridge contributes.

ITB

Housing outperformed in the latest week alongside choppy price action in equities and further, extraordinary volatility in sovereign bond markets.  Fundamental data was light with weekly purchase applications data from the MBA the lone release of import for the industry.  The first, high-frequency update on purchase demand in June, however, was positive. Purchase demand rose +9.7% sequentially, taking the index to its strongest level in 2 years at reading of 214.3. On a year-over-year basis, growth accelerated for a  4th consecutive week to +14.6%. Inclusive of last weeks gain, demand in 2Q is tracking +14.3% QoQ and +13.4% YoY.

TLT

Housing outperformed in the latest week alongside choppy price action in equities and further, extraordinary volatility in sovereign bond markets.  Fundamental data was light with weekly purchase applications data from the MBA the lone release of import for the industry.  The first, high-frequency update on purchase demand in June, however, was positive. Purchase demand rose +9.7% sequentially, taking the index to its strongest level in 2 years at reading of 214.3. On a year-over-year basis, growth accelerated for a  4th consecutive week to +14.6%. Inclusive of last weeks gain, demand in 2Q is tracking +14.3% QoQ and +13.4% YoY.

Three for the Road

TWEET OF THE DAY

ASIA (ex-Shanghai): in the last mth, Hang Seng -6.4%, Singapore -4.8%, KOSPI -3.7%

#GrowthSlowing @HedgeyeDDale

@KeithMcCullough

QUOTE OF THE DAY

I would challenge you to a battle of wits, but I see you are unarmed.

William Shakespeare

STAT OF THE DAY

Retail sales this week according to the ICSC index were up only 1.9%, the lowest rate in 15 weeks.