Client Talking Points
Keeping this Greek Gong Show together is net bearish for the Euro (booting them and/or any other dysfunctional government is bullish) – that remains our long-term call – as #EuropeSlowing continues 2H 2015, they’ll have to print, bail, print.
Follow #Deflation’s correlation risk: Down Euro (-0.7% to $1.10 vs. USD) equals #StrongDollar equals Down Oil (-1.5% with no support for WTI to $49.42) equals Down Gold (-0.6% this am, and breaking back down to bearish TREND @Hedgeye).
Yields, up, pretty much across the board on this (including the periphery – Spain +7 basis points) but the US 10YR is just trading in a tightening risk range; at the low-end of the 10YR range = 2.20%, sell bonds; at the high end of the range = 2.47%, you buy bonds – same with equities; we would fade momentum moves, don’t chase.
**The Macro Show - CLICK HERE to watch a replay of today's edition and learn under what scenario Hedgeye CEO Keith McCullough believes the stock market could crash.
|FIXED INCOME||28%||INTL CURRENCIES||8%|
Top Long Ideas
Hedgeye’s Retail Team held a "Flash Call" on Kate Spade recently to address the concerns we’ve been fielding about the brand and company from institutional investors in light of the selloff since the company reported earnings in early May. Here were our conclusions from the call:
Gaming, Lodging and Leisure Sector Head Todd Jordan reiterates his team's bullish high-conviction thesis on Penn National Gaming. The company remains one of our favorite names on the long side and boasts the best new unit growth story in domestic gaming. Jordan further notes that with more states releasing their June gaming revenues this past week, we feel more confident in our higher than consensus Revenue, EBITDA, and EPS estimates.
Long-term Treasury rates remain the best proxy for forward-looking growth expectations.
We outline three components of secular stagnation below to explain the SAVINGS/INVESTMENT GLUT that is at the heart of the academic argument for current policy measures:
Three for the Road
TWEET OF THE DAY
CHINA: +2.4% for the non-halted 1/2 of Chinese stocks, Shanghai Comp still -23.2% mth-over-mth
QUOTE OF THE DAY
Skill and confidence are an unconquered army.
STAT OF THE DAY
The American Pet Products Association estimates $60.59 billion will be spent on pets in 2015, up about 25% from five years ago.