Client Talking Points
After telling the world “volatility in the Chinese stock market is over”, central planners got tagged with a -6.2% drop in the Shanghai Comp overnight – rest of Asia slowing, faster, too – in the last month: Taiwan -9.6%, Singapore -8.8%, Thailand -8.3%
Reflation (and high beta, high leverage, style factors) helped US equities bounce off last Wednesday’s lows, but were right back in the soup this morning with both WTI and Copper making fresh 3-month lows – and the Fed is going to “hike” into this?
With a yield of 2.14% this morning does the round trip and then some – so what the market is telling you is that even if the Fed does hike into a slowdown, probability is rising that growth and inflation slow at a faster pace – I remain bullish on the Long Bond.
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Top Long Ideas
"We are very bullish on McDonald’s," says Restaurants Sector Head Howard Penney. "We like where this company is going. We like the new CEO and the changes they’re making."
Penney notes that there are a lot of things going on inside the company which we can’t see that are extremely meaningful to where this company will be in 12-18 months.
"I’ve said this a dozen times recently, but 2015 will be the last year McDonald’s trades at an average price below $100," he says.
"As we predicted, regional gaming revenues surged in July which gives us confidence in our Q3 EPS estimate of $0.23, which is $0.04 above the Street," writes Hedgeye Gaming, Lodging & Leisure Sector Head Todd Jordan. "We continue to like Penn National Gaming here due to stable regional gaming trends, better than expected quarterly and annual earnings, and the Plainridge and Jamul contribution to PENN’s two-year growth story."
The set-up for the September FOMC meeting is as follows:
Three for the Road
QUOTE OF THE DAY
“I didn’t get over 1300 walks without knowing the strike zone.”
STAT OF THE DAY
With a 719–477–45 record as of the conclusion of the 2014 football season, West Virginia University ranks 14th in victories among NCAA FBS programs, as well as the most victories among those programs that never claimed nor won a National Championship.