Client Talking Points
+60% in less than 2 weeks and front-month has resistance at 19.94 – if we’ve said this 100x this year, we’ve said it 1000x – do not buy equity beta when the VIX is < 12; the inverse of that 19.94 resistance level in the SPX cash = 2027 support – if these levels don’t hold up, we’ll start to recommend prayer.
Globally, have been correcting now for 3-6 months; navel gazing at the S&P 500 proved to be as shortsighted as it was at both the 2000 and 2007 cycle tops; drawdown in the Russell 2000 is now -9.5% and most major global equity markets are down -7-15%, in a month = #oversold.
So China devalues and everything comes unglued, eh? Japan’s Nikkei closed down 3%, the Hang Seng closed down 1.5%, the KOSPI closed down 2%, but, of course, China’s remained the pace horse, dropping another -4.3% overnight to closed down -11.5% on the week. The dour read-throughs for regional and global growth are obvious, but what’s not so obvious is where do we go from here. Specifically, we need to study Japan on the bounce next week to decide whether or not to book the gain on the long side.
|FIXED INCOME||26%||INTL CURRENCIES||4%|
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
TWEET OF THE DAY
VIDEO (1min) Do You Own The Hillary Clinton Portfolio? https://app.hedgeye.com/insights/45929-do-you-own-the-hillary-clinton-portfolio
QUOTE OF THE DAY
Nothing grows well without space and air.
STAT OF THE DAY
The United Arab Emirates has the biggest gender imbalance in the world, with 274 men for every 100 women.