• It's Coming...

    MARKET EDGES

    Identify global risks and opportunities with essential macro intel using Hedgeye’s Market Edges.

Client Talking Points

UST 2YR

The UST 2YR Yield completely jacked whoever was looking for the rate hike, dropping 20% (crashing) from 0.83% to 0.66%, in a day! This is exactly what happened in OCT of 2011 don’t forget – and as U.S. growth data slowed in Q4 of 2011, yields plummeted.

GOLD

Gold is one of the best assets to be long (and stay long, as opposed to U.S. Equity beta) into the Fed meeting showing +0.6% follow through this morning; as the Fed tries to devalue the Dollar + Rates fall, Gold loves that.

DAX

German stocks do not love Dollar Down, Euro Up (to $1.14 this morning, top-end of its current 1.12-1.14 risk range). Don’t forget our #EuropeSlowing Macro Theme as the DAX drops -1.9% this morning and moves into crash territory (-20% from the April peak).

Asset Allocation

CASH 73% US EQUITIES 0%
INTL EQUITIES 0% COMMODITIES 6%
FIXED INCOME 21% INTL CURRENCIES 0%

Top Long Ideas

Company Ticker Sector Duration
MCD

MCD is one of Sector Head Howard Penney's favorite names. He thinks McDonald's is finally emerging from the doldrums and is doing everything they need to do to fix the company domestically.

 

Penney believes there is not only a huge inflection point coming for the profitability of the company, but also for their sales. He thinks this means Wendy’s, Jack In the Box, Sonic will suffer a bit as MCD begins to take its market share back.

PENN

Bottom Line here? September regional gaming revenue growth should accelerate meaningfully from August and provide a catalyst for the stock. Our bull thesis on PENN appears very much intact.

TLT

In a higher volatility, growth-slowing environment, you want low-beta exposure (stocks that move less than the market) and a larger allocation to long-term Treasuries.

 

In the recent Macro Overlay video series exclusively for Investing Ideas subscribers, Keith rank-orders our top investing ideas positions from a fundamental macro and style factor perspective (low-beta, big cap liquidity, slower growth):

 

  1. Treasuries (TLT)
  2.  “Something that looks like Treasuries” (EDV)
  3. Gold (GLD)
  4. Low-Beta, Big-Cap liquidity: McDonalds
  5. Low-Beta, Big Cap Liquidity: General Mills

Three for the Road

TWEET OF THE DAY

We Made the Call (AGAIN) https://app.hedgeye.com/insights/46405-we-made-the-call-again … via @hedgeye

#Fed #Rates #markets

cc @KeithMcCullough @mablum

@Hedgeye

QUOTE OF THE DAY

Vision is the art of seeing the invisible.

Jonathan Swift

STAT OF THE DAY

86% of the time spent on mobile devices is behind apps.