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#GrowthSlowing

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.


The Macro Show Replay | September 18, 2015

 


September 18, 2015

September 18, 2015 - Slide1

 

BULLISH TRENDS

September 18, 2015 - Slide2

September 18, 2015 - Slide3

September 18, 2015 - Slide4

 

BEARISH TRENDS

September 18, 2015 - Slide5

September 18, 2015 - Slide6 

September 18, 2015 - Slide7

September 18, 2015 - Slide8

September 18, 2015 - Slide9

September 18, 2015 - Slide10

September 18, 2015 - Slide11


Daily Trading Ranges

20 Proprietary Risk Ranges

Daily Trading Ranges is designed to help you understand where you’re buying and selling within the risk range and help you make better sales at the top end of the range and purchases at the low end.

We Made the Contrarian "Lower-For-Longer" Call

By now you've almost certainly read or heard the highly-anticipated Fed "news."

 

No rate hike.

 

With a global slowdown (which we called well before our competition and the Fed for that matter) and nervous financial markets staring them in the eyes, our omnipotent central-planners blinked and held its key federal funds rate unchanged. 

 

What you may not have know is that our subscribers were prepared. We have been on record for many months now (please see examples below) calling for precisely what the Fed said today:

 

Lower. For. Longer.

 

We Made the Contrarian "Lower-For-Longer" Call - Growth cartoon 06.03.2015

(Cartoon above originally published on June 3, 2015)

 

On a related note, here's a tweet Hedgeye CEO Keith McCullough wrote around the same time:

 

We Made the Contrarian "Lower-For-Longer" Call - z km 99

 

Fast-forward to earlier this afternoon, McCullough tweeted the following:

 

"Yellen is simply not as good at her forecasting job as Hedgeye is."


Now, some people may interpret that as braggadocio. We respectfully disagree. What's going on right now in the U.S. and around the globe is serious business affecting real people from all walks of life.

 

Our proactive macro team has been all over this non-consensus, "lower-for-longer" Fed rate hike and growth-slowing call. We were contrarian and we were correct.

 

Again.

 

Take a look at the video below from The Macro Show. It's callled "The Fed Is Going To Be Lower (Easier) For Longer" and was released this past spring. It shows what our contrarian macro team led by McCullough has been warning about for some time now.

 

 

We invite you to take a deeper look at our contrarian research. Click here to learn more about how you can begin getting a step or two ahead of the herd and protect your portfolio.

 

There's a better way. We promise.


Cartoon of the Day: No Rate Hike

Cartoon of the Day: No Rate Hike - No rate hike cartoon 09.17.205

 

Earlier this afternoon, Hedgeye CEO Keith McCullough tweeted the following:

 

"Yellen is simply not as good at her forecasting job as Hedgeye is." 

 

Some may interpret that as braggadocio. We respectfully beg to differ. What's going on right now around the globe is serious business affecting real people from all walks of life. Our proactive macro team has been absolutely all over this non-consensus, "lower-for-longer" Fed and growth-slowing call. We were correct.

 

Again. 

 

We invite you to take a deeper look at our contrarian research. Click here to learn more about how you can begin getting a step or two ahead of the herd and protect your portfolio. 


We’re Short Wayfair | $W

Following the recent release of our well-received Home Furnishings “Black Book,” our Retail team led by Sector Head Brian McGough decided to produce a stand-alone “Black Book” on Wayfair (W) which we presented on Monday.

 

We’re Short Wayfair | $W - z w7

 

McGough’s team did so given the increasing controversy surrounding the name. The focus of the deck was primarily upon the following key areas:

  • market size by category
  • revenue capacity and trajectory
  • customer acquisition costs, profitability and churn
  • appropriate expectations for gross margins
  • operational infrastructure and capital needed to break even,

 

The most important component of the deck is the sizable difference between how Wayfair is currently being viewed by Retail analysts vs. Internet analysts.

 

To be clear: our view is that Wayfair’s financial model does not work. The company will likely print negative earnings for the foreseeable future.

 

(*Please email our institutional sales team if you would like access to our Wayfair Black Book. You can reach them at sales@hedgeye.com)


Hedgeye Statistics

The total percentage of successful long and short trading signals since the inception of Real-Time Alerts in August of 2008.

  • LONG SIGNALS 80.64%
  • SHORT SIGNALS 78.61%
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