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).
TOP LONG IDEAS
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):
- Treasuries (TLT)
- “Something that looks like Treasuries” (EDV)
- Gold (GLD)
- Low-Beta, Big-Cap liquidity: McDonalds
- Low-Beta, Big Cap Liquidity: General Mills
Asset Allocation
| CASH | 73% | US EQUITIES | 0% | |
| INTL EQUITIES | 0% | COMMODITIES | 6% | |
| FIXED INCOME | 21% | INTL CURRENCIES | 0% |
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.
