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RTA Live: September 30, 2015

 


Retail Callouts (9/30): New RL CEO is a Win

Takeaway: We think this CEO change is a huge win for RL shareholders | Academy Sports announces new CEO, could be gearing up for IPO.

RL - Fountain of Youth

We think this CEO change is a huge win for RL shareholders. It’s important, we think, for the age of the executive team at most consumer brands to be as closely aligned with its core customer as possible. For too long, that’s been going the wrong way at RL. But RL just made the biggest adjustment in that regard that we’ve seen at any company – perhaps ever.

To See Our Full Note From Yesterday CLICK HERE

To See Our June Vetting Book On RL CLICK HERE


Retail Callouts (9/30): New RL CEO is a Win   - RL chart 2

 

Academy - Academy Sports has named Kevin Symancyk (43) as President and CEO. Symancyk comes from Meijer, the Midwest hypermarket chain, where he was President and COO. Prior to Meijer he worked in merchandising for Sam's Club.  Could be gearing up for IPO.

(http://www.chainstoreage.com/article/academy-sports-makes-ceo-change)

 

Neiman - Neiman Marcus is reportedly delaying IPO until 2016 due to volatility in the market.

(http://wwd.com/business-news/financial/neiman-marcus-ipo-ares-10245974/)

 

AMZN - Amazon launching a program called Flex, to compete with UBER, where consumers can deliver Prime Now packages. Drivers must provide their own car, have an android smartphone, and pass a background check. Pay range is expected at $18-$25 per/hr.

(http://www.chainstoreage.com/article/amazon-takes-cue-uber-will-pay-consumers-deliver-packages)

 

HBC - Hudson's Bay Restructuring North American Operations. Cutting 265 positions, and expecting $75mm in savings in 2016.

(http://investor.hbc.com/releasedetail.cfm?ReleaseID=934300)

 

COST - 4Q15 Earnings

Retail Callouts (9/30): New RL CEO is a Win   - 9 30 15 chart2

 

GPS, EBAY - Former Gap Inc. CEO Paul Pressler joins EBay Board of Directors.

(http://wwd.com/business-news/human-resources/paul-pressler-ebay-board-10246583/)

 

ARO - Aéropostale is on notice from NYSE due to its stock price's 30 day average below $1.  The company is considering a reverse split to meet the listing requirement.

(http://wwd.com/business-news/financial/aeropostale-stock-notice-10246526/)

 


The Macro Show Replay | September 30, 2015

 


Attention Students...

Get The Macro Show and the Early Look now for only $29.95/month – a savings of 57% – with the Hedgeye Student Discount! In addition to those daily macro insights, you'll receive exclusive content tailor-made to augment what you learn in the classroom. Must be a current college or university student to qualify.

September 30, 2015

September 30, 2015 - Slide1

 

BULLISH TRENDS

September 30, 2015 - Slide2

September 30, 2015 - Slide3

September 30, 2015 - Slide4

BEARISH TRENDS

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September 30, 2015 - Slide6 

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Worst Q3 for Stocks Since 2011

Client Talking Points

DAX

The DAX bounced, “off the lows” … into month end down -24% since April; nothing new there – bear market bounce within more slowing data post yesterday’s 0.0% German CPI; Eurozone CPI moves into the #deflation zone at -0.1% year-over-year in SEP which should prompt ECB President Marion Draghi’s QE Cowbell.


COPPER

Copper bounced, off the crashing lows… +2.5% as we’re sure people are starting to concern themselves with another “reflation” as the Fed contemplates more slowing economic data (= USD down, hoped-for-reflation up).

UST 10YR

After tapping 2.05% into the close yesterday, it was a great month (and quarter) for the best way to play #Deflation & #GrowthSlowing (Long-Duration Bonds). Since 2.04% is the low-end of our current 2.04-2.15% range, it should be no surprise to see a yield bounce “off the lows” this morning.

 

**Tune into The Macro Show with Hedgeye CEO Keith McCullough and Macro analyst Darius Dale at 9:00AM ET - CLICK HERE

Asset Allocation

CASH 70% US EQUITIES 0%
INTL EQUITIES 0% COMMODITIES 8%
FIXED INCOME 22% INTL CURRENCIES 0%

Top Long Ideas

Company Ticker Sector Duration
MCD

McDonald’s clearly continues to be well-liked by our Restaurants research team and is a near perfect fit into our macro team’s current "style factor" preferences. This stock is high cap with a low-beta, coupled with a company turnaround story that is currently well underway. We believe this stock will do well through this tumultuous time in the market.

 

As previously mentioned, the company has all day breakfast starting on October 6. We anticipate this development as not only driving increased visits from existing customers, but also new customers that maybe don’t wake up early enough to get breakfast by 10:30am (or simply just people that enjoy eating breakfast items outside of the morning!)

PENN

As Sector Head Todd Jordan notes, "PENN should benefit from the release of state gaming figures over the next few weeks. Recall that August was weaker than many thought. While we predicted this particular slowdown, our model is showing a sharp September rebound.

 

September revenues should rebound and serve as a catalyst for the stock going into Q3 earnings. On the research side we have not altered our views of PENN’s long term growth story. We continue to see more upside from current price levels.  

TLT

Is the U.S. economy still showing signs of a cyclical slowdown? Yes.  If you, like us, remain skeptical on the said policy path from our omnipotent central planners, and you believe growth continues to slow, then we respectfully submit that you sit on your GLD and TLT allocations.

 

3 GDP comps are difficult. And, once the data comes out, we think expectations will be downwardly revised again. In other words, wait for yet another Fed punt on a 2015 hike.

Three for the Road

TWEET OF THE DAY

VIDEO (2mins) Carl Icahn Can’t Be Serious https://app.hedgeye.com/insights/46597-mccullough-carl-icahn-can-t-be-serious

@KeithMcCullough

QUOTE OF THE DAY

Formula for success:  rise early, work hard, strike oil.

J. Paul Getty

STAT OF THE DAY

Mobile ads account for about 76% of Facebook’s ad revenue.


CHART OF THE DAY: #Draghi’s Flawed #Deflation Is Dead Belief

Editor's Note: This is a chart and brief excerpt from this morning's Early Look written by Hedgeye CEO Keith McCullough. Click here if you'd like to beat consensus and subscribe to the firm who made the best call on Wall Street in Q3.

 

CHART OF THE DAY: #Draghi’s Flawed #Deflation Is Dead Belief - 09.30.15 Chart

 

...Well, for those of you who didn’t take the advice to “not pay so much attention to the data” in Q3, let’s kick off the advent of Q4 with the most recently reported European economic data:

 

  1. Eurozone CPI (inflation reading) deflated to -0.1% y/y in SEP vs. +0.1% AUG
  2. Germany’s CPI slowed to 0.0% in SEP vs. +0.2% AUG
  3. Producer Price (PPI) #Deflation was -0.9% y/y in France, -2.9% y/y in Italy, and -9.9% y/y in Greece

 

Yep. It’s a good thing Greece and the rest of Europe is fixed. Maybe their stock markets moving into #crash mode (German DAX -23% since April) will supersede Draghi’s flawed belief that #Deflation risks were dead (in June).

 


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.

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