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Client Talking Points

UST 10YR

2.05% yield into this rate of change slowing U.S. jobs report, so the bond market continues to front-run both Janet Yellen and Wall Street’s overly bullish (pro-cyclical) forecasts. On a bad headline NFP print, expect no support to 1.98%; on a “good” one, we could see upside to 2.19% - that’s our risk range.

GOLD

Is the 3rd time a charm? This is the 3rd time (in 3 months) to buy Gold on a down move (before making a higher-low and ramping for a weekly gain) ahead of the jobs print, and we would. There is immediate-term upside to $1155.

JOBS

Rate of change data/charts don’t lie; political economic pundits do. When the rate of change in the jobs market bottomed at the end of 2012, Hedgeye went bullish on U.S. #GrowthAccelerating (particularly consumption) and, as it slows here from the FEB 2015 top, we’re bearish – cycles take time to play out.

 

**Tune into The Macro Show with Hedgeye CEO Keith McCullough 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

***NEW VIDEO

Newsflash, Captain Stock Picker: Mr. Macro Is In Charge https://app.hedgeye.com/insights/46646-mr-macro-market-is-in-charge-right-now… via @KeithMcCullough #markets #stocks

@Hedgeye

QUOTE OF THE DAY

Never confuse a single defeat with a final defeat.

F. Scott Fitzgerald

STAT OF THE DAY

The highest paid player in the National Women's Hockey League (NWHL) is Kelli Stack of the Connecticut Whale earning $25,000 this season.