A sign of the times.
Takeaway: Trump Hitting Hard, Clinton Hits the Casinos, Cali Knows How To Party
Editor's Note: Below is a brief excerpt from Hedgeye Potomac Chief Political Strategist JT Taylor's Capital Brief sent to institutional clients each morning. For more information on how you can access our institutional research please email email@example.com.
Time to play hard ball. We knew it was coming, we just didn’t know when. Donald Trump doesn’t care about the issue or the context - he’s going ugly, early. Although the presidential primaries are cooling, they’re still not over as neither candidate is their party’s official nominee yet and they’re already crossing the line – to the extent that one even existed this cycle.
Trump seems to keep the surprises coming and one of his allies summed it up perfectly: “What Trump is going to do only Trump knows. Trump is not scripted, he’s not programmed and he’s not handled, but he can read, and he does know the Clintons.”
A storm is brewing.
“How does anybody lose money running a casino?”
Well, people do lose money at casinos, but that’s not what she was referring to as Hillary Clinton follows suit by going after Trump’s past and this time, we’re talking business. Clinton poked fun at the presumptive Republican nominee for his four businesses’ bankruptcies, including his famously failed Atlantic City casinos. Additionally, Clinton shined a light on Trump Mortgages, their role in the housing recession, and Trump’s nerve in rooting for the economy to fail.
Californians are registering to vote faster than ever before. More than twice as many voters have registered this year than in the same four-month period in 2012. The growing voter groups identify themselves as Hispanics and Millennials. Both are left-of-center groups, with one favoring Sanders and the other favoring Clinton.
CA is too blue for Republicans to be competitive in the fall, but look for a more engaged electorate to impact the Democratic race there in less than two weeks.
Takeaway: "When you call yourself a luxury brand, but your reputation on the Street starts to converge with Kohl’s, you know there’s a problem."
Shares of luxury retailer Tiffany (TIF) lost some of their luster today as the company slashed its outlook and reported that results had deteriorated on virtually every line of their P&L. Shares are down 1.6% today.
To be clear, Retail analyst Brian McGough has been ahead of the crowd. Since TIF was added to the short side of Investing Ideas, the stock is down -22% while the S&P 500 is up 5.2%.
Ahead of TIF's results today, here's what our Retail team wrote in a weekend update to Investing Ideas subscribers:
"Tiffany (TIF) reports 1Q earnings on Wednesday, May 25th. Looking at recent data points, it seems that this event is more likely to be negative than positive.
An update following the results...
Retail analysts Brian McGough and Alexander Richards minced no words this morning in a note to institutional subscribers:
"When you call yourself a luxury brand, but your reputation on the Street starts to converge with Kohl’s, you know there’s a problem... What we are sure of, however, is that this stock is still a short barring a massive correction today that erases a third of TIF’s market cap."
Relied upon by big institutional and individual investors across the world, this granular morning newsletter distills the latest and most vital market developments and insures that you are always in the know.
During the live Q&A section of The Macro Show earlier today, Hedgeye CEO Keith McCullough provides a “stick with the process” pep talk for a subscriber worried about his short positions.
Takeaway: Despite the Fed's talk of rate hikes, we remain the bulls on Long Bonds (TLT).
"Unfortunately, the bond market isn’t buying into the hope that GDP is +2.5% here in Q2 (we’re still below 1%) – at 1.86% this am the 10yr Yield is signaling at 1.68% is still very much in play ahead of next week’s #EmploymentSlowing report," Hedgeye CEO Keith McCullough wrote in a note sent to subscribers earlier today.
Take a look at the 10-year Treasury since the Fed's December "rate hike."
The flattening of the 10s/2s yield spread to a year-to-date low is another explicitly bearish U.S. growth signal.
That's why we remain THE BULLS on Long Bonds (TLT).
Takeaway: A closer look at global macro market developments.
Editor's Note: Below are complimentary charts highlighting global equity market developments, S&P 500 sector performance, volume on U.S. stock exchanges, and rates and bond spreads. It's on the house. For more information on how Hedgeye can help you better understand the markets and economy (and stay ahead of consensus) check out our array of investing products.
Start receiving Hedgeye's Cartoon of the Day, an exclusive and humourous take on the market and the economy, delivered every morning to your inbox
By joining our email marketing list you agree to receive marketing emails from Hedgeye. You may unsubscribe at any time by clicking the unsubscribe link in one of the emails.