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Daily Market Data Dump: Friday

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

 

***Click here to watch our post-Brexit analysis from renowned European economist and market strategist Daniel Lacalle and Hedgeye CEO Keith McCullough in this morning's The Macro Show.

 

CLICK TO ENLARGE

 

Daily Market Data Dump: Friday - equity markets 6 24

 

Daily Market Data Dump: Friday - sector performance 6 24

 

Daily Market Data Dump: Friday - volume 6 24

 

Daily Market Data Dump: Friday - rates and spreads 6 24

 

Daily Market Data Dump: Friday - currencies 6 24

 


Risk happens slowly, then all at once…

Client Talking Points

Pound

Not since Black Wednesday (1992) has the UK seen a FX move like this – down -7% vs. USD and one of our favorite ways to be positioned for what the central planners have to try next (devalue more?) remains long Gold +4.5% on the session to $1310 =+24% YTD.

Stocks

Since the crash in European stocks was already in motion, this is really just an extension of what risk managers should have been proactively preparing for – reiterating the 0% asset allocation to Japanese, European, and Emerging market Equities with stock markets like Spain and Italy down 11%, on the day.

Bonds

Reiterating our all-time lows in the UST 10yr Yield call as the causal factor behind most of this is #GrowthSlowing – not new because The People rose up against the Establishment and/or being centrally planned by Eurocrats; 1.52% on the 10yr now with an immediate-term risk range of 1.49-1.72%.

Asset Allocation

CASH US EQUITIES INTL EQUITIES COMMODITIES FIXED INCOME INTL CURRENCIES
6/23/16 61% 3% 0% 12% 21% 3%
6/24/16 57% 0% 0% 13% 25% 5%

Asset Allocation as a % of Max Preferred Exposure

CASH US EQUITIES INTL EQUITIES COMMODITIES FIXED INCOME INTL CURRENCIES
6/23/16 61% 9% 0% 36% 64% 9%
6/24/16 57% 0% 0% 39% 76% 15%
The maximum preferred exposure for cash is 100%. The maximum preferred exposure for each of the other assets classes is 33%.

Top Long Ideas

Company Ticker Sector Duration
TLT

No matter what side of the reflation/deflation trade you’re on, the growth in global demand continues to decelerate on a trending basis. The debate is no longer whether or not growth is slowing. The real debate centers on the policy response and the market reaction to that policy response. While that question presents us with “open the envelope” risk, #GrowthSlowing will continue to be the bull catalyst for U.S. Treasuries whatever the policy response as the slow march to zero yields globally goes on. 

GLD

To sum things up, stay away from the guessing game and stick to what is empirically evident. A stronger USD over the longer term is a probable scenario in our book. We expect the Fed, and all central banks for that matter, will try to combat deflation. That said, global currencies all burning at the same time makes a compelling case for GLD, as gold knows no currency. You can sell it in local currency all over the world. Scary but true.

MCD

There have been rumblings in the news that McDonald's (MCD) 2Q comps have slowed due to the temporary replacement of the 2 for $5 value platform for Monopoly. This has clearly been reflected in the stock as of late, as MCD has underperformed the S&P 500 over the last month.

Despite this near term headwind, we still strongly believe in the long-term story for MCD and remain confident that once they get their value platform right nationally, they will be just fine. In the short to intermediate term, as we wait for a solidified value platform, this recent underperformance represents a great buying opportunity. We remain LONG MCD.

Three for the Road

TWEET OF THE DAY

People are starting to realize that a collapsing currency is a bad thing #Pound Example = progress

@KeithMcCullough

QUOTE OF THE DAY

“Common sense is not so common.” 

-Voltaire      

STAT OF THE DAY

Giancarlo Stanton of the Miami Marlins has the furthest homerun YTD, it went 490 feet.


[UNLOCKED] Early Look: A Courageous Vote

Editor's Note: Below is a complimentary Early Look written by Hedgeye CEO Keith McCullough this morning. Click here to learn more.

 

“Your heart is free – have the courage to follow it.”

-William Wallace

 

For many, today will not be easy. For many others, it will be one of their best. This is the path. This is life. Everyone doesn’t always get a sticker. There are winners and losers. This is democracy.

 

[UNLOCKED] Early Look: A Courageous Vote - Brexit cartoon 06.16.2016

Click here to watch our post-Brexit analysis from renowned European economist and market strategist Daniel Lacalle and Hedgeye CEO Keith McCullough in this morning's The Macro Show.

 

I realize that there were crazy people on both sides of this vote. There always are. People are crazy. But The People do have a right to vote against both the establishment of a highly-paid-political-life and being centrally planned from an office they didn’t elect.

 

What will the ECB and lord Draghi do next?

 

Will they opt for another currency devaluation? Or will they realize now that a debased currency undermines the legitimacy of the government trying to manipulate it? Will they “cut rates” from negative to negative-and-beyond? What happens to the banks?

 

I don’t know.

 

But do they? That remains The Question I have about the entire #BeliefSystem of central market-planning. That’s the question I have been asking myself ever since markets started pricing in that the probability of this not ending well was rising.

 

No, this is not a day for a victory lap.

 

Not for me. This isn’t my win. This is theirs. And don’t kid yourself – there are a lot of “they” out there who have been pounded by the confiscation of their purchasing power. That’s what’s in the value of a currency. And governments should never compromise its trust.

 

Do we have you positioned properly for this?

 

  1. Long The Long Bond (TLT)
  2. Long Gold (GLD)
  3. Short SP500 (SPY)

 

Yes. But, again, this is not a day to party. This is a serious day where serious leaders need to step up and have a real conversation about what it is that The People just voted for.

 

If Americans don’t have this public conversation, is our stock market next?

 

Today’s market news might be that:

 

  1. Japan’s stock market closed down -8%
  2. Germany’s opened down -7%
  3. Spain and Italy’s are trading down -11% (on the day)

 

But the real story has been one that’s been priced in sometimes slowly – and now all at once.

 

This is partly a story of central market-planners having the arrogance to promise the world that they can bend and smooth economic gravity and that “there is no alternative to buying stocks.”

 

In 17 years, I’ve worked and lived through two major US stock market crashes. Today, I’m proud to say I worked and lived through another crash in European stock markets not having to make excuses to my clients on why “no one could see this one coming.”

 

Macro markets did see this coming.

 

I know you are not the consensus. You wouldn’t be reading this if you were. If you had the courage to follow your own research and risk management process, I sincerely hope that you and all that you’ve worked for in your life has a good day.

 

It’ll be a great day for democracy and what’s left of our free-market liberties.

 

[UNLOCKED] Early Look: A Courageous Vote - asset alloc 6 24

 

Our immediate-term Global Macro Risk Ranges are now:

 

UST 10yr Yield 1.49-1.72%

SPX 2039-2113

Nikkei 14802-15918

DAX 9199-10306

VIX 16.40-30.99 
USD 93.08-95.80 
EUR/USD 1.10-1.13 
Oil (WTI) 44.79-50.72

Gold 1260-1328

 

Best of luck out there today,

KM

 

Keith R. McCullough
Chief Executive Officer

 

[UNLOCKED] Early Look: A Courageous Vote - tlt


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JT TAYLOR: Capital Brief

JT TAYLOR:  Capital Brief - JT   Potomac banner 2

“Any fool can know. The point is to understand.”

                        ― Albert Einstein

 

DONALD DRIVING DOLLARS: After getting skewered for his miniscule campaign account, Donald Trump quickly raised $3 million from online donations - and of course – “matching” it with $2 million of his own cash. Trump 2.0 is planning on using these funds to jumpstart his nascent ground game as his camp is clearly at a disadvantage in comparison to Hillary Clinton’s. He’s also promised to step up fundraising activities on behalf of the Republican party at the same announcing that he’s forgiving $50 mm in personal loans to his campaign (for the second time). So far, we’re 48 hours into the latest Trump pivot, and he’s largely avoided the spotlight while decamping across the pond to promote one of his “money-making” golf ventures in Scotland. In the wake of the historic Brexit vote overnight, Trump drew parallels to the anger that persists in the U.S., but is treading carefully in Scotland where over two-thirds of the populace supported the Remain campaign.

 

CLINTON NOT YET CENTERED: Clinton plans to derail the Trump train using the same agenda she used to beat back Bernie Sanders. Her back-to-back speeches have drawn attention for how little new ground they broke, considering that many candidates use the general election to pivot to the ideological center to draw votes from the middle. Clinton gave no indication she would back off the relatively liberal agenda she embraced when Sanders was nipping at her heels, instead highlighting her party’s political high ground on the key questions of taxes, jobs, and the economy. This humdrum approach is unlikely to win over Sanders’ supporters who view her agenda as lackluster and uninspiring - though she professes she’s a progressive leader that likes to get things done. We’ll see if that rounds them up.

 

GUN CLUB: House Democrats ended their sit-in on the chamber floor after an almost 26-hour protest resulting from inaction on gun control measures. As members head back to their districts for the July 4th recess, expect Democrats to work on drumming up support for gun legislation. Dramatic tactics like the sit-in are rare, but may have served its purpose in prodding the Senate to vote on two related measures – one being pushed by endangered Senator Ron Johnson (R-WI), highlighting the importance this issue carries. Though the gun measure may never see light of day in this Congress, it does add another issue to the top of the laundry list for the general election.

 

VEXING THE VIRUS: Congress approved a spending bill that includes a controversial $1.1 billion plan to fight the Zika virus in an early morning vote amidst Democrat protests. The 239-171 vote came during the 15th hour of the dramatic sit-in by Democrats over gun control legislation. The bill, which includes the same level of funding as the Senate’s package, falls short of $1.9 billion the Obama Administration requested. Senate Democrats strongly oppose the bill, while President Obama has threatened to veto it, further muddying the waters in the heat of mosquito season.

 

FIDUCIARY RULE UPDATE:  House Republicans failed to gather the two-thirds majority needed to block the Obama Administration’s controversial fiduciary rule, with the House voting 239-180 – more than 40 votes short of the total needed. While the Congressional effort to overturn the rule now has fallen short, the Obama Administration still must fend off lawsuits filed by the U.S. Chamber of Commerce and several other business groups that could drag on for years.

 

SCOTUS SLAMS OBAMA: In a 4-4 split decision, SCOTUS let an appeals court ruling stand that confirms President Obama overstepped his authority when he acted to shield as many as 4 million unauthorized immigrants from deportation. The court’s ruling is a major blow to Obama who looked to claim the issue as a significant part of his legacy - and, yes, piling on another emotional issue to the election list.

 

NOTE:  We’re out on Monday, returning on Tuesday.  Have a great weekend.

 


CHART OF THE DAY: Were You Positioned Properly For Brexit?

Editor's Note: Below is a brief excerpt and chart from today's Early Look written by Hedgeye CEO Keith McCullough. 

 

***Click here to watch our post-Brexit analysis from renowned European economist and market strategist Daniel Lacalle and Hedgeye CEO Keith McCullough in this morning's The Macro Show.

 

"... Do we have you positioned properly for this?

 

  1. Long The Long Bond (TLT)
  2. Long Gold (GLD)
  3. Short SP500 (SPY)

 

Yes. But, again, this is not a day to party. This is a serious day where serious leaders need to step up and have a real conversation about what it is that The People just voted for."

 

CHART OF THE DAY: Were You Positioned Properly For Brexit? - tlt


A Courageous Vote

“Your heart is free – have the courage to follow it.”

-William Wallace

 

For many, today will not be easy. For many others, it will be one of their best. This is the path. This is life. Everyone doesn’t always get a sticker. There are winners and losers. This is democracy.

 

A Courageous Vote - Brexit cartoon 06.16.2016

Click here for post-Brexit analysis from renowned European economist and market strategist Daniel Lacalle and Hedgeye CEO Keith McCullough in this morning's The Macro Show, live at 9am ET.

 

Back to the Global Macro Grind

 

I realize that there were crazy people on both sides of this vote. There always are. People are crazy. But The People do have a right to vote against both the establishment of a highly-paid-political-life and being centrally planned from an office they didn’t elect.

 

What will the ECB and lord Draghi do next?

 

Will they opt for another currency devaluation? Or will they realize now that a debased currency undermines the legitimacy of the government trying to manipulate it? Will they “cut rates” from negative to negative-and-beyond? What happens to the banks?

 

I don’t know.

 

But do they? That remains The Question I have about the entire #BeliefSystem of central market-planning. That’s the question I have been asking myself ever since markets started pricing in that the probability of this not ending well was rising.

 

No, this is not a day for a victory lap.

 

Not for me. This isn’t my win. This is theirs. And don’t kid yourself – there are a lot of “they” out there who have been pounded by the confiscation of their purchasing power. That’s what’s in the value of a currency. And governments should never compromise its trust.

 

Do we have you positioned properly for this?

 

  1. Long The Long Bond (TLT)
  2. Long Gold (GLD)
  3. Short SP500 (SPY)

 

Yes. But, again, this is not a day to party. This is a serious day where serious leaders need to step up and have a real conversation about what it is that The People just voted for.

 

If Americans don’t have this public conversation, is our stock market next?

 

Today’s market news might be that:

 

  1. Japan’s stock market closed down -8%
  2. Germany’s opened down -7%
  3. Spain and Italy’s are trading down -11% (on the day)

 

But the real story has been one that’s been priced in sometimes slowly – and now all at once.

 

This is partly a story of central market-planners having the arrogance to promise the world that they can bend and smooth economic gravity and that “there is no alternative to buying stocks.”

 

In 17 years, I’ve worked and lived through two major US stock market crashes. Today, I’m proud to say I worked and lived through another crash in European stock markets not having to make excuses to my clients on why “no one could see this one coming.”

 

Macro markets did see this coming.

 

I know you are not the consensus. You wouldn’t be reading this if you were. If you had the courage to follow your own research and risk management process, I sincerely hope that you and all that you’ve worked for in your life has a good day.

 

It’ll be a great day for democracy and what’s left of our free-market liberties.

 

Our immediate-term Global Macro Risk Ranges are now:

 

UST 10yr Yield 1.49-1.72%

SPX 2039-2113

Nikkei 148

DAX 9199-10306

VIX 16.40-30.99
USD 93.08-95.80
EUR/USD 1.10-1.13
Oil (WTI) 44.79-50.72

Gold 1

 

Best of luck out there today,

KM

 

Keith R. McCullough
Chief Executive Officer

 

A Courageous Vote - 06.24.16 chart


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