CLIENT TALKING POINTS
US GDP
Post a sequentially accelerating nominal Retail Sales report on Friday (June +2.7% y/y), our predictive tracking algo for GDP has ramped to its highest level of 2015 at +2.3% y/y which could mean something as high as +3-4% the way Wall St looks at the headline (q/q SAAR) = 1st time our forecast has been above the Atlanta Fed and consensus.
UST 10TR
The #ProfitCycle recession TREND call is still in play, so it will be interesting to see GDP rising (sequentially, which can happen in any data series, especially if the Deflator is understated and real growth overstated) vs. Earnings Season as they’ll be going different ways; risk range on the 10yr has widened out to 1.31-1.61% and should.
Oil
Stronger than recession in GDP data = stronger Dollar = weaker reflation returns… no follow through to Oil being +1.2% (WTI) last week as it’s still -5% in the last month and trading below @Hedgeye TREND resistance of $47.37/barrel.
TOP LONG IDEAS
TLT
Long Bonds (TLT) = #GrowthSlowing, yield curve compression
GLD
Gold (GLD) = Protection from global currency devaluation and inflation/down USD – You can travel anywhere on earth and get a quote in local currency
TIP
Treasury Inflation-Protected Securities (TIP) = Combination of the above exposures
Asset Allocation
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 7/17/16 | 51% | 0% | 0% | 13% | 30% | 6% |
| 7/18/16 | 50% | 0% | 0% | 13% | 30% | 7% |
Asset Allocation as a % of Max Preferred Exposure
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 7/17/16 | 51% | 0% | 0% | 39% | 91% | 18% |
| 7/18/16 | 50% | 0% | 0% | 39% | 91% | 21% |
THREE FOR THE ROAD
TWEET OF THE DAY
Dogmatic faith in central banking magic is dying a slow death. #Fed #ECB #BoJ #markets #FX @KeithMcCullough pic.twitter.com/EqxE04s6oT
@Hedgeye
QUOTE OF THE DAY
“Freedom lies in being bold.“
-Robert Frost
STAT OF THE DAY
Arod has a career batting average of .295.
