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Daily Market Data Dump: Wednesday

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, rates and bond spreads, key currency crosses, and commodities. 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 TO ENLARGE

 

Daily Market Data Dump: Wednesday - equity markets 7 20

 

Daily Market Data Dump: Wednesday - sector performance 7 20

 

Daily Market Data Dump: Wednesday - volume 7 20

 

Daily Market Data Dump: Wednesday - rates and spreads 7 20

 

Daily Market Data Dump: Wednesday - currencies 7 20

 

Daily Market Data Dump: Wednesday - commodities 7 20


July 20, 2016

Want more from Daily Trading Ranges? CLICK HERE to submit up to 4 tickers you'd like to see on the list. 

 

  • Bullish Trend
  • Bearish Trend
  • Neutral

INDEX BUY TRADE SELL TRADE PREV. CLOSE
UST10Y
10-Year U.S. Treasury Yield
1.65 1.35 1.56
SPX
S&P 500
2,115 2,188 2,163
RUT
Russell 2000
1,157 1,230 1,200
COMPQ
NASDAQ Composite
4,877 5,099 5,036
NIKK
Nikkei 225 Index
14,931 17,039 16,723
DAX
German DAX Composite
9,501 10,316 9,981
VIX
Volatility Index
11.50 17.04 11.97
USD
U.S. Dollar Index
96.11 97.51 97.11
EURUSD
Euro
1.09 1.12 1.10
USDJPY
Japanese Yen
100.01 107.98 106.08
WTIC
Light Crude Oil Spot Price
43.91 46.65 45.45
NATGAS
Natural Gas Spot Price
2.60 2.92 2.73
GOLD
Gold Spot Price
1,315 1,369 1,332
COPPER
Copper Spot Price
2.10 2.28 2.26
AAPL
Apple Inc.
94.61 100.93 99.87
AMZN
Amazon.com Inc.
721 758 739
NFLX
Netflix Inc.
84.55 94.59 85.84
GOOGL
Alphabet Inc.
701 765 753
JPM
J.P. Morgan Chase & Co.
59.75 65.33 63.86
MSFT
Microsoft Corporation
51.22 55.99 53.09



Hedgeye's Daily Trading Ranges are twenty immediate-term (TRADE) buy and sell levels, along with our intermediate-term (TREND) view.  Click HERE for a video from Hedgeye CEO Keith McCullough on how to use these risk ranges.


CHART OF THE DAY: Fed September Rate Hike Expectations Too Low

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

 

"... Looking at the implied market probability of another hike, across durations:

  1. JUL meeting = 8%
  2. SEP meeting = 21%
  3. DEC meeting = 43%

For now, I think those SEP expectations are too low. If I’m right on that, rates will keep making a series of higher-lows and Fed funds futures will continue higher until we get another jobs report bomb (PS. don’t rule that out)."

 

CHART OF THE DAY: Fed September Rate Hike Expectations Too Low - 07.20.16 image


Hedgeye Statistics

The total percentage of successful long and short trading signals since the inception of Real-Time Alerts in August of 2008.

  • LONG SIGNALS 80.45%
  • SHORT SIGNALS 78.38%

Long Bond Bug

“We must consider how some bugs are not detrimental but fundamental to life.”

-Dr. David Perlmutter

 

I’ve learned more in the last week than I’ve learned all year and it had nothing to do with markets. It had everything to do with my growing gut.

 

“Meet Your Microbiome” is how neurologist (and gut doctor), David Perlmutter introduced me to reality in what has been nothing short of a fantastic book everyone should read called Brain Maker.

 

“The Greek physician and father of modern medicine, Hippocrates, first said in the 3rd century BC that all disease begins in the gut.” Same thing goes for Long Bond Bulls. All corrections begin with this thing called #GrowthAccelerating.

 

Back to the Global Macro Grind

 

Talk about Recency Bias… I’m in my hotel in Chicago this morning… and for breakfast, instead of my usual, I ordered “The Fitness Trainer!” Berry parfait yogurt, eggs, mixed bell peppers, baby spinach, scallions…

 

But my gut isn’t deflating. Weird.

 

With a sequential (i.e. quarter-over-quarter) surprise to the upside in Q2 GDP, the former Perma Bull narrative (“Reflation”) is. With the US Dollar at a 4-month high, Commodities (and Oil) don’t like that inasmuch as Long Bond Bulls shouldn’t.

 

Long Bond Bug - currency wars

 

The way this macro pivot works is pretty straightforward:

 

  1. Q2 US GDP accelerates vs. Q1 as both European and Japanese growth continues to slow
  2. US Dollar becomes the relative winner in the Currency War
  3. Rates rise off their all-time lows
  4. Reflation (Oil down -7% in the last month) deflates
  5. The Fed corroborates USD strength with hawkish commentary that they nailed it all along

 

Again, and I want to be crystal clear on this… so let me write again, again…

 

A sequential acceleration is what we call a TRADE. And TRADES are not TRENDS (3 months or more, multiple quarters). All a Q2 GDP acceleration ensures is a Q3 sequential deceleration back to bearish TREND.

 

If that’s too “short-term” for you, stop reading and start pounding some empty carbs. As the authors of #GrowthSlowing, “all-time-lows in bond yields”, etc., I think my research team and I should have a pretty good handle on how to trade this.

 

Bought a bond, sold a bond…

 

That’s right. If you don’t like “short-term trading”, tell your boss you are risk managing. That’s what I signaled when I told subscribers to “sell-some” Zeroes (ZROZ) in Real-Time Alerts yesterday. We call it risk managing the range.

 

For something like the 10yr US Treasury Yield, here’s what I mean by that:

 

  1. The low-end of the immediate-term TRADE risk range = 1.35%
  2. The top-end of the immediate-term TRADE risk range = 1.65%
  3. Intermediate-term TREND resistance for the 10yr yield = 2.03%

 

In other words, if you want to actively risk manage the range of consensus finally being LONG what’s been our Best Idea on the long side of macro for a year now, you sell bonds on rallies and patiently buy them back on selloffs.

 

Patience has been (and will continue to be) the key to profiting from both cyclical and secular #GrowthSlowing.

 

Another way to “play” the short-term higher-low that my model is signaling in the 10yr Yield is via Fed Fund Futures. Those are the macro market’s expectations of when (and if) the Fed actually has the spine to “raise rates.”

 

Looking at the implied market probability of another hike, across durations:

 

  1. JUL meeting = 8%
  2. SEP meeting = 21%
  3. DEC meeting = 43%

 

For now, I think those SEP expectations are too low. If I’m right on that, rates will keep making a series of higher-lows and Fed funds futures will continue higher until we get another jobs report bomb (PS. don’t rule that out).

 

The other thing that should keep happening on that is a continuation of what I absolutely love in life – the value of my hard earned currency appreciating = #StrongDollar.

 

And all of that “reflation” hope, fully loaded with consensus being long things that have been tethered to a rising Oil price (think ISMs, PMIs, Industrial Stocks) should deflate at a faster pace than my gut seems to be, despite feeling smarter about it.

 

Our immediate-term Global Macro Risk Ranges are now:

 

UST 10yr Yield 1.35-1.65%

SPX 2115-2188

NASDAQ 4

VIX 11.50-17.04
USD 96.11-97.51
EUR/USD 1.09-1.11
Oil (WTI) 43.91-46.65

 

Best of luck out there today,

KM

 

Keith R. McCullough
Chief Executive Officer

 

Long Bond Bug - 07.20.16 image


Technology Equity Research Veteran Ami Joseph Joins Hedgeye

Takeaway: Veteran analyst will provide best ideas on both the long and short side of Technology stocks.

FOR IMMEDIATE RELEASE

 

STAMFORD, Conn., July 20, 2016 -- Hedgeye Risk Management, a leading independent provider of investment research and online financial media firm, announced today that industry veteran Ami Joseph has joined the company as a Managing Director to lead its Technology equity research platform. He joins Hedgeye from Joseph Capital Partners, a Boston-based research boutique that he founded which provided long and short ideas to institutional investors.

 

In his new role at Hedgeye, he will continue to provide his best ideas on both the long and short side of Technology stocks.

 

Technology Equity Research Veteran Ami Joseph Joins Hedgeye - Ami 7.19.16   Output 1 .mov.13 54 44 02.Still001

 

"Our rapidly growing team here is very excited to welcome Ami aboard during this important phase of our firm’s growth," said CEO Keith McCullough. “His insight and experience in the tech sector will be a key component of our strategy and success in this evolving space in the years to come."

 

Joseph comes to Hedgeye with almost two decades of buy-side and sell-side experience covering the technology sector. Before founding and managing Joseph Capital Partners, he was an equity research analyst at Putnam Investments where he led international equity research for technology stocks. Prior to that, he was a technology analyst at Fidelity Management & Research.

 

“Hedgeye is a truly unique research firm heading in a very positive direction,” said Joseph. “I’m thrilled to join such a talented team of analysts. In addition, having the advantage of being part of a growing media platform with greater resources will enable me to serve my clients that much more effectively going forward.”

 

Joseph graduated Magna Cum Laude from the University of Pennsylvania where he was a Benjamin Franklin Scholar and member of the Phi Alpha Theta Honors Society.

 

ABOUT HEDGEYE RISK MANAGEMENT

 

Hedgeye Risk Management is an independent investment research and online financial media firm. Focused exclusively on generating and delivering investment ideas in a proven buy-side process, the firm combines quantitative, bottom-up and macro analysis with an emphasis on timing.

 

The Hedgeye team features some of the world's most regarded research analysts, all with buy-side experience, covering Macro, Financials, Energy, Healthcare, Retail, Gaming, Lodging & Leisure (GLL), Restaurants, Industrials, Consumer Staples, Internet & Media, Housing, Materials, Technology and Washington policy analysis.

 

Contact

Dan Holland

dholland@hedgeye.com

203.562.6500


Discover (DFS) reiterated our late cycle #ConsumerCredit theme last night – to be continued…

Client Talking Points

USD

#StrongDollarmove continues as consensus remains A) bearish on USD (see net positioning in CFTC futures & options data) and B) finally too dovish on what the Fed might do in SEP – what slows this down if we’re right on the Q2 sequential GDP acceleration as European and Japanese economic data continues to slow? Still bearish on Euros.

Oil

Continues to break-down as the USD continues to threaten a breakout – WTI down -1.4% yesterday takes it -7.1% in the last month as the inverse USD correlation there remains as real as it is for the CRB Index (down -1.1% yesterday to 186 and signaling bearish TREND @Hedgeye); WTI immediate-term risk range now = $43.91-46.65.

UST 10YR

We signaled sell some on Zeroes (ZROZ) in Real-Time Alerts yesterday and I’ll keep taking down our asset allocation to Fixed Income (booking gains) on rallies until I see this US Q2 GDP print – consensus is very much long the Long Bond now (after being bearish on it for the last 6-12 months) and I don’t like being levered long consensus after an epic move in rates.

Asset Allocation

CASH US EQUITIES INTL EQUITIES COMMODITIES FIXED INCOME INTL CURRENCIES
7/19/16 50% 0% 0% 13% 30% 7%
7/20/16 53% 0% 2% 13% 24% 8%

Asset Allocation as a % of Max Preferred Exposure

CASH US EQUITIES INTL EQUITIES COMMODITIES FIXED INCOME INTL CURRENCIES
7/19/16 50% 0% 0% 39% 91% 21%
7/20/16 53% 0% 6% 39% 73% 24%
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
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.

TLT

Long Bonds (TLT) = #GrowthSlowing, yield curve compression.

TIP

Treasury Inflation-Protected Securities (TIP) = Combination of the above exposures.

Three for the Road

TWEET OF THE DAY

Cartoon of the Day: Going Nowhere app.hedgeye.com/insights/52463… cc @KeithMcCullough #HelicopterMoney #BOJ pic.twitter.com/fhA3enUU1d

@Hedgeye

QUOTE OF THE DAY

“The greatest enemy of knowledge is not ignorance, it is the illusion of knowledge.”  

–Stephen Hawking           

STAT OF THE DAY

Derek Lowe had a career W/L record of 176-157.


investing ideas

Risk Managed Long Term Investing for Pros

Hedgeye CEO Keith McCullough handpicks the “best of the best” long and short ideas delivered to him by our team of over 30 research analysts across myriad sectors.

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