CLIENT TALKING POINTS

USD

It wasn’t fun missing the Oil move (off 3yr lows) in Q2, but we're sure happy we’re not long it now (long Gold instead); USD continues to signal bullish TREND after a hawkish Fed yesterday (they’ve pivoted from dovish to hawkish 5x in 6 months, which is embarrassing) and ahead of a hot GDP report tomorrow (we’re at +4.8% q/q SAAR – that’s +2.3% y/y).

Europe

When Janet proclaimed global risks have abated yesterday, we guess that’s Ex-Spain and Ex-Italy – both stock markets down another -1.5-1.7% this morning and both remain in crash mode, -28% and -31% from their 2015 Global Equity #Bubble highs, respectively; we maintain our bearish Macro Theme of #EuropeImploding.

UST 10YR

Worldwide long-term yields lower in the last 48 hours and with the UST 10yr at 1.50%, we'd be a seller of long-term bonds into this GDP report (hoping to buy the 10yr back again around 1.65-1.70%); plenty of people will get sucked into this GDP print if it’s as big as we think it’s going to look (for Q3 we’re straight back down to 0.8%).

TOP LONG IDEAS

GLD

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

TLT

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

TIP

TIP

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

Asset Allocation

CASH US EQUITIES INTL EQUITIES COMMODITIES FIXED INCOME INTL CURRENCIES
7/27/16 64% 2% 4% 12% 10% 8%
7/28/16 66% 2% 6% 8% 8% 10%

Asset Allocation as a % of Max Preferred Exposure

CASH US EQUITIES INTL EQUITIES COMMODITIES FIXED INCOME INTL CURRENCIES
7/27/16 64% 6% 12% 36% 30% 24%
7/28/16 66% 6% 18% 24% 24% 30%
The maximum preferred exposure for cash is 100%. The maximum preferred exposure for each of the other assets classes is 33%.

THREE FOR THE ROAD

TWEET OF THE DAY

The Fed Is More Short Term Now Than a CT Prop Trader Pounding 6 Starbucks Per Day app.hedgeye.com/insights/52666… @federalreserve

@KeithMcCullough

QUOTE OF THE DAY

“Life is short. Smile while you still have teeth.”

-Mallory Hopkin                           

STAT OF THE DAY

in 2004, Barry Bonds was walked 232 times, 120 were intentional.