CLIENT TALKING POINTS
China
Having a hard time seeing a “bottom” in any non-made-up time series; after falling another -1.1% last wk, Shanghai Comp loses another -0.9% overnight (taking its crash to -43% since JUN 2015) as the Yuan continues to hit new lows.
Oil
So if China hasn’t bottomed, Oil must be still bottoming, right? Not this morning – down another -1% to $41.20 WTI after a -16% JUL; everything is cool when levering up to pay dividends, until it isn’t … Oil remains bearish TREND @Hedgeye.
UST 10YR
Did what it should have done on the GDP miss (Consumption hit the number our tracker was anchoring on, but they told the #truth on the Deflator! and that subtracted 170bps); assuming 1-1.5% GDP was always the bull case for stocks and bonds (not really, but narratives come and go), consensus is now long both (see CFTC futz/options positioning report).
TOP LONG IDEAS
GLD
To summarize our active ideas, long Gold (GLD) and long U.S. Dollar position (via PowerShares DB US Dollar Index Bullish Fund (UUP), netted out Friday, with gold catching a bid against a USD that got crushed on the report. (Part of the reason we added UUP to Investing Ideas was the expectation of a GDP print that may have sent a hawkish message to the market.) Think of Gold and the USD as a position against a basket of other currencies.
TLT
The good news for #GrowthSlowing bulls is that the Treasury rate curve will likely get pushed lower over the coming days as investors take stock of this week’s ugly data. That's good for Treasury Inflation-Protected Securities (TIP) and Long Bonds (TLT).
UUP
See update on GLD.
Asset Allocation
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 7/31/16 | 66% | 4% | 6% | 6% | 6% | 12% |
| 8/1/16 | 62% | 3% | 5% | 6% | 12% | 12% |
Asset Allocation as a % of Max Preferred Exposure
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 7/31/16 | 66% | 12% | 18% | 18% | 18% | 36% |
| 8/1/16 | 62% | 9% | 15% | 18% | 36% | 36% |
THREE FOR THE ROAD
TWEET OF THE DAY
VIDEO: This Overlooked US Housing Investigation Has Huge Investing Implications app.hedgeye.com/insights/52742
@KeithMcCullough
QUOTE OF THE DAY
”Me shooting 40% at the foul line is just God's way to say nobody's perfect”
-Shaquille O'Neal
STAT OF THE DAY
Brian McCann has 1359 career hits.
