CLIENT TALKING POINTS
Japan
The 28.1 TRILLION in fiscal bazooka approved, and both Yens and JGBs went the wrong way on that (imagine there’s a credit consequence to this nonsense…); JGB 10yr yield now +18bps in a month (to -0.08%); Nikkei resumes #crash mode, -1.5% overnight (-22% from the 2015 Global Equity Bubble High).
Oil
Chart chasing pros in disarray as WTI remains below $40 this morning (that’s a -23% crash since 1st week of June); does it matter? Or shall we spin this back to being “bullish for the consumer” when 85% of Financial Assets are held by the Top 10% - Oil and Energy related assets are a big part of the asset inflation the Fed needed off the March lows.
XLE
Energy Stocks down hard obviously, but do you buy them here? Consensus is already long them is the problem… risk signal levels matter to me and I have XLE TREND = 67.17, XOP TREND = 34.95, OIH TREND = 29.45 (all broken, for now); with Oil Volatility OVX breaking out to 44-45, I’m in no rush to buy these, yet…
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 | |
|---|---|---|---|---|---|---|
| 8/1/16 | 62% | 3% | 5% | 6% | 12% | 12% |
| 8/2/16 | 60% | 3% | 5% | 6% | 13% | 13% |
Asset Allocation as a % of Max Preferred Exposure
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 8/1/16 | 62% | 9% | 15% | 18% | 36% | 36% |
| 8/2/16 | 60% | 9% | 15% | 18% | 39% | 39% |
THREE FOR THE ROAD
TWEET OF THE DAY
CHART OF THE DAY | Oil: Where To From Here? app.hedgeye.com/insights/52806… via @KeithMcCullough #Oil $USD #FX $OVX
@Hedgeye
QUOTE OF THE DAY
"Talent wins games, but teamwork and intelligence wins championships”
-Michael Jordan
STAT OF THE DAY
Carlos Beltran, who was traded to the Texas Rangers yesterday, has hit 414 career homeruns with a .281 batting average over his 19 year career.
