CLIENT TALKING POINTS

Pound

Bank of England’s turn this morning with GBP/USD signaling immediate-term TRADE overbought at $1.34 (within its bearish intermediate-term TREND); downside to $1.30 depending on how dovish Carney can get – it’s sad to watch, but he’s probably going to devalue the purchasing power of the British People and perpetuate a UK recession.

Oil

Did the 1-day bear market bounce thing and shows no follow through this morning; immediate-term risk range = $38.74-41.90 and I’d say it has a good chance of testing the low-end of that range on a “good” jobs report; from a monetary asset price inflation perspective, Oil needs bad US economic data (dovish Fed), don’t forget.

UST 10YR

Ahead of the jobs report the 10yr Yield is sitting right in the middle of its risk range (1.45-1.62%) so we'd do nothing on that and/or yield chasing securities – bad jobs print gets you 1.45%; “good” gets you 1.62% and I’m not in the business of guessing the number – no one we know has process driven edge on nailing NFP consistently.

TOP LONG IDEAS

GLD

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

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

UUP

See update on GLD.

Asset Allocation

CASH US EQUITIES INTL EQUITIES COMMODITIES FIXED INCOME INTL CURRENCIES
8/3/16 57% 5% 6% 6% 13% 13%
8/4/16 56% 5% 6% 7% 13% 13%

Asset Allocation as a % of Max Preferred Exposure

CASH US EQUITIES INTL EQUITIES COMMODITIES FIXED INCOME INTL CURRENCIES
8/3/16 57% 15% 18% 18% 39% 39%
8/4/16 56% 15% 18% 21% 39% 39%
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

BREAKING: #BoE cuts rates by 25bps to 0.25% Increases QE target to £60 bil ... including £10 bil corp bond purchases pic.twitter.com/ZY1nGitV3d

@Hedgeye

QUOTE OF THE DAY

“The difference between ordinary and extraordinary is that little extra”

-Jimmy Johnson

STAT OF THE DAY

Marquis Grissom played 17 years in the MLB, with 2,251 hits.