CLIENT TALKING POINTS
UK
Carney did his best to devalue the purchasing power of The People yesterday (a little “market security” in exchange for what was great drive for the UK consumer economy in 2015, #StrongPound) and got GBP/USD down to $1.31 while blasting the 10yr Gilt Yield down to 0.63% where it’s holding this morning, down -14bps month-over-month.
Commodities
Quite the bear of deflation re-developing here; shall they call it Commodities “Ex-Energy”? I call this a bearish TREND @Hedgeye with an old wall of resistance up at CRB Index 185 with no legitimate support to 165.
UST 10YR
If you don’t have growth (we’re all in the 1% GDP now) and inflation is deflating, what do you have? A: Long Bond Bulls. A bad jobs report gets me 1.40% on the UST 10yr; a “good one” might get me 1.60%; all the while JGBs and Bunds not moving like they did earlier in the week; watching those closely.
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 | |
|---|---|---|---|---|---|---|
| 8/4/16 | 56% | 5% | 6% | 7% | 13% | 13% |
| 8/5/16 | 64% | 4% | 6% | 6% | 10% | 10% |
Asset Allocation as a % of Max Preferred Exposure
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 8/4/16 | 56% | 15% | 18% | 21% | 39% | 39% |
| 8/5/16 | 64% | 12% | 18% | 18% | 30% | 30% |
THREE FOR THE ROAD
TWEET OF THE DAY
CHART OF THE DAY: Pre-#JobsReport Insights via @HedgeyeUSA app.hedgeye.com/insights/52911… cc @KeithMcCullough #NFP
@Hedgeye
QUOTE OF THE DAY
"I've never lost a game, I just ran out of time"
-Michael Jordan
STAT OF THE DAY
Daniel Murphy is leading the MLB in BA currently, he is hitting .358
