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PREMIUM INSIGHT

About Everything | Augmented Reality: Better Than Virtual?

About Everything | Augmented Reality: Better Than Virtual? - pokemon go

In this complimentary edition of About Everything, Hedgeye Demography Sector Head Neil Howe discusses the media hype surrounding virtual reality versus "the next big thing [that] may already be sitting in your pocket: augmented reality." Howe breaks down the key takeaways and explains the broader implications for investors.


MONDAY MORNING RISK MONITOR | DEFAULTING TO OPTIMISM

Takeaway: Without much news out, markets broadly followed oil prices higher, as OPEC announced it will hold an informal meeting in September.

MONDAY MORNING RISK MONITOR | DEFAULTING TO OPTIMISM - RM11

 

Key Takeaway:

Without much news out last week, markets broadly followed oil prices higher, as OPEC announced it will hold an informal meeting in September. CDS tightened globally, the high yield YTM fell by -16 bps to 6.33%, and the price of Chinese steel rose 1.5%.

 

Our heatmap below is positive across all durations.

 

Current Ideas:

MONDAY MORNING RISK MONITOR | DEFAULTING TO OPTIMISM - RM19

 

Financial Risk Monitor Summary

• Short-term(WoW): Positive / 5 of 13 improved / 2 out of 13 worsened / 6 of 13 unchanged
• Intermediate-term(WoW): Positive / 5 of 13 improved / 2 out of 13 worsened / 6 of 13 unchanged
• Long-term(WoW): Positive / 4 of 13 improved / 1 out of 13 worsened / 8 of 13 unchanged

MONDAY MORNING RISK MONITOR | DEFAULTING TO OPTIMISM - RM15


1. U.S. Financial CDS
– Swaps tightened for 11 out of 13 domestic financial institutions as investors defaulted to optimism without much news last week but with oil prices pushing higher.

Tightened the most WoW: BAC, C, AXP
Widened the most WoW: HIG, COF, UNM
Widened the least/ tightened the most WoW: LNC, COF, UNM
Widened the most MoM: AIG, JPM, GS

MONDAY MORNING RISK MONITOR | DEFAULTING TO OPTIMISM - RM1

 

2. European Financial CDS – Financials swaps mostly tightened in Europe last week. Portugal, however, was an outlier. CDS for its Banco Espirito Santo widened by 98 bps to 1188.

MONDAY MORNING RISK MONITOR | DEFAULTING TO OPTIMISM - RM2

 

3. Asian Financial CDS – Financials swaps mostly tightened in Asia last week. Only Nomura Holdings CDS widened minimally, by 1 bps to 80.

MONDAY MORNING RISK MONITOR | DEFAULTING TO OPTIMISM - RM17

 

4. Sovereign CDS – Sovereign swaps mostly tightened over last week. However, Italian sovereign CDS widened by 6 bps to 132.

MONDAY MORNING RISK MONITOR | DEFAULTING TO OPTIMISM - RM18

 

MONDAY MORNING RISK MONITOR | DEFAULTING TO OPTIMISM - RM3


5. Emerging Market Sovereign CDS – Emerging market swaps mostly tightened last week. Russian sovereign swaps, however, stood out with a move 13 bps wider to 231.

MONDAY MORNING RISK MONITOR | DEFAULTING TO OPTIMISM - RM16

6. High Yield (YTM) Monitor – High Yield rates fell 16 bps last week, ending the week at 6.33% versus 6.49% the prior week.

MONDAY MORNING RISK MONITOR | DEFAULTING TO OPTIMISM - RM5

7. Leveraged Loan Index Monitor  – The Leveraged Loan Index rose 4.0 points last week, ending at 1938.

MONDAY MORNING RISK MONITOR | DEFAULTING TO OPTIMISM - RM6

8. TED Spread Monitor  – The TED spread rose 1 bps last week, ending the week at 54 bps this week versus last week’s print of 53 bps.

MONDAY MORNING RISK MONITOR | DEFAULTING TO OPTIMISM - RM7

9. CRB Commodity Price Index – The CRB index rose 1.6%, ending the week at 183 versus 180 the prior week. As compared with the prior month, commodity prices have decreased -3.3%. We generally regard changes in commodity prices on the margin as having meaningful consumption implications.

MONDAY MORNING RISK MONITOR | DEFAULTING TO OPTIMISM - RM8

10. Euribor-OIS Spread – The Euribor-OIS spread (the difference between the euro interbank lending rate and overnight indexed swaps) measures bank counterparty risk in the Eurozone. The OIS is analogous to the effective Fed Funds rate in the United States.  Banks lending at the OIS do not swap principal, so counterparty risk in the OIS is minimal.  By contrast, the Euribor rate is the rate offered for unsecured interbank lending.  Thus, the spread between the two isolates counterparty risk. The Euribor-OIS spread was unchanged at 5 bps.

MONDAY MORNING RISK MONITOR | DEFAULTING TO OPTIMISM - RM9

11. Chinese Interbank Rate (Shifon Index) – The Shifon Index rose 2 basis points last week, ending the week at 2.02% versus last week’s print of 2.00%. The Shifon Index measures banks’ overnight lending rates to one another, a gauge of systemic stress in the Chinese banking system.

MONDAY MORNING RISK MONITOR | DEFAULTING TO OPTIMISM - RM10

12. Chinese Steel – Steel prices in China rose 1.5% last week, or 39 yuan/ton, to 2617 yuan/ton. We use Chinese steel rebar prices to gauge Chinese construction activity and, by extension, the health of the Chinese economy.

MONDAY MORNING RISK MONITOR | DEFAULTING TO OPTIMISM - RM12

13. Chinese Non-Performing Loans – Chinese non-performing loans amount to 1,437 billion Yuan as of June 30, 2016, which is up +31.6% year over year. Given the growing focus on China's debt growth and the potential fallout, we've decided to begin tracking loan quality. Note: this data is only updated quarterly.

MONDAY MORNING RISK MONITOR | DEFAULTING TO OPTIMISM - RM4

14. Chinese Credit Outstanding – Chinese credit outstanding amounts to 151.4 trillion RMB as of July 31, 2016 (data released 8/12/2016), which is up +15.0 trillion RMB or +11.0% year over year. Month-over-month, credit is up +374 billion RMB or +0.2%. Note: this data is only updated monthly.

MONDAY MORNING RISK MONITOR | DEFAULTING TO OPTIMISM - RM20

15. 2-10 Spread – Last week the 2-10 spread tightened to 81 bps, -6 bps tighter than a week ago. We track the 2-10 spread as an indicator of bank margin pressure.

MONDAY MORNING RISK MONITOR | DEFAULTING TO OPTIMISM - RM13

16. CDOR-OIS Spread – The CDOR-OIS spread is the Canadian equivalent of the Euribor-OIS spread. It is the difference between the Canadian interbank lending rate and overnight indexed swaps, and it measures bank counterparty risk in Canada. The CDOR-OIS spread widened by 1 bps to 40 bps.

MONDAY MORNING RISK MONITOR | DEFAULTING TO OPTIMISM - RM14


Joshua Steiner, CFA



Jonathan Casteleyn, CFA, CMT



Patrick Staudt, CFA


Daily Market Data Dump: Monday

Takeaway: A closer look at global macro market developments.

Editor's Note: Below are complimentary charts highlighting global equity market developments, S&P 500 sector performance, volume on U.S. stock exchanges, rates and bond spreads, key currency crosses, and commodities. It's on the house. For more information on how Hedgeye can help you better understand the markets and economy (and stay ahead of consensus) check out our array of investing products

 

CLICK TO ENLARGE

 

Daily Market Data Dump: Monday - equity markets 8 15

 

Daily Market Data Dump: Monday - sector performance 8 15

 

Daily Market Data Dump: Monday - volume 8 15

 

Daily Market Data Dump: Monday - rates and spreads 8 15

 

Daily Market Data Dump: Monday - currencies 8 15

 

Daily Market Data Dump: Monday - commodities 8 15


Early Look

daily macro intelligence

Relied upon by big institutional and individual investors across the world, this granular morning newsletter distills the latest and most vital market developments and insures that you are always in the know.

Got #GrowthSlowing? These Poor Central Planners Just Don't Get It

Takeaway: The 10s/2s yield spread was down -6bps on the week & down -41bps year-to-date. Got #GrowthSlowing?

Another “scare” of “rising 10yr yields” met with another ramp in long-term bonds last week; we’re up to $13.4T in negative yielding bonds globally now (vs. 13.1T last wk) as global growth continues to look like Yield Spreads (slowing); UST 10yr down another beep to 1.50% this morning and the USA Yield Spread testing YTD lows at 80bps (short Banks #reiterated).

 

Got #GrowthSlowing? These Poor Central Planners Just Don't Get It - 10yr2yr 8 15

 

Editor's Note: The snippet above is from a note written by the Hedgeye Macro team and sent to subscribers this morning. Click here to learn more.


August 15, 2016

Want more from Daily Trading Ranges? CLICK HERE to submit up to 4 tickers you'd like to see on the list. 

 

  • Bullish Trend
  • Bearish Trend
  • Neutral

INDEX BUY TRADE SELL TRADE PREV. CLOSE
UST10Y
10-Year U.S. Treasury Yield
1.58 1.46 1.51
SPX
S&P 500
2,156 2,194 2,184
RUT
Russell 2000
1,207 1,243 1,229
COMPQ
NASDAQ Composite
5,110 5,265 5,232
NIKK
Nikkei 225 Index
16,401 17,066 16,919
DAX
German DAX Composite
10,260 10,903 10,713
VIX
Volatility Index
11.01 14.77 11.55
USD
U.S. Dollar Index
94.99 96.64 95.68
EURUSD
Euro
1.09 1.12 1.11
USDJPY
Japanese Yen
100.06 103.21 101.23
WTIC
Light Crude Oil Spot Price
39.28 44.98 44.49
NATGAS
Natural Gas Spot Price
2.45 2.90 2.59
GOLD
Gold Spot Price
1,324 1,375 1,343
COPPER
Copper Spot Price
2.12 2.20 2.14
AAPL
Apple Inc.
103.52 110.30 108.18
AMZN
Amazon.com Inc.
755 781 772
NFLX
Netflix Inc.
91.10 97.66 96.59
JPM
J.P. Morgan Chase & Co.
62.82 66.81 65.32
INTC
Intel Corp.
34.11 35.99 34.57
TWTR
Twitter Inc.
17.87 20.74 19.54
XOP
SPDR S&P Oil & Gas Explore
33.06 36.81 36.08
RMZ
MSCI US REIT
1,235 1,275 1,244


Hedgeye's Daily Trading Ranges are twenty immediate-term (TRADE) buy and sell levels, along with our intermediate-term (TREND) view.  Click HERE for a video from Hedgeye CEO Keith McCullough on how to use these risk ranges.


CHART OF THE DAY: Reflation Under Siege

Editor's Note: Below is a brief excerpt and chart from today's Early Look written by Hedgeye CEO Keith McCullough. Click here to learn more.

 

"... With the “reflation” trade under siege since peaking in early June, a -0.2% year-over-year Producer Price report for JUL (vs. +0.3% y/y in JUN) gave the market what it loves most when it can’t beat 1% GDP growth – Down Dollar, Down Rates:

 

  1. US Dollar Index ended the week down -0.5%
  2. US 10yr Yield fell 8 basis points on the week to 1.51%
  3. CRB Index and Oil reflated +0.5% and +6.4% on the week, respectively" 

 

CHART OF THE DAY: Reflation Under Siege - 08.15.16 chart


Hedgeye Statistics

The total percentage of successful long and short trading signals since the inception of Real-Time Alerts in August of 2008.

  • LONG SIGNALS 80.46%
  • SHORT SIGNALS 78.35%
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