CLIENT TALKING POINTS
Japan
Dollar Down, Yen Up …. And the Nikkei smoked right back into crash mode (-1.6% overnight and -21% from the 2015 Global Equity #Bubble peak) as the BOJ did the un-thinkable and didn’t “buy stocks” into the bell… (this should all end well).
Oil
Straight up 3-day ramp with Down Dollar helping the cause, but now we have both an immediate-term TRADE oversold signal in USD and an overbought one in WTI which now has a wide immediate-term risk range of $39.67-45.99/barrel.
Gold
Much prefer being long Gold to something like the US stock market and/or Oil here and we’ve been crystal clear on that – immediate-term risk range for Gold (and Platinum) is tightening (Oil’s is widening) and that’s a bullish signal (range = $1/oz).
TOP LONG IDEAS
GLD
See update on TLT below.
TLT
Eurozone GDP, reported Friday, signaled more of the same, stagnation. With that being said there were small but marginal Euro tailwinds against a U.S. retail sales report and PPI release that was likely dovish on the margin (USD -~20bps on Friday and -~60bps on the week).
In line with our #EuropeSlowing theme, Q2 preliminary GDP slowed across the Eurozone to +0.3% vs. +0.6% in the prior quarter and +1.6% Y/Y for Q2 which was flat on a rate of change basis from Q1.
Looking at specific country results:
- German (0.4% vs 0.7% sequentially) GDP accelerated to +1.8% Y/Y from +1.6% which was probably a minor Euro FX tailwind
- Italian GDP came in at +0.7% Y/Y which was a deceleration from +1.0% in Q1
- Greece GDP accelerated to contraction again, printing a measly -0.1% Y/Y from -1.3% in Q1
The Southern Eurozone states continue to implode
UUP
Recall that a strong retail sales report for June, driven by a positive trend in goods consumption, was a large contributor to our GDP revision for Q2. The headline number, for June, was up +0.6% sequentially with the sequential acceleration in the control group accelerating +7.2% (annualized).
Friday’s retail sales report was a different story, and probably a dovish data point for the USD on the margin :
- The control group printed flat sequentially, +0.0%
- Retail sales ex. auto and gas printed -0.3% sequentially
Next to retail sales, July headline producer prices decelerated -0.4% vs. +0.5% in June sequentially and -0.2% Y/Y vs. +0.3% Y/Y in June. PPI ex. food and energy came in at 0.0% sequentially vs. +0.4% in June and +0.7% Y/Y from +1.3% in June. #Deflation
Asset Allocation
CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
---|---|---|---|---|---|---|
8/15/16 | 56% | 4% | 4% | 12% | 15% | 9% |
8/16/16 | 55% | 3% | 4% | 12% | 16% | 10% |
Asset Allocation as a % of Max Preferred Exposure
CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
---|---|---|---|---|---|---|
8/15/16 | 56% | 12% | 12% | 36% | 45% | 27% |
8/16/16 | 55% | 9% | 12% | 36% | 48% | 30% |
THREE FOR THE ROAD
TWEET OF THE DAY
Hain: Something New Under The Sun? app.hedgeye.com/insights/53129… via @HedgeyeHWP @HedgeyeFood @KeithMcCullough $HAIN $VRX
@Hedgeye
QUOTE OF THE DAY
“Keep your eyes on the stars, and your feet on the ground.”
-Theodore Roosevelt
STAT OF THE DAY
Simone Biles won her 3rd Gold Medal at the Rio games. Only 12 other countries have more than 3 Gold Medals currently.