CLIENT TALKING POINTS
VIX
Has been smashed (on the front end) alongside US Equity Volume (-26% yesterday vs. 1yr avg); there have only been 5 trading days in the last 30 with a VIX move of +/- 0.5%, but we like to wait on selling US Equity Beta around VIX 11-11.5 #patience; #TradeTheChop.
Oil
#WickedChop continues w/ Oil Volatility (OVX) tracking higher (again) this am off 34-35 support; WTI failed @Hedgeye TAIL risk resistance of $52.12 (again); our Energy Policy analyst Joe McMonigle had a very timely note up intraday yesterday saying fade the Iranian “freeze” noise (I’ll have him on The Macro Show this morning).
Turkey
Air strikes and tanks making legitimate news this morning; Turkish stock market -1.8% after failing @Hedgeye TREND resistance of 79,007 on the ISE National 100 Index; from a GIP Model perspective Turkey remains Quad 3 (teetering on Quad 4) too.
TOP LONG IDEAS
GLD
See update on TLT below.
TLT
#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). #Deflation
Asset Allocation
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 8/23/16 | 49% | 4% | 6% | 12% | 17% | 12% |
| 8/24/16 | 52% | 3% | 5% | 12% | 16% | 12% |
Asset Allocation as a % of Max Preferred Exposure
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 8/23/16 | 49% | 12% | 18% | 36% | 52% | 36% |
| 8/24/16 | 52% | 9% | 15% | 36% | 48% | 36% |
THREE FOR THE ROAD
TWEET OF THE DAY
OIL: fails (again) @Hedgeye TREND resistance, down another -1.7% after yesterdays headfake Iran "news" @JoeMcMonigle pic.twitter.com/5WhOnmmvSl
@KeithMcCullough
QUOTE OF THE DAY
“Ambition is the path to success. Persistence is the vehicle you arrive in.“
-Bill Bradley
STAT OF THE DAY
Eli Manning has 294 career TD's in the NFL.
