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A Letter to Newborn "Inflation Hawks"

Editor's Note: The insight below accompanied a new Real-Time Alert signal sent to subscribers yesterday.

 

To the newborn "inflation hawks" (the old ones from 2012 died),

 

So... you want to go Ex-GDP and go for another hike because “inflation is reaching the target” do you? Cool. In addition to commodity-linked inflation proxies getting deflated last week, the 5yr US Treasury Break-Even rate dropped 2 basis points on the week to 1.34%.

 

In other words, with:

 

A)     GDP tracking towards 1.1% in Q3 (we’ll get that print right before the election)

B)     Housing and Consumer Confidence rolling off their #LateCycle peaks

C)     Inflation pressures deflating from their Down Dollar YTD highs

D)     Yield Spread (UST 10yr minus 2yr) at its YTD low (down 5bps last week)

E)      SP500 dead flat now vs. 1 month ago today

 

The Fed has “clearly seen improvements for the last 2 months?” Or were those the politically prepared remarks pre the SP500 (you-ge indicator!) going down for 5 of the last 6 trading days and US Equity Volatility (VIX) ramping +20.4% in a week?

 

The only thing that’s crystal clear to me at this point is that

 

A) the US GDP growth cycle peaked in mid-2015

B) inflation has had what the Fed should call “transitory” reflation

C) the labor cycle continues to slow from its 2015 rate of change cycle peak.

 

A Letter to Newborn "Inflation Hawks" - late cycle cartoon 10.08.2015

 

Short the Financials vs. your Long-term Bond core longs.

KM


PREMIUM INSIGHT

The Essential Election 2016 Health Policy Guide

The Essential Election 2016 Health Policy Guide - healthcare1

This is an institutional research note written by Hedgeye Healthcare Policy analyst Emily Evans. For additional information about our institutional research email to sales@hedgeye.com.


Las Vegas Sands (LVS): Best Idea Long Call Today

Takeaway: Our Gaming, Lodging, and Leisure analysts are hosting a Best Idea call (long) call on Las Vegas Sands today.

Las Vegas Sands (LVS): Best Idea Long Call Today - LVS

 

LVS: BEST IDEA LONG

Conference Call

11:00AM ET

KEY TOPICS OF DISCUSSION

Mass Outlook - Inflecting Positive 

  • Hedgeye Mass Tracker results
  • Impact of new rooms on GGR
  • Visitation (overnight vs. same-day), hotel guests stays, average length of stay, and RevPAR

2Q 2016 Market Analysis 

  • Mass table efficiency
  • Minimum bet limit / observed average bets 
  • Promotional spending
  • Market share analysis

LVS - Best Idea Long

  • Mass centric business model
  • Estimates look acheivable and potentially beatable
  • Strong balance sheet - low leverage and high free cash flow generation
  • Sustainable and growing dividend now funded by free cash flow - 6% dividend yield

Q&A

 

CALL DETAILS

Attendance on this call is limited.

Please note if you are not a current subscriber to our Gaming, Lodging, and Leisure research there will be a fee associated with this call. Ping sales@hedgeye.com for more information.

 

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Poll of the Day: Which "Simpsons" Character BEST Represents Centrally Planned Markets

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Daily Market Data Dump: Tuesday

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: Tuesday - equity markets 8 30

 

Daily Market Data Dump: Tuesday - sector performance 8 30

 

Daily Market Data Dump: Tuesday - volume 8 30

 

Daily Market Data Dump: Tuesday - rates and spreads 8 30

 

Daily Market Data Dump: Tuesday - currencies 8 30

 

Daily Market Data Dump: Tuesday - commodities 8 30


CHART OF THE DAY | Stocks: Puppies & Rainbows? Or Jobs Report Bomb

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.

 

"... To put this in practical terms, let’s go through the SP500 setup one more time:

  1. It just had a text-book bounce off the low-end of my immediate-term 2167-2192 risk range
  2. It’s still signaling bullish from an intermediate-term TREND perspective (2141 support)
  3. It’s likely going to have a big move in/out of the US jobs report on Friday

If the jobs number is a bomb (Dollar Down, Rates Down), can stocks rip? Yes. If the jobs number is rainbows and puppy dogs (Dollar Up, Rates Up), can stocks get ripped? Yes. Can anything happen in between? Yes."

 

CHART OF THE DAY | Stocks: Puppies & Rainbows? Or Jobs Report Bomb - 08.30.16 EL Chart


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