CLIENT TALKING POINTS
UST 10YR
Globally, yields are up (again) on the long-end this morning, but it looks tame to me within the context of what’s been happening in the last year; JGB 10YR is up 1 beep this am at -0.01%; German 10YR +3bps to 0.04% and UST 10YR +1 beep to 1.69% with an immediate-term risk range of 1.51-1.70%; #breathe and buy bonds.
Gold
Either doesn’t believe the Fed hikes or believes that a hike would be the most dovish catalyst of all – either way, Gold beat stocks last week, closing +0.6% w/w in a sea of cross-asset allocation red; up +0.1% this AM to +25.4% YTD
SP500
Risk happens slowly, then all at once… SPX broke our immediate-term TRADE momentum line of 2171 support and didn’t look back with volatility (front month VIX) ramping +46.5% on the week; risk range is now 2115-2170, so we'll register this as a buy/cover day; the constitution of the bounce will be critical to analyze.
TOP LONG IDEAS
GLD
No update this week.
TLT
No update this week.
VYM
After a relative pull-back in large cap, low beta, liquid names (an exposure we’ve like for the balance of the year). We can now buy back that exposure lower. As you can see in the style factor table below, high debt, high beta, and small cap stocks in the S&P 500 have outperformed over the last month. As Keith McCullough wrote to II subs Friday:
“We've seen plenty a one-way chart chaser lose lots of other people's money doing it otherwise (they are chasing what’s worked recently). VYM has a 3% Yield and is signaling immediate-term TRADE oversold within our bullish intermediate-term @Hedgeye TREND view.”
Asset Allocation
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 9/11/16 | 58% | 3% | 5% | 7% | 25% | 2% |
| 9/12/16 | 52% | 6% | 5% | 7% | 27% | 3% |
Asset Allocation as a % of Max Preferred Exposure
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 9/11/16 | 58% | 9% | 15% | 21% | 76% | 6% |
| 9/12/16 | 52% | 18% | 15% | 21% | 82% | 9% |
THREE FOR THE ROAD
TWEET OF THE DAY
OIL: fails @Hedgeye TREND resistance (again) -1.7% to $45.08 pic.twitter.com/qXJIN4mMzW
@KeithMcCullough
QUOTE OF THE DAY
“The little hand says it’s time to rock and roll…”
-Bodhi
STAT OF THE DAY
Jimmy Garoppolo threw for 264 yards and 1 TD last night in a win against the Arizona Cardinals.
