CLIENT TALKING POINTS
UST 10YR
Rates down, globally, this morning on the heels of Hilsenrath’s article in the WSJ “Fed Inclined To Stand Pat” and more #GrowthSlowing data in Europe; UST 10YR Yield 1.65% remains in crash mode (-27% YTD) with immediate-term downside in the risk range to 1.50% with more US #GrowthSlowing data due out on Thursday/Friday.
VIX
Since everyone is net long everything (stocks, bonds, reflation, commodities, etc.) markets probably can’t tolerate Rates Down, Stocks Down (that’s what happened post the DEC hike) and our immediate-term risk range for US Equity Volatility (13.29-18.07) implies plenty of chop to risk manage from here.
SP500
Unless volume backs off and SP500 can re-capture our immediate-term TRADE momentum line of 2171, what was steady support for US Equity Beta this summer is now resistance; the US Equity market needs some really bad growth data to ensure Yellen doesn’t hike into a slow-down.
TOP LONG IDEAS
GLD
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.”
TLT
No update this week.
Asset Allocation
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 9/12/16 | 52% | 6% | 5% | 7% | 27% | 3% |
| 9/13/16 | 55% | 4% | 4% | 7% | 27% | 3% |
Asset Allocation as a % of Max Preferred Exposure
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 9/12/16 | 52% | 18% | 15% | 21% | 82% | 9% |
| 9/13/16 | 55% | 12% | 12% | 21% | 82% | 9% |
THREE FOR THE ROAD
TWEET OF THE DAY
$P | our Long thesis in under 60 seconds. Great work by our media team here @Hedgeye youtube.com/watch?v=8otDYP… pic.twitter.com/77xrAgIrN2
@HeshamShaaban
QUOTE OF THE DAY
“The price of success is hard work, dedication to the job at hand, and the determination that whether we win or lose, we have applied the best of ourselves to the task at hand.”
-Vince Lombardi
STAT OF THE DAY
Carlos Hyde ran for 88 yards and 2 TD's last night in a win against the Rams.
