CLIENT TALKING POINTS
UST 10YR
Wild and exciting move to the upside in yields provides for an epic buying opportunity in #GrowthSlowing assets – we know that’s not the way equity brokerages say it, but we don’t run a brokerage. Risk range on the 10yr widens out to 1.47-1.73%; in other words, yields can get slammed (again) if this the US “data” continues to slow Thursday/Friday.
Cyclicals
Oh, so it wasn’t a “bottom in global demand” (or PMIs and ISMs, or something like that), after-all? Fun narrative it was in Q2 though (when the “charts” looked good – now they don’t with Industrials, Transports, and Basic Mats –XLI, IYT, XLB - all breaking @Hedgeye intermediate-term TREND support within ongoing long-term TAIL risk views
Gold
Steady is strong in the face of this melt-down in US Equity net LONG positioning (hit its max 2 weeks ago); Gold doesn’t seem to care about the personal issues people at the Fed seem to be having with forecasting; I’m starting like Gold more than long-term bonds right now – that means we like it a lot! Immediate-term risk range = 1/oz.
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 | |
|---|---|---|---|---|---|---|
| 9/13/16 | 55% | 4% | 4% | 7% | 27% | 3% |
| 9/14/16 | 54% | 4% | 4% | 7% | 29% | 2% |
Asset Allocation as a % of Max Preferred Exposure
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 9/13/16 | 55% | 12% | 12% | 21% | 82% | 9% |
| 9/14/16 | 54% | 12% | 12% | 21% | 88% | 6% |
THREE FOR THE ROAD
TWEET OF THE DAY
Steiner: Market Risks Significantly Exceed Reward app.hedgeye.com/insights/53788… via @Hedgeye
@KeithMcCullough
QUOTE OF THE DAY
“The best preparation for tomorrow is doing your best today.”
-H. Jackson Brown, Jr.
STAT OF THE DAY
Brian Dozier and Mark Trumbo lead the MLB in HR's with 41 each.
