CLIENT TALKING POINTS
Japan
This is the epicenter of all things “central-market-planning innovation” so watch it very closely; Nikkei down hard again overnight on a Yen move that did nothing – despite BOJ “buying” (every day into the close), the crash in the Nikkei (from the 2015 top in the Global Equities bubble) is back to -21.5%.
Italy
When growth slows and rates crash, “there’s no alternative to stocks”, Ex-China, Japan, Italy, Spain, etc… we get the US brokerage narrative, and we also get that if the US economy slows to Italy’s growth rate, stocks and bonds stop going up together too; MIB Index back on its knees this morning at -31.1% from that same Global Equity Bubble top of 2015.
Oil
Yet another chart chase that went bad – the @Hedgeye TAIL risk call on Oil remains firmly intact and all the Fed has to do is make another policy mistake and WTI will have a $3 in front of it; the SP500 “earnings have bottomed” call is a fancy fiction if commodity prices continue their long-term #Deflation from Bernanke’s inflated highs.
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 | |
|---|---|---|---|---|---|---|
| 9/14/16 | 54% | 4% | 4% | 7% | 29% | 2% |
| 9/15/16 | 51% | 5% | 4% | 8% | 30% | 2% |
Asset Allocation as a % of Max Preferred Exposure
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 9/14/16 | 54% | 12% | 12% | 21% | 88% | 6% |
| 9/15/16 | 51% | 15% | 12% | 24% | 91% | 6% |
THREE FOR THE ROAD
TWEET OF THE DAY
GOLD: the recipient of the central-market-planning #BeliefSystem breaking down = $1320/oz = +24.5% YTD pic.twitter.com/MnwsKYUwcG
@KeithMcCullough
QUOTE OF THE DAY
“When you gotta shot, you shoot. Don’t talk.”
-The Good, the Bad and the Ugly
STAT OF THE DAY
Jameis Winston leads the NFL in QBR through week 1.
