CLIENT TALKING POINTS
Oil
We’re bearish on Oil supply (no freeze), but if you believe the Fed pivots back to dovish this week, you wouldn’t be shorting it or anything “reflation” at the low-end of its risk range which WTI almost touched last week (range = $42.38-45.22).
Gold
At -0.82 has the highest short-term (2 week) inverse correlation to a Down Dollar Dovish Fed pivot this week (if you’re keeping score, this would be Yellen’s 6th hawkish/dovish pivot in 9 months); so we still like that long into the event.
FTSE
Smack-down in the Pound (vs. USD) late last week is precisely what the FTSE needs to go higher – this has little to do with economics and a lot to do with currency devaluation expectations; FTSE +1.4% this am, leading a bounce in Global Equities.
TOP LONG IDEAS
GLD
On the inflation front, comps get much easier moving forward (we’ve been in a deflationary environment for 2 years!). Our GDP estimates for Q3 and Q4 are below the street and Central Bank forecasts. For the full-year, we’re well below at +1.2% Y/Y vs. the Fed at 2.0%. If these estimates converge, we expect it to be dovish on the margin when coupled with our bearish rates view. The inflation comps effect and a policy catalyst are shaping our fundamental views of a longer term gold position (GLD).
VYM
We continue to observe that growth is slowing in aggregate. We continue to like bonds (TLT, MUB) and bond proxies (VYM).
TLT
See update on VYM.
Asset Allocation
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 9/18/16 | 52% | 3% | 3% | 9% | 31% | 2% |
| 9/19/16 | 52% | 3% | 4% | 10% | 29% | 2% |
Asset Allocation as a % of Max Preferred Exposure
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 9/18/16 | 52% | 9% | 9% | 27% | 94% | 6% |
| 9/19/16 | 52% | 9% | 12% | 30% | 88% | 6% |
THREE FOR THE ROAD
TWEET OF THE DAY
~CHART OF THE DAY~ Since Fed Is $SPY Dependent Here's A Buying Opportunity app.hedgeye.com/insights/53898… @KeithMcCullough pic.twitter.com/5JQ77hxteM
@Hedgeye
QUOTE OF THE DAY
“Change doesn’t come in nickels and dimes. It comes in dedication and sweat. ”
-Toni Sorenson
STAT OF THE DAY
Sterling Shepard caught 8 passes for 117 yards (career high), in a Giants win over the New Orleans Saints.
