CLIENT TALKING POINTS
USD
After signaling immediate-term TRADE overbought on “rate hike fears” USD can easily correct back down to the low-end of my immediate-term risk range = 94.50-96.26 on the USD Index; that would give you a pop in EUR/USD to 1.13 fyi.
JGB
Plenty of clever questions in the @Hedgeye inbox on why “JGB yields might rip” (higher)… and they just went lower (again) instead, back down to -0.07% on the JGB 10yr this morning w/ no support to -0.27-0.28%
Utes
As in Utilities (XLU), ramped back up as Energy stocks reverse intraday yesterday; Utes (XLU) up a full +1% on the day taking their S&P Sector lead for 2016 back up to +15.0% vs. Financials (XLF) -1.3%; market sniffing out another dovish pivot?
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 | |
|---|---|---|---|---|---|---|
| 9/19/16 | 52% | 3% | 4% | 10% | 29% | 2% |
| 9/20/16 | 49% | 4% | 5% | 11% | 29% | 2% |
Asset Allocation as a % of Max Preferred Exposure
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 9/19/16 | 52% | 9% | 12% | 30% | 88% | 6% |
| 9/20/16 | 49% | 12% | 15% | 33% | 88% | 6% |
THREE FOR THE ROAD
TWEET OF THE DAY
CHART OF THE DAY: A Chance To Buy Long Bonds ... Again app.hedgeye.com/insights/53927… via @KeithMcCullough $TLT #Bonds #Fed pic.twitter.com/9GNn9I0sz0
@Hedgeye
QUOTE OF THE DAY
“Strength does not come from winning. Your struggles develop your strengths. When you go through hardships and decide not to surrender, that is strength.”
–Arnold Schwarzenegger
STAT OF THE DAY
The Los Angeles Rams have not scored a touchdown since 1994.
