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Daily Market Data Dump: Tuesday

Takeaway: A closer look at global macro market developments.

Editor's Note: Below are complimentary charts highlighting global equity market developments, S&P 500 sector performance, volume on U.S. stock exchanges, rates and bond spreads, key currency crosses, and commodities. It's on the house. For more information on how Hedgeye can help you better understand the markets and economy (and stay ahead of consensus) check out our array of investing products

 

CLICK TO ENLARGE

 

Daily Market Data Dump: Tuesday - equity markets

 

Daily Market Data Dump: Tuesday - sector performance

 

Daily Market Data Dump: Tuesday - volume

 

Daily Market Data Dump: Tuesday - rates and spreads

 

Daily Market Data Dump: Tuesday - currencies

 

Daily Market Data Dump: Tuesday - commodities


September 20, 2016

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  • Bullish Trend
  • Bearish Trend
  • Neutral

INDEX BUY TRADE SELL TRADE PREV. CLOSE
UST10Y
10-Year U.S. Treasury Yield
1.73 1.52 1.70
SPX
S&P 500
2,105 2,159 2,139
RUT
Russell 2000
1,200 1,264 1,232
COMPQ
NASDAQ Composite
5,111 5,262 5,235
XOP
SPDR S&P Oil & Gas Explore
34.71 37.15 36.09
RMZ
MSCI US REIT
1,140 1,213 1,187
NIKK
Nikkei 225 Index
16,230 16,771 16,519
DAX
German DAX Composite
10,175 10,770 10,373
VIX
Volatility Index
14.02 19.84 15.53
USD
U.S. Dollar Index
94.50 96.25 95.76
EURUSD
Euro
1.11 1.13 1.11
USDJPY
Japanese Yen
101.07 103.86 101.88
WTIC
Light Crude Oil Spot Price
42.05 45.20 43.86
NATGAS
Natural Gas Spot Price
2.66 3.04 2.93
GOLD
Gold Spot Price
1,302 1,352 1,317
COPPER
Copper Spot Price
2.05 2.17 2.15
AAPL
Apple Inc.
108.19 117.99 113.58
AMZN
Amazon.com Inc.
751 791 775
JPM
J.P. Morgan Chase & Co.
65.30 67.62 66.19
INTC
Intel Corp.
35.88 38.00 37.16
LVS
Las Vegas Sands Corp.
53.50 58.67 56.61
CMG
Chipotle Mexican Grill, Inc.
395 414 402

Hedgeye's Daily Trading Ranges are twenty immediate-term (TRADE) buy and sell levels, along with our intermediate-term (TREND) view.  Click HERE for a video from Hedgeye CEO Keith McCullough on how to use these risk ranges.


If the Fed wants to be hawkish, the data isn’t…

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?

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%
The maximum preferred exposure for cash is 100%. The maximum preferred exposure for each of the other assets classes is 33%.

Top Long Ideas

Company Ticker Sector Duration
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.

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.


CHART OF THE DAY: A Chance To Buy Long Bonds ... Again

Editor's Note: Below is a brief excerpt and chart from today's Early Look written by Hedgeye CEO Keith McCullough. Click here to learn more.

 

"... In my own 7 game series, this is game 6… and I’m down by a goal going into the 3rd period. As you can see in the Chart of the Day, since this is the 6th “rates are gonna rip” scare in the last 16 months, my team has already won 5 games in a row and now we’re just playing for fun."

 

CHART OF THE DAY: A Chance To Buy Long Bonds ... Again - 09.20.16 EL Chart


The Orginal Long Bond Bulls

“The hallmark of originality is rejecting the default and exploring whether a better option exists.”

-Adam Grant

 

I’ve spent a lot of time in the last 16 months trying to think for myself on why slower and lower for longer was the better option than living in perpetual fear of a redo of the “rates rising” call we made (short the Long Bond and Gold) in 2013.

 

Thank god I have great, data dependent, teammates. Without them grinding through the data on big sequential head-fakes, it would have been next to impossible to explore the real possibility that trending US and Global Growth would continue to slow in the 2nd half of 2016.

 

Now what? Are we in the middle of a double-dip #recession in cyclicals? How about the recession in US corporate profits that hasn’t gone away? After we get through this Federal Reserve nonsense tomorrow, we can go back to doing our job, measuring and mapping the data.

 

The Orginal Long Bond Bulls - Yellen cartoon 04.06.2016

 

Back to the Global Macro Grind

 

The Original Long Bond Bulls understand the secular demand problem that is American Demographics. I think someone like Jeff Gundlach in particular has been right on the money with a view I think he shares with our very own Demography Sector Head, Neil Howe.

 

That’s the longer-term call. It’s one I highly doubt Gundlach has changed his mind on. In the shorter-term, he’s been way more cautious than I’ve even hinted at being on both long-term bonds and their equity proxies.

 

While being on the other side of him at this stage of the game probably makes me overthink my premise (the guy is just flat out good), I think I’ll be less bad at macro if I can come out on the other side of this debate with either a tie or a win.

 

Q: A tie? What kind of a mediocre athlete plays for a tie?

A: One that’s behind in the game

 

In my own 7 game series, this is game 6… and I’m down by a goal going into the 3rd period. As you can see in the Chart of the Day, since this is the 6th “rates are gonna rip” scare in the last 16 months, my team has already won 5 games in a row and now we’re just playing for fun.

 

Oh, and I’m a better hockey player than Jeff too.

 

“Man, you cocky little Mucker.” Yes, Jeff – that is with a M, not an F. The CEO of Wells Fargo spells his last name with F. And let’s just thank God we’re not him testifying in front of the Senate Banking Committee today! Lots of F-bombs from WFC and “Financials” bulls in 2016. #Lots

 

In all seriousness though, I’m feeling pretty good about tying this game up in the 3rd period. Is confidence allowed anymore in this game? I certainly hope so. Versus Gundlach’s view, this is where I think the game is at:

 

  1. Gundlach doesn’t think the Fed makes a policy mistake and raises rates tomorrow – I agree.
  2. Gundlach thinks the Fed’s commentary is going to be hawkish – I don’t (isn’t not raising implicitly dovish?)
  3. If Gundlach is right and the Fed is hawkish, I think the data gets even more dovish in SEP anyway.

 

You see, the Fed going from hawkish to dovish to hawkish to dovish to hawkish (i.e. the last 5 rhetorical policy pivots in the last 16 months of this epic 7 game series) has been a major catalyst augmenting the longer-term TREND of real GDP #GrowthSlowing:

 

  1. When they went hawkish (raising rates in DEC) they triggered Deflation’s dominoes = bearish growth and inflation
  2. When they went back to dovish in MAR, they triggered a reflation of the deflation = stagflation
  3. When reflation ramped, sequential “inflation” data did, and so did lots of things that are in a recession
  4. When they went back to hawkish in August… Oil, PMIs, ISMs, etc. did the double-dip cyclical recession thing
  5. If they stay hawkish, all that cyclical, energy, and industrial “data” will continue to slow

 

Then they’ll go back to dovish into the election anyway. They’re one more bad jobs report away from that.

 

If you actually read one sentence below the Old Wall Media headline that “Gundlach Sees Hawkish Fed Statement And Unfriendly Bond Environment”, you’ll see that he thinks the “new normal” in the 10yr is going to be 1.70% instead of 1.55%.

 

In other words, he pasted me to the boards with this 6 week call to be short duration after the most epic decline in long-term bond yield history. But I don’t think he’s going to beat me being short duration for either the 2016 season, or the rest of game 7.

 

As for Gundlach’s outlook on 2017, that’s a different 7 game series for the little David (McCullough) vs. the Bond Market Goliath. I’m secretly hoping we end up on the same team again. The handoff to “fiscal” is one that could scare yields higher – and maybe for the right reasons.

 

But, some big things happen before we get to that part of #TheCycle. The #1 catalyst for bond yields to rise isn’t a headfake in “inflation”, it’s real GDP growth accelerating like it did in 2013. #BigFiscal needs a catalyst too – a double-dip recession in everything that hasn’t bottomed.

 

That’ll be when this Original Long Bond Bull hopefully sells into a re-test of the all-time high.

 

Our immediate-term Global Macro Risk Ranges are now:

 

UST 10yr Yield 1.52-1.73%

SPX 2105-2159

VIX 14.02-19.84
USD 94.50-96.25
Oil (WTI) 42.05-45.20

Gold 1

 

Best of luck out there today,

KM

 

Keith R. McCullough
Chief Executive Officer

 

The Orginal Long Bond Bulls - 09.20.16 EL Chart


JT TAYLOR: Capital Brief

<chart1>

 

“Things don't turn up in this world until somebody turns them up.”

-  James A. Garfield

 

TERROR TAKES CENTER STAGE: Leaders emerge in times of tragedy, and this time around, we are once again witnessing two contrasting responses from candidates running to be the country’s next leader. Both remained true to form in their reactions, with Donald Trump sounding alarms and returning to his extreme profiling stance and Hillary Clinton offering caution. Trump took the stage and reported what no news outlets or law enforcement officials had yet, stating he predicted this would happen, while Clinton delivered more somber remarks, and outlined her goals to combat terrorism and increase national security. Candidates ultimately differentiate themselves in times like these and Trump is tapping into the angst many Americans are feeling and his call to beef up border security has given him an edge so far.   

 

MISSING OUT ON MILLENNIALS?: Clinton knows her poll numbers and support among millennials are sagging and she’s lost some valuable ground here - especially to Gary Johnson and Jill Stein. Even though she’s still leading in national polls, she’s trailing in her own goal to motivate and excite young voters who launched President Barack Obama in PA and nationally in 2008 and 2012 - Obama won 60% of the millennial vote, and Clinton currently stands at 31% down from 48% in August. Clinton does lack the appeal of candidates like Obama and Bernie Sanders, but she knows what she needs to win and is willing to go to great lengths to get it - kicking off her week at Temple University in eastern PA, following a blitzkrieg of visits from her deep surrogate bench last week.

 

CLOSING IN ON A CR: Republicans are hoping to prove Democrats wrong by approving a stopgap bill to fund the government until mid-December later this week. Most outstanding issues, like Planned Parenthood language related to Zika funding, disaster relief for LA, Flint water crisis money, and internet domain oversight are still being resolved in the Senate - a necessary move after House conservatives threatened to withhold support for a bill that didn’t go into next year. If the funding bill passes, notch it as a rare win for a Congress that has unsuccessfully confronted a number of tense issues in this election year. Of course, this isn’t the end of it - the CR is only a patch until December, and a lame duck Congress will need to revisit it in just a few short months.  

 

LITTLE GREEN SHOOTS: Trump is in the midst of receiving an unparalleled amount of small-dollar donations, one that past Republican Party nominees have only dreamed about. When he reveals his campaign’s financials later this week, we expect them to show he has crushed the total haul from small donors compared to the last two Republican nominees. Trump is fast approaching $100 million from donors who have given less than $200, a threshold no previous Republican has ever achieved in a single campaign, and he’s done it in less than three months after signing his first email solicitation in late June. Talk about perfect timing.

 

TRUMP REOPENS DOOR ON BIRTHERISM: Trump, whose entire political persona was built on the conspiracy theory about President Obama’s birthplace, announced he no longer believes his own nonsense, and is falsely blaming Clinton for its genesis. To make matters worse, campaign surrogates like NJ Governor Chris Christie, who is about to face problems of his own, are now aiding and abetting that theory. We thought this inanity was put to bed a long time ago - these next 48 days could be very grim if Trump can’t return to staying on message.

 

TODAY → CALL INVITE: ELECTION UPDATE WITH CHARLIE COOK OF THE COOK POLITICAL REPORT: Please join us for a call today at 2:00 PM EDT with Charlie Cook of the Cook Political Report to discuss his outlook on the presidential race, the state of play for House and Senate elections, and a preview of the upcoming presidential debates later this month. Call details can be found here.

 

PRESIDENTIAL ELECTION OUTLOOK - STATE OF PLAY: In case you missed it, we analyzed some of the largest and most important southeastern states in this year’s presidential election - VA, NC, and FL. With 57 electoral votes at stake, these three states are shaping up to be some of the most highly contested and contentious in U.S. election history. You can read our weekly piece here.

 

DAN CHRISTMAN/SYRIA: ANOTHER 30 YEARS WAR?: In case you missed it, our Geopolitical Analyst LtGen. Dan Christman shared his insight on the Syrian cease-fire deal and the ongoing conflict in the country. You can read his piece here.

 

FIVE REASONS WHY A FREEZE ISN’T IN THE CARDS: Our Senior Energy Analyst Joe McMonigle discussed why Iran cannot freeze, the IEA’s prediction that non-OPEC production will rise in 1H2017, and why this is anti-freeze to Saudi Arabia. You can read his piece here.

 


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