CLIENT TALKING POINTS
USD
Dollar Down another -0.5% this morning as the world realizes the Fed has pivoted for the 6th time in 9 months (hawkish to dovish to hawkish to dovish to hawkish to … currently dovish!) – all inverse correlations pay out in size.
UST 10YR
Bond Bears run back into their caves as both US and European yields pull back from the top-end of their immediate-term risk ranges (again); German 10s -6bps to -0.06%; UST 10yr 1.64% with a risk range of 1.55-1.72%; Bond Proxies rocked the shorts yesterday too – Utilities (XLU) +2% on the day to +17.1% YTD).
Gold
+1.5% on the day didn’t beat Utes, but certainly beat SPY and the Financials (XLF +0.6% to +0.5% YTD)– at +26% YTD, reiterating Gold, Long-term Bonds (TLT = +13% YTD), and Utilities as our Best Macro Ideas @Hedgeye in 2016.
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 | |
|---|---|---|---|---|---|---|
| 9/21/16 | 47% | 4% | 5% | 12% | 29% | 3% |
| 9/22/16 | 47% | 4% | 5% | 12% | 29% | 3% |
Asset Allocation as a % of Max Preferred Exposure
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 9/21/16 | 47% | 12% | 15% | 36% | 88% | 9% |
| 9/22/16 | 47% | 12% | 15% | 36% | 88% | 9% |
THREE FOR THE ROAD
TWEET OF THE DAY
5 Key Takeaways: What You Need To Know About #Fed & #BoJ Statements by @HedgeyeDDale app.hedgeye.com/insights/53980… @KeithMcCullough #Yellen #BOJ pic.twitter.com/yz0U3ZuybH
@Hedgeye
QUOTE OF THE DAY
“To be prepared for war is one of the most effective means of preserving peace.”
-George Washington
STAT OF THE DAY
Mark Trumbo leads the MLB in HR's with 43.
