CLIENT TALKING POINTS
UK
Center-stage the last few weeks with the Pound crashing and 10yr Gilt Yields backing up to 1.00%; can this keep USD ramping higher, daily? How about rates? I think we’re closer to the end of this counter-TREND move on the rates side – we’ll see how the bond market trades today on GBP/USD +1.2% off oversold lows of $1.21.
Euro
Our best FX idea remains shorting the Euro vs. USD as the Europeans enter a protracted recession in 2017 (particularly in the South of Europe); while it’s signaling immediate-term TRADE oversold within its bearish @Hedgeye TREND at $1.10 this am, the real action starts on EUR/USD breakdown of $1.05.
Sectors
Yeah, Utes have corrected hard (so buy some if you missed them earlier in the year), but Healthcare and Double-Dip Recession (Industrials) stocks are correcting hard too! Healthcare (XLV) led losers yesterday at -2.5%; part of that is election expectations, but a bigger part that’s weighed on the group this year is that Healthcare is #LateCycle .
TOP LONG IDEAS
GLD
Industrial production, capital goods orders, and factory orders continue to look recessionary. Specifically, all three series have experienced negative growth for the longest period ever without a recession.
VYM
Growth Slowing...
TLT
Growth Slowing...
Asset Allocation
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 10/11/16 | 46% | 8% | 4% | 15% | 27% | 0% |
| 10/12/16 | 48% | 8% | 3% | 14% | 27% | 0% |
Asset Allocation as a % of Max Preferred Exposure
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 10/11/16 | 46% | 24% | 12% | 45% | 82% | 0% |
| 10/12/16 | 48% | 24% | 9% | 42% | 82% | 0% |
THREE FOR THE ROAD
TWEET OF THE DAY
Yellen's Favorite Economic Indicator Is Still Falling app.hedgeye.com/archives/54469… via @Hedgeye #Fed #ratehike @KeithMcCullough #economy $SPY
@Hedgeye
QUOTE OF THE DAY
“When change is necessary, not to change is destructive.”
-A. R. Bernard
STAT OF THE DAY
The Chicago Cubs came back to score 4 runs in the 9th inning to eliminate the San Francisco Giants from the MLB playoffs.
