CLIENT TALKING POINTS
UK
All the while this story of Pound Crashing (-0.3% at $1.22 GBP/USD) + UK 10yr Bouncing continues (+5bps to 1.07%); this is obviously one of the top drivers of everything FX and rates right now, but the move is finally signaling some exhaustion.
Copper
Post the Chinese #DemandSlowing data yesterday, Copper resumed its long-term bear market, trading back down to $2.11/lb; our call remains that Global GDP (and cyclical demand) is entering its slowest part of the cycle (Q4 and Q1) and “earnings recovery” expectations remain way too high.
Sectors
Basic Materials (XLB, -3.3% OCT to-date), Healthcare (XLV, -2.8% OCT), and Industrials (XLI, -2.2% OCT) are the 3 worst performing sectors so far with Earnings Season underway; Financials (XLF, +0.2% OCT at -0.1% YTD) and I don’t think that’s going to hold as consumer credit continues to deteriorate.
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 | |
|---|---|---|---|---|---|---|
| 10/13/16 | 48% | 8% | 3% | 14% | 27% | 0% |
| 10/14/16 | 52% | 6% | 4% | 13% | 25% | 0% |
Asset Allocation as a % of Max Preferred Exposure
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 10/13/16 | 48% | 24% | 9% | 42% | 82% | 0% |
| 10/14/16 | 52% | 18% | 12% | 39% | 76% | 0% |
THREE FOR THE ROAD
TWEET OF THE DAY
4 Reasons Why We (Still) Don’t Like Hanesbrands | $HBI app.hedgeye.com/archives/54532… cc @HedgeyeRetail @KeithMcCullough
@Hedgeye
QUOTE OF THE DAY
“Without continual growth and progress, such words as improvement, achievement, and success have no meaning.”
–Benjamin Franklin
STAT OF THE DAY
Clayton Kershaw earned his first MLB save last night to advange the Dodgers to the NLCS.
