CLIENT TALKING POINTS
UK
Oh have the Brexit Bears (on the economy) been wrong – UK Services PMI for DEC accelerates (again) to 56.2 DEC vs. 55.2 NOV and the FTSE hits yet another post Brexit high; I still like the Pound on pullbacks to the low-end of my range
Volume
My price/volume/volatility signal continues to signal buying opportunities on slowing volume DOWN days; the last 2 UP days for the SP500 have seen Total US Equity Market Volume +11% and +30%, respectively, vs. the 1-month avg.
10YR
One of the few remaining economic data series that has NOT accelerated is NFP – if that were to change tomorrow, I see Gold getting smoked and the 10yr getting to at least 2.61%; the y/y NFP “compare” for JAN is a lot easier than the comp for DEC, so we might have to wait another month; but the probability isn’t low that the jobs market stops slowing Q1/Q2.
TOP 4 LONGS: USD (or UUP in ETF terms), GBP/EUR, XOP, and QQQ
TOP 3 SHORTS: Gold (GLD), EUR/USD (FXE), Long-term Treasuries (TLT)
Asset Allocation
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 1/4/17 | 31% | 21% | 10% | 11% | 0% | 27% |
| 1/5/17 | 33% | 18% | 10% | 11% | 0% | 28% |
Asset Allocation as a % of Max Preferred Exposure
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 1/4/17 | 31% | 64% | 30% | 33% | 0% | 82% |
| 1/5/17 | 33% | 55% | 30% | 33% | 0% | 85% |
THREE FOR THE ROAD
TWEET OF THE DAY
Kohl's ($KSS) putting up $4 in EPS is kind of like bigfoot. People talk about it all the time, but nobody ever sees it.
QUOTE OF THE DAY
"I want to stay as close to the edge as I can without going over. Out on the edge you see all kinds of things you can't see from the center. Big, undreamed-of things – the people on the edge see them first."
–Kurt Vonnegut
STAT OF THE DAY
Active equity funds closed out 2016 with cumulative annual fund flows at new all-time lows. Domestic equity lost -$237.5 billion in 2016, outstripping 2015's -$174.3 billion outflow to become the worst year on record.