CLIENT TALKING POINTS

China

Is on the precipice of slowing again and their central market planners are actually being forced to drain a ton of liquidity (PBOC market operations = -595B in JAN alone) to defend the Yuan at this 7.0 level vs. USD – we’ll review this developing #StrongDollar Chinese risk on tomorrow’s Q1 2017 Macro Themes Call.

Oil

Provided yet another buying opportunity at the low-end of my risk range yesterday (in US Equity terms, the high beta way to express that = XOP); WTI +0.6% this morning with immediate-term upside to the top end of the range up at $54.80/barrel with OVX downside to 28-29.

Nasdaq

Registered another all-time closing high yesterday as the performance chase in big FANG names that had underperformed post the Trump Win = obvious… from an implied volatility perspective, the more contrarian buy on pullbacks from here is SPY, not QQQ (30-day SPY implied vol premium = +16% vs. Nasdaq down to +9%).

Asset Allocation

CASH US EQUITIES INTL EQUITIES COMMODITIES FIXED INCOME INTL CURRENCIES
1/9/17 39% 15% 9% 10% 0% 27%
1/10/17 34% 18% 10% 11% 0% 27%

Asset Allocation as a % of Max Preferred Exposure

CASH US EQUITIES INTL EQUITIES COMMODITIES FIXED INCOME INTL CURRENCIES
1/9/17 39% 45% 27% 30% 0% 82%
1/10/17 34% 55% 30% 33% 0% 82%
The maximum preferred exposure for cash is 100%. The maximum preferred exposure for each of the other assets classes is 33%.

THREE FOR THE ROAD

TWEET OF THE DAY

RUSSIA: stocks up another +0.6% (+58.5% in the last yr) and we remain bullish on them

@KeithMcCullough

QUOTE OF THE DAY

“And maybe I'm a little smarter now than I was before for all the stupid things I've done.”

–Herb Brooks   

STAT OF THE DAY

Clemson has won 2 national championships in football (1981, 2016).