What should investors buy or Sell today?
We’ve got some answers…
Each morning, Hedgeye CEO Keith McCullough reviews our asset allocation model for subscribers then breaks down the changes we made versus the prior day. As McCullough says in the video excerpt from The Macro Show above:
“The two big buckets of asset allocation that we’d be net long are U.S. equities and foreign currencies.”
Oil, Dollar, Pound Versus Gold, Bonds, China...
Within U.S. equities, we like oil-related ETFs like Oil & Gas stocks (XOP) and the plain-old commodity Oil (USO). “We had oil and gas on sale earlier this week so XOP is our favorite high beta way to play energy stocks in particular.”
Essentially, after the -2% pullback in oil and gas stocks in the past week this is an efficient way to play our view that stocks are headed higher on U.S. growth is accelerating.
McCullough continues:
“Then on our favorite currency continues to be the ETF for the bullish position on the U.S. Dollar (UUP). Our second favorite currency is still FXB or the British Pound.”
The simple summation on these currency bets is that growth in both the U.S. and U.K. economies is accelerating.
We’d also short exposures that fall when the U.S. economy is growing, like Gold (GLD) and Long Bonds (TLT). Conversely, we think China is slowing so short big cap Chinese stocks (FXI).
Want to dig into each of these ideas further?
Click here to watch The Macro Show from which this clip is pulled, in its entirety. Also, here’s some required reading on each of the aforementioned long and short ideas.
LONGS:
- Oil & Gas related ETFs (XOP, USO): “The U.S. Economy: Growth Accelerating”
- U.S. Dollar (UUP): “Are You Bullish On The U.S. Dollar Yet?”
- British Pound (FXB): “Brexit Fears Overdone, Buy British Pound”
SHORTS:
- Gold (GLD) & Long Bonds (TLT): “The U.S. Economic Message? Buy Stocks, Sell Gold and Bonds”
- Big Cap Chinese stocks (FXI): “Clock Is Ticking On China’s $24 Trillion Debt Time Bomb”
