• [WEBCAST] Raoul Pal & Neil Howe: A Sobering U.S. Economic Reality Check

    Prepare your portfolio for “big picture” paradigm shifts with Real Vision co-founder Raoul Pal and Demography analyst Neil Howe. Watch the replay from this webcast.

Client Talking Points

USD

US Dollar Index -0.6%, Yen +0.9%, Euro +0.6%, Pound +0.5% - all close to the top/bottom of their respective immediate-term risk ranges in a counter-TREND move post the Trump Show; with the Nasdaq having made its 4th straight all-time closing high (SPX 2 pts off its ATH), you are going to have counter-TREND corrections.

UST 10 YR

Dollar Down, Rates Down, Gold Up – all of this is one big macro move that we think you fade (again); both the US 10yr -5bps at 2.32% and Gold at $1203 provide another opportunity to do what we’ve been doing on counter-TREND days for the last 2 months – looking for a hawkish US PPI print tomorrow w/ US #InflationAccelerating.

VIX

Any time front month VIX gets to 10-11, you’re making equity sales (after you bought US Equity Beta in the VIX 13-14 range); if the 10.16-13.39 risk range for the VIX changes, I’ll be the first to let you know – but this remains a bull market in High Beta, complimented by Volume/Volatility signals, until proven otherwise.

Asset Allocation

CASH US EQUITIES INTL EQUITIES COMMODITIES FIXED INCOME INTL CURRENCIES
1/11/17 30% 18% 12% 13% 0% 27%
1/12/17 30% 18% 13% 12% 0% 27%

Asset Allocation as a % of Max Preferred Exposure

CASH US EQUITIES INTL EQUITIES COMMODITIES FIXED INCOME INTL CURRENCIES
1/11/17 30% 55% 36% 39% 0% 82%
1/12/17 30% 55% 39% 36% 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

whole surface has shifted lower but USO skew at its both negative tilt in over 2 years (110 vs 90% and 120 vs 80% strikes)

@Hedgeye_Comdty

QUOTE OF THE DAY

“There are no constraints on the human mind, no walls around the human spirit, no barriers to our progress except those we ourselves erect.”

–Ronald Reagan

 

STAT OF THE DAY

The Dallas Cowboys average 4.8 yards per rushing attempt.