CLIENT TALKING POINTS
Europe
1 down day for European stocks and then straight back up this morning with Italy +1.1% still leading the squeeze; especially with the EUR/USD at the top-end of its $1.03-1.06 risk range, this is healthy as the inverse correlation should get European Equity Bulls paid on any USD strength.
Commodities
Straight back up +1.4% to 196 yesterday puts the CRB Index right back at 3-month highs – that all but ensures that both DEC and JAN PPIs (Producer Prices) continue to ramp in rate of change terms; you’ll get the DEC PPI print this morning, but this is central to #InflationAccelerating to a y/y crescendo throughout Q1.
US Financials
Led losers -0.85% (XLF) yesterday, but we wouldn’t be betting on the bear side of that continuing with both rates and USD testing the low-end of their respective risk ranges; we're a buyer of XLF on any correction below $23 as US growth and inflation accelerating pay to be long that macro exposure.
Asset Allocation
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 1/12/17 | 30% | 18% | 13% | 12% | 0% | 27% |
| 1/13/17 | 29% | 19% | 14% | 11% | 0% | 27% |
Asset Allocation as a % of Max Preferred Exposure
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 1/12/17 | 30% | 55% | 39% | 36% | 0% | 82% |
| 1/13/17 | 29% | 58% | 42% | 33% | 0% | 82% |
THREE FOR THE ROAD
TWEET OF THE DAY
China’s Exorbitant Detriment, Mirror Image of America’s Exorbitant Privilege, Is Costing It Dearly by @BennSteil app.hedgeye.com/feed_items/565
@Hedgeye
QUOTE OF THE DAY
“Ability is what you’re capable of doing. Motivation determines what you do. Attitude determines how well you do it.”
-Lou Holtz
STAT OF THE DAY
The San Diego Chargers are moving to Los Angeles to become the Los Angeles Chargers.