CLIENT TALKING POINTS
Industrials
Up in a down tape yesterday (XLI +0.7% vs. SPX -0.36%) and this is a sector that you want to stay long when we’re in Quad2 (growth and inflation accelerating, at the same time); one of our favorite longs remains Textron (TXT) – Jay Van Sciver and Emo Gardner are our Industrial and Defense analysts.
UST 10 YR
Great week to be long of growth and inflation accelerating as the 10yr Yield is +11bps on the week (+3bps this morning to 2.51%) and short long-term Treasuries; stay with the risk range process and short LT bonds (TLT) closer to the low-end of my current 10yr risk range = 2.33-2.53%, not down here.
EPS
Earnings Season is 10% done (50 of 500 S&P Companies have reported) an aggregates SALES acceleration of +4.1% year-over-year growth and an EPS acceleration (non-GAAP!) of +8.8% y/y growth; this stands in stark contrast to when we were bearish on US Equity Beta at this time last year, when y/y EPS growth was negative.
Asset Allocation
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 1/19/17 | 29% | 19% | 16% | 10% | 0% | 26% |
| 1/20/17 | 27% | 21% | 16% | 10% | 0% | 26% |
Asset Allocation as a % of Max Preferred Exposure
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 1/19/17 | 29% | 58% | 48% | 30% | 0% | 79% |
| 1/20/17 | 27% | 64% | 48% | 30% | 0% | 79% |
THREE FOR THE ROAD
TWEET OF THE DAY
China made up it's economic growth numbers today (6.8% in Q4 vs 6.7% in Q3). But concerns of collapse are overdone. app.hedgeye.com/feed_items/567
@Hedgeye
QUOTE OF THE DAY
“To win, you have to risk loss.”
-Jean-Claude Killy
STAT OF THE DAY
The Green Bay Packers are +5 at the Atlanta Falcons.