CLIENT TALKING POINTS
USD
Remains resilient in the 99-101 zone for the US Dollar Index where we think it should consolidate until we get clarity on Friday’s big USA economic data (GDP and Durable Goods #GrowthAccelerating); Euros and Yens selling of -0.5-0.6% this morning vs. USD and both of those currencies remain bearish TRENDs @Hedgeye.
Tech
Another day of relative and absolute gains for Tech (XLK) yesterday vs. Beta (SPY) with XLK closing +0.2% to +3.2% YTD with an early lead on the Sector Style leaderboard for 2017; we remain bullish on the Nasdaq and QQQ but from a price – we just wish we had a real correction day like we did in both NOV and DEC.
VIX
Realized vol continues to get smashed (30-day realized volatility for the SP500 = 6.6%!) but implied volatility premiums remain high as consensus continues to position for a correction in SPY that has not come for 2 months (30-day implied volatility premium for SP500 = +29%!); front month VIX risk range = 10.67-13.16.
Asset Allocation
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 1/23/17 | 26% | 20% | 17% | 10% | 0% | 27% |
| 1/24/17 | 22% | 21% | 18% | 11% | 0% | 28% |
Asset Allocation as a % of Max Preferred Exposure
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 1/23/17 | 26% | 61% | 52% | 30% | 0% | 82% |
| 1/24/17 | 22% | 64% | 55% | 33% | 0% | 85% |
THREE FOR THE ROAD
TWEET OF THE DAY
UST 10YR Yield +3bps to 2.43% remains bullish TREND @Hedgeye inasmuch as GDP growth does (due out Friday)
@KeithMcCullough
QUOTE OF THE DAY
“Happiness lies in the joy of achievement and the thrill of creative effort.”
–Franklin D. Roosevelt
STAT OF THE DAY
Chris Hogan has 4 career TD's, 2 have come in the 2016 post season.
