CLIENT TALKING POINTS
GDP
The US Retail Sales report yesterday, mattered, a lot – the GDP “control group” was +4.0% y/y in JAN vs. +3.4% in DEC – with 13 of 30 data points in our tracker for Q1 GDP its running hotter (i.e. Quad2, not Quad3) at +2.29% y/y which implies a +2.35% q/q annualized print, confirming why growth and inflation exposures keep working.
Italy
Being long Italian stocks is not working (again); down -0.4% this morning and -1.4% in the last month in what’s been a sea of green for Global Equity markets; partly why you see European Equities softer this morning is EUR/USD bouncing off the low-end of our $1.05-1.07 risk range (European stocks need Down Euro).
UST 2YR
Big ramp to +1.27% yesterday on both growth (Retail Sales) and inflation (CPI ripping to +2.5% JAN y/y from +2.1% in DEC) accelerating and now you see Fed Fund Futures starting to price in a May rate hike (up to 60% probability vs. 53% pre data releases); we still think they should raise rates in March too – NOV-JAN data clearly supports it.
Asset Allocation
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 2/15/17 | 51% | 13% | 11% | 10% | 0% | 15% |
| 2/16/17 | 47% | 13% | 12% | 11% | 0% | 17% |
Asset Allocation as a % of Max Preferred Exposure
| CASH | US EQUITIES | INTL EQUITIES | COMMODITIES | FIXED INCOME | INTL CURRENCIES | |
|---|---|---|---|---|---|---|
| 2/15/17 | 51% | 39% | 33% | 30% | 0% | 45% |
| 2/16/17 | 47% | 39% | 36% | 33% | 0% | 52% |
THREE FOR THE ROAD
TWEET OF THE DAY
With short interest still elevated at 30.6% we see significant upside heading into 2017 app.hedgeye.com/insights/57362… @HedgeyeHC @HedgeyeHIT $EXAS
@Hedgeye
QUOTE OF THE DAY
“The saddest thing in life is wasted talent.”
–Robert De Niro (A Bronx Tale)
STAT OF THE DAY
The average MLB team starts spring training with 65 players, 60% of which will be cut and sent down to the minors.