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The Grind: What's In My Notebook?

Another day, another grind…



  1. SP500 remains bullish from an immediate term TRADE perspective with an important line of support at 1135.
  2. The RANGE in my SP500 3-day probability model remains very tight and trade-able at 35pts
  3. Yesterday’s down day came on a weak volume study (as opposed to UP volume on DOWN days which is the TREND)
  4. All 9 sectors in our S&P Sector Risk Mgt model remain bullish from an immediate term TRADE perspective
  5. M&A continues to see more rumors than realities but Unilever for Alberto Culver yesterday was at least true
  6. China had 21 banks agree to sell loans on China’s interbank market = 1st time the govt allowed these transactions = liquidity
  7. Vietnam reported an accelerating sequential q/q GDP growth # for Q3 last night at +7.2% y/y vs. +6.4% in Q2
  8. German consumer confidence (OCT) improved to 4.9 in the GFK report vs. 4.3 last
  9. German (DAX) and UK (FTSE) stocks continue flash positive global divergences (bullish TRADE and TREND)
  10. Euro and British Pound continue to be bullish on both TRADE and TREND (we are long Pounds versus short USD)
  11. Commodities (CRB Index) continue higher in the face of a US Dollar debasement (inverse correlations on immediate term TRADE duration high)
  12. Gold is holding a very immediate term TRADE line of important price momentum of $1285
  13. Copper continues to trade in a Bullish Formation (bullish TRADE, TREND, and TAIL)
  14. Agricultural and soft commodities continue to make higher-highs and higher-lows (Bullish Formations)
  15. Israel joins an expanding list of countries who see global inflation re-accelerating for what it is and raises interest rates to 2% this morning 


  1. SP500 is broken again from an intermediate term TREND perspective (resistance = 1144)
  2. Volatility (VIX) continues to trade with an extremely high inverse correlation to the SP500 with TREND line support for the VIX at 20.96
  3. Inclusive of this morning’s weakness, the SP500 is actually down for 5 out of the last 6 trading days (market breadth deteriorating)
  4. Financials (XLF) remain the only sector in the SP500 (of the 9 we model top down daily) that’s bearish from a TREND perspective
  5. Yield Spread (10s to 2s) continues to compress this week versus last and remains a bearish headwind for US Financials earnings
  6. High Yield is trading within 7bps of its April 2010 highs at 8.25%; this is a contrarian indicator, big time
  7. Levered Loan Index at 15.13 is 5bps away from its late April early May highs; another contrarian (bearish) indicator for equities
  8. Case Shiller Prices (JUL) rollover again sequentially (month over month)
  9. US Consumer confidence comes in at a bomb 48.5 for SEP versus 53.2 AUG despite CNBC cheering the stock market higher
  10. “Republican House” finds its way onto the cover of Barron’s = consensus bullish catalyst now
  11. M&A rumors haven’t been this frothy since September of 2007 (we’ve counted 67 alleged “takeouts” that haven’t occurred)
  12. US Dollar Index continues to burn at the stake of QE hope; down now for the 15th of the last 18 weeks and Washington doesn’t care
  13. US Treasury Yields are in a Bearish Formation across the curve (2yr yield TRADE resist = 0.51%) = bearish signal for US economic growth
  14. Chinese stocks have closed down for 5 out of the last 7 days and the Shanghai Composite is now broken on immediate term TRADE duration
  15. Japanese stocks continue to be the armpit that is long term QE; Nikkei down 3 of last 4 days and down -10% for 2010 to-date
  16. Japanese exports (AUG) hammered sequentially down to +15.3% y/y vs +23.5% y/y in JUL
  17. Japan’s Bureaucrats calling for another 4.6 TRILLION Yen in stimulus and proposing to pay for it by raising taxes this time?
  18. Spain’s IBEX is testing a TRADE line breakdown for the first time in months; support line could become resistance at 10,499
  19. Italy’s CDS continues to push higher at 205bps and remains the country with the most downside relative to consensus (we’re short EWI)
  20. European CDS continues to push wider on the heels of Greek Equities getting smoked (down -12% since 1st week of September with SPY +9%)
  21. Russian equities weakening in the face of Medvedev firing the longstanding (18 year) mayor of Moscow
  22. Romania’s Interior Minister resigns in the face of austerity implementation
  23. Sri Lanka is now issuing sovereign debt ($6B worth) and markets there are cheering it on?
  24. Dubai says “we are back”


Altogether the fundamental research DATA continues to tilt to the bearish side (as of the last 6 trading days) but PRICES are not entirely confirming how bad the DATA has become. I think a lot of this has to do with severe performance problems in the US hedge fund business into month and quarter end, so we may need to close an eye or two here for the next 72 hours before some of the smoke signals clear.


In the Hedgeye Portfolio we are still giving the benefit of the doubt to the bulls (LONGS = 12, SHORTS = 9), but I am increasingly concerned about October.




Keith R. McCullough
Chief Executive Officer


The Grind: What's In My Notebook? - The Grind

R3: UA, NFL, Fila, JJB, and Bedbugs


September 28, 2010


A fair amount of activity in the athletic space this morning, led by a strong initial day of trading by Fila.  Keep an eye on Fleet Feet Sports and the proliferation of the NFL into the women’s apparel market.





- Expect TLC’s bridal show spin-off, “Big Bliss” to be filled with advertising from retailers looking to capitalize on the plus size demographic.  The six episode spin-off of “Say Yes to the Dress” will chronicle plus-sized brides searching for the perfect gown at Kleinfeld’s in Manhattan.


- Topshop continues its expansion with the announcement of the company’s second stateside location, this time in Chicago.  The British retailer is also seeking locations in additional metro areas including Las Vegas, San Francisco, Miami, LA, and NYC.


- Back to school was a key driver of an acceleration in web traffic to retail-related websites.  Sites seeing major increases included: Target (+6.2%), Staples (+22.8%), JC Penney (+24.8%), Kohls (+23.8%), Macy’s (+13%), Zappos (+30.3%) and Gap (+19.6%). 


- Keep an eye on website Sourcemap.com.  The site aims to increase transparency in supply chains, allowing consumers to know where items come from and what exactly they are made of.  With genuine concern from shoppers regarding sustainability and social responsibility, transparency is becoming a much bigger factor in the consumer’s decision making and purchasing process. 


- In a sign that Tommy Hilfiger is accelerating its new ‘Tommy’ concept – a new line that will be a departure from preppy basics, its Bleeker Street location is under renovation and already sporting new signage. Certainly more aggressive than initial plans to soft launch the brand in Canada, the new concepts location should give Tommy and PVH a quick read on demand as it opens in time for the holiday season.


- In an attempt to kickoff its new Sport Performance collection in world record fashion, Jockey rallied more than 100 players for a game of dodgeball in Chicago wearing nothing but skivvies. We hope the line is more successful than the company’s guerilla marketing attempt since it fell far short of its goal of more than 1,200 participants.


- Macy’s Inc. is touting Elvis Christmas tree ornaments in Tennessee and Blackhawks decorations in Illinois ahead of the holidays, tailoring goods for local markets to squeeze more out of its biggest shopping season. The company is hoping its “My Macy’s” will add as much as 3% to the chain’s holiday sales at stores.


- The 65th session of the United Nation's General Assembly has plagued many retailers since its open last Tuesday, driving down traffic for most stores as local shoppers couldn't access the area due to street closures and chose to steer clear of the chaos.





Fleet Feet Sports to Acquire Phidippides Encino - Specialty Retail Development Company (SRDC), Inc., a multi-store Fleet Feet Sports franchise affiliated with Fleet Feet Sports Inc., announced the purchase of Phidippides Encino, a top running shop in Los Angeles. Change of possession will take place on Nov. 1. Phidippides Encino has served the Southern California running community for 30 years and is one of the pioneering, premier specialty stores in the United States.  <sportsonesource.com>

Hedgeye Retail’s Take: Without knowing the terms of the deal it’s difficult to speculate on its financial merits, but adding nearly 20 additional running specialty locations to its base of 90 makes Fleet Feet an increasingly more relevant player amongst athletic footwear retailers nationwide.


Fila Korea IPO Set for September 28th - Fila Korea Ltd., which in March 2007 purchased the Fila brand from Sports Brands International Ltd., will complete the initial public offering of its shares on the Korean Stock Exchange (KRX) on Tuesday, September 28th. Proceeds will be used to pay down debt. <sportsonesource.com>

Hedgeye Retail’s Take: After posting a 26% increase in sales in the 1H of 2010, shares doubled on its debut on the Kospi. With its re-entry into the basketball category back in April, the brand moves up in relevance on our radars in athletic footwear as it pursues further share gains.


NFL Launches Women-Specific Campaign - The National Football League is launching a $10 million TV campaign on Monday aimed at reaching women football fans. The effort also includes the launch of the new www.nfl.com/women microsite and is being done in concert with existing partners such J.C. Penney, Kohl's and Dick's Sporting Goods as well as new ones such as Victoria's Secret and Destination Maternity. <sportsonesource.com>

Hedgeye Retail’s Take: According to Scarborough research data on NFL demographics, only 37% of women are considered loyal fans and only 31% avid fans compared to 63% and 69% of men respectively. While a fraction of male audience, the increased spend makes sense given that women’s apparel represents the league’s fastest growing business.


Under Armour Signs Ravens' Anquan Boldin - Under Armour signed Baltimore Ravens wide receiver Anquan Boldin to an endorsement deal. The eight-year veteran is a three-time Pro Bowler and was the 2003 NFL Offensive Rookie of the Year.  <sportsonesource.com>

Hedgeye Retail’s Take: Just a week after signing Dallas receiver Austin Miles, Boldin is cut from the same cloth – known by fans as a physical receiver. The company is clearly becoming more visible with endorsements of professional athletes in addition to its historical stance of supporting collegiate teams – a trend that’s more costly on the margin.


Hundreds Queue as Bangkok Mall Opens Four Months After Deadly Riots, Fire - Hundreds of shoppers lined up to count down the reopening of Thailand’s Central World shopping mall today, more than four months after anti-government protesters torched it during deadly riots in Bangkok.  <bloomberg.com>

Hedgeye Retail’s Take:  Nothing like a shopping mall to symbolize some level of a return to normalcy in Bangkok.


UK Sporting Goods Retailer JJB Sports Increases Promotions to Drive Sales - JJB Sports Plc , the U.K.’s third- largest sporting goods retailer, fell the most in more than 14 months in London trading after the company added promotions following “more volatile” sales since August.  <bloomberg.com>

Hedgeye Retail’s Take:  This trend, while consistent with some back to school activity here in the U.S., runs counter to the full priced selling we are seeing across the athletic space.  Recall that JJB has been struggling for years, as has the entire UK sporting goods sector.


Sales and Site Traffic Jump For E-retailers - Revenue for online merchants has increased 23% so far this year, with web site traffic up 46%, according to a survey of 70 retailers. The findings could foreshadow a successful holiday shopping season. MarketLive Inc. ran a survey of its 70 retail clients finding consumers created 55.9% more shopping carts, and the number of orders grew 32.4%. Conversion rate dropped three-tenths of one percent. Company officials attribute the drop in conversion rate to the nearly 45% increase in traffic to the e-commerce sites.  <internetretailer.com>

Hedgeye Retail’s Take:  Nothing new here except the consumer continues to show interest in convenience and sharp pricing via the web.  Investments in .com infrastructure from traditional retailers have also enhanced the user experience, which in turn is helping to drive growth. 


Obama On Trade - The Obama administration is walking a fine line as it looks to strengthen its trade credentials. The administration is balancing a goal of doubling exports in five years to $3.14 trillion and moving forward with free trade initiatives against stepped-up enforcement of existing trade agreements. It is also reviewing the U.S. relationship with trade partners. It’s been 20 months since President Obama took office, following a long campaign leaning toward protectionism, and his trade agenda has evolved into a bifurcated strategy — emphasizing enforcement by bringing cases against illegal trade practices to the World Trade Organization, and moving slowly on free trade agreements negotiated by the Bush administration that it felt were not strong enough in areas such as labor rights on the one hand, and opening markets for U.S. exports on the other. The centerpiece of the President’s trade agenda so far has been the National Export Initiative, which aims to double exports in five years. <wwd.com/business-news>

Hedgeye Retail’s Take:  While this focus on exports will certainly be a help to the economy, we don’t expect to see any apparel or footwear production moving back onshore. 


More Bedbug Problems For NYC Retailers, Macy's Herald Square Flagship is this Week's Victim - New York’s bedbug problem is spreading to more retailers. Macy’s Inc. is the latest to encounter the parasites. Both Macy’s Herald Square flagship and Bloomingdale’s 59th Street flagship have reported bedbug sightings. Bloomingdale’s last week cited bedbugs but never closed and said it quickly took care of the problem. On Friday, the store distributed a memo to employees as they entered the 59th Street flagship. Other retailers recently citing bedbugs were Niketown on 57th Street, Abercrombie & Fitch in the South Street Seaport, Hollister on Houston Street and Broadway and Victoria’s Secret on Lexington Avenue and 58th Street. They were all temporarily closed and reopened after debugging. <wwd.com/retail-news>

Hedgeye Retail’s Take:  With bedbugs now discovered almost everywhere, the epidemic now shifts to retailers that actually sell solutions.  BBBY, TGT, and WMT all appear to be positioned with sprays and other extermination products.  With that said, we’re not expecting any same stores sales boost as a result of the miniscule pests. 


The St. Petersburg Paradox

“The mathematical expectation of the speculator is zero.”

-Louis Bachelier


Louis Bachelier was a French mathematician who was, well after the fact, credited with founding the Efficient Market Thesis.  In 1900 Bachelier published his Ph.D thesis titled “The Theory of Speculation.”  In his paper, Bachelier discussed the use of Brownian motion to evaluate stock prices.  Unfortunately, his thesis was “not appropriately received”, which resulted in academic black-balling and the concept being buried for more than sixty years.


Almost sixty-five years later Professor Eugene Fama from the University of Chicago was officially credited with developing the Efficient Market Thesis after publishing his Ph.D thesis.  His paper was titled “The Behavior of Stock Market Prices.”  The core tenet of his paper and the Efficient Market Thesis is that an investor “cannot consistently achieve returns in excess of average of market returns on a risk-adjusted basis, given the information that is publicly available at the time the investment is made.”


Is it not somewhat ironic that the determination of who founded the Efficient Market Thesis was not efficient?


Despite not having a Ph.D on staff at Hedgeye Risk Management, we have been performing our own experiment to test the Efficient Market Thesis over the past two years.  We call this experiment the Hedgeye Virtual Portfolio, and it is a culmination of our stock picks since inception.


In that time, we have closed 510 long positions and closed 490 short positions. 85.9% of the closed long positions have been winners and 83.5% of the closed short positions have been winners.  Obviously, these results are far from a “random walk”.  So, either we are good at our jobs, or the market is not quite as efficient as Efficient Market Theorists believe.  I would submit that it is a combination of both.   


Clearly, though, many stock market participants work hard, have processes, and are intelligent.  So, why do many stock market operators underperform even the basic broad market returns? Simply put, because of this little critter called Behavioral Economics that leads many market participants to act against their best interests. 


By way of example, let’s consider the St. Petersburg Paradox, which is as follows:


“Consider the following game of chance: you pay a fixed fee to enter and then a fair coin is tossed repeatedly until a tail appears, ending the game. The pot starts at 1 dollar and is doubled every time a head appears. You win whatever is in the pot after the game ends. Thus you win 1 dollar if a tail appears on the first toss, 2 dollars if a head appears on the first toss and a tail on the second, 4 dollars if a head appears on the first two tosses and a tail on the third, 8 dollars if a head appears on the first three tosses and a tail on the fourth, etc. In short, you win 2^k−1 dollars if the coin is tossed k times until the first tail appears.”


So, what would be a fair price to pay for entering the game?


I posed this question to our Research Team at Hedgeye yesterday and they came back with myriad of answers, which ranged from $1 to infinity.  This simple mathematical answer is that you should be willing to pay infinity (or your entire net worth) to play this game as your expected value is infinity.


 As one of our astute Analysts responded to me yesterday:


“Well, the series doesn’t converge …EV = (1/2)*($1) + (1/4)*($2) + (1/8)*($4) + …EV = ½ + ½ + ½ + …… the sum of which is infinite.  So, is the fair entering price infinite? Strictly speaking, I think the answer is yes – but no one on earth would take that deal (even if we cap the number of rounds such that EV = all your money, since no one has infinite money).”


Therein is another paradox, the paradox of the Efficient Market Thesis.  Specifically, most market operators do not make rational decision based on math.  They make emotional decisions based on arbitrary evaluations of risk. This, of course, leaves opportunities for the sneaky mathematicians to make profit.


So then, how do we account for valuation when considering an investment?  Surely, valuation is rational?


In my view, valuation is an indicator of sentiment around a security.  For instance, when a stock trades with a single digit P/E, its business is either declining, or the collection of market operators believe it is.  There are many studies that support the idea that value based strategies (i.e. buying cheap stocks) outperform over time, but I would submit that this is not because of the valuation, but rather because of the behavioral finance indicator embedded therein.


As we consider the stock market today, the first question many strategists try to answer is whether the stock market is “cheap”.  The simple way to make this determination is to pull up a long term price / earnings chart and look at it going back fifty years.  Today, at 15x current earnings and 13.7x forward earnings, the SP500 looks cheap versus history. 


The more important task though is determining what expectations are embedded in that valuation.  What is the correct earnings multiple for an economy that has crossed the Rubicon of Debt at 90% debt / GDP and has budget deficits projected for the next thirty plus years (I would say infinity, but that’s probably not fair)? Additionally, if growth rates are mired in the 1 - 2% range as a result of this fiscal situation, is the stock market “cheap”?


In the shorter term, setting those sneaky valuation metrics to the side for a second, what do you think is priced into the S&P500 up 8.8% in September?  Given the cover of Barron’s this weekend and the rapid rise in the S&P in the last few weeks, the catalyst of the Republicans winning more seats than expected in the midterms is likely priced in. (We called this out on our conference call with Karl Rove in early September - Could the Midterm Election Be A Major Stock Market Catalyst?)  So, what is priced in now?


Well, perhaps our friend George Soros said it best:


“The financial markets generally are unpredictable. So that one has to have different scenarios. The idea that you can actually predict what's going to happen contradicts my way of looking at the market.”


Or as we say at Hedgeye, the plan is that the plan will change.


Yours in risk management,


Daryl G. Jones

Managing Director


The St. Petersburg Paradox - PE

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The Macau Metro Monitor, September 28th 2010



Visitor arrivals to Singapore registered 18% growth in August to 996,000.  It is also the ninth consecutive month of record visitor arrivals.  STB stated that the two IRs, Youth Olympic Games, and the strength of the Asian economy attributed to the growth.  The top markets--Indonesia, China, Malaysia, Australia and India-- gained 25%, 51%, 22%, 2%, and 4%, respectively.


STB also said average occupancy rate in August rose to 85%, a gain of 7.6% points YoY. ADR increased 24.7% YoY to S$218.




According to AGI, one Macau operator is now offering a 57% share of the VIP profit to junkets, keeping only 3% for itself.  This would be 15% more than Wynn Macau has reportedly being offering junkets under its profit share set up.  AGI believes the 40:57:3 model could bring about a price war as aggressive as those seen in late 2007 and the autumn of 2009.  The 40:57:3 model probably only makes economic sense for the operator if the operator no longer has to staff and directly manage the VIP rooms involved and passes that responsibility instead to the junkets.



MGM China Holdings Limited, yesterday filed a proposed listing application with the HKSE.  According to MGM Resorts International, “there have not been any decisions made regarding the timing or terms of any such listing or whether MGM China Holdings Limited will ultimately proceed with such a transaction or whether the proposed transaction will ultimately be approved by the Hong Kong Exchange.”  According to previous media reports, to goal of the IPO is to raise US$500 million (MOP4 billion).


Higher commission rates are only part of the more competitive VIP environment.



We are pleased investors are finally focused on the increasing competition for Macau junkets.  Wynn’s market share was ripe for the taking as Four Seasons recently figured out.  MGM’s strategy has been clear for months and MPEL has been very aggressive on the VIP side for a few months.  Higher commissions are only part of the story.


With a huge book of junket business, the lowest junket commissions in Macau, and a conservative credit issuance policy, Wynn’s VIP business remains vulnerable.  We’ve been making that call for months.  The other call we’ve been making is MPEL and MGM gaining share.  With these guys, it’s not just about aggressive commissions.


Both MGM and MPEL may be advancing commissions to junkets for up to 3-4 months versus the former standard 15-30 days.  Wynn advances commissions to junkets in the beginning of each month for roughly 30 days. We're hearing that even Venetian has moved up to 2 months recently.  Market share data for September will again show strong market shares from MGM (despite low hold) and MPEL and weak share for Wynn (partly due to low hold); so clearly junket credit matters.  It may start to matter enough for Wynn.  We believe Wynn may be considering a more aggressive junket strategy for the first time to offset the competitive onslaught.


The sell side has finally figured out that the environment has gotten more competitive.  They’ve focused only on higher commission rates.  That may certainly impact margins so the explosive VIP growth is not all good news.  We are starting to worry a bit that a credit bubble could be forming.  Current volumes may be unsustainable.  How long can the operators continue to provide this duration of liquidity?  What happens when a junket can’t pay?  We’re not sure this level of credit is sustainable.


Over the near term, the credit bubble is still building.  Volumes will remain strong as long as liquidity remains.  Even though MPEL has been an aggressor, the stock remains the one with the most near term upside, in our opinion.  The good news for near-term investors in MPEL is that it appears to be driving VIP through commission advancement rather than further hikes in commission rates.  Near term margins will look better under this scenario and the company should finally be able to put up estimate beating quarters until the credit dries up.


TODAY’S S&P 500 SET-UP - September 28, 2010

As we look at today’s set up for the S&P 500, the range is 17 points or -0.71% downside to 1134 and 0.77% upside to 1151. Equity futures have turned higher following comments by Fitch that Ireland may avoid further downgrades if it comes out with a credible cost plan for Anglo Irish Bank.  Earlier today, Ireland reiterated it would not default on ANGL senior debt.

  • American Capital Agency (AGNC) plans to sell 10m shares in secondary offering
  • Cognex (CGNX) raises 3Q rev. forecast to $74m-$76m vs estimate $66.7m
  • Entropic Communications (ENTR) plans to offer 10m shares
  • LaSalle Hotel Properties (LHO) said CFO Hans S. Weger will leave the company by February 28
  • Pfizer (PFE) discontinued phase 3 trial evaluating Sutent drug with prednisone for castration- resistant prostate cancer
  • Viacom (VIA/B US) CEO Philippe Dauman, told CNBC that ad market is “strong,” sees “sequential growth” over next two quarters 


  • One day performance: Dow (0.44%), S&P (0.57%), Nasdaq (0.48%), Russell (0.41%)
  • Month-to-date: Dow +7.96%, S&P +8.85%, Nasdaq +12.1%, Russell +11%
  • Quarter-to-date: Dow +10.62%, S&P +10.81%, Nasdaq +12.35%, Russell +9.65%
  • Year-to-date: Dow +3.68%, S&P +2.43%, Nasdaq +4.43%, Russell +6.86%


  • ADVANCE/DECLINE LINE: -485 (-2465)
  • VOLUME: NYSE: 920.44 (-14.04%)  
  • SECTOR PERFORMANCE: Other than continued M&A there was not much news flow yesterday; neither major economic data points nor big corporate releases. European bank/credit concerns pressured the financial sector, which was the worst performing sector. Technology and utilities were positive and Financials was the worst performing sector.  
  •  MARKET LEADING/LAGGING STOCKS YESTERDAY: Southwest Air 8.71%, Juniper +4.20% and Pulte +3.56%/M&T Bank -7.04%, Intuitive -5.01% and Monsanto -4.17%
  • VIX: 22.54 +3.82% - YTD PERFORMANCE +3.97%
  • SPX PUT/CALL RATIO: 1.73 from 1.57 +9.93%


  • TED SPREAD: 14.84 -1.116 (-6.997%)
  • 3-MONTH T-BILL YIELD: 0.16% +0.1%
  • YIELD CURVE: 2.10 from 2.17


  • CRB: 284.14 +0.18% - up 4 days in a row.
  • Oil: 76.52 +0.04%
  • COPPER: 359.70 -0.58%
  • GOLD: 1,297.02 +0.08%


  • EURO: 1.3479 -0.10%
  • DOLLAR: 79.338 -0.07%



  • FTSE 100: (0.40%); DAX (0.16%); CAC 40 (0.19%)
  • Equities are trading lower as concerns over the economies resurface following negative news flow concerning Spain, Greece and Ireland.
  • Automobiles, Construction & Materials and Banks are among the worst performing sectors.
  • UK Q2 Final GDP +1.2% q/q vs consensus +1.2%
  • UK Q2 Final GDP +1.7% y/y vs consensus +1.7%
  • France August Consumer Spending (1.6%) m/m vs consensus +0.2%
  • France July Consumer Spending +2.7% m/m vs consensus +0.6% and prior revised (1.5%) from (1.4%)
  • Germany Oct GfK Consumer Sentiment Indicator +4.9 vs consensus +4.2 and prior revised +4.3  


  • Asian Markets: Nikkei (1.12%); Shanghai Composite (0.63%)
  • Most Asian markets followed Wall Street down today.
  • Australia was also flat.
  • South Korea slipped as carmakers and tech stocks gave up recent gains.
  • China declined when weakness in financials and profit-taking in airlines outweighed strong performances by agricultural stocks.
  • The combination of a weak performance by Wall Street and a strong yen sent Japan lower, though expectations for further monetary easing by the Bank of Japan provided some support.
  • The yen is trading at 84.20 to the US dollar. 

Howard Penney

Managing Director 


THE DAILY OUTLOOK - levels and trends