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HEDGEYE 2
DISCLAIMER Hedgeye Risk Management is a registered investment advisor, registered with the State of Connecticut. Hedgeye Risk Management is not a broker dealer and does not provide investment advice to individuals. This research does not constitute an offer to sell, or a solicitation of an offer to buy any security. This research is presented without regard to individual investment preferences or risk parameters; it is general information and does not constitute specific investment advice. This presentation is based on information from sources believed to be reliable. Hedgeye Risk Management is not responsible for errors, inaccuracies or omissions of information. The opinions and conclusions contained in this report are those of Hedgeye Risk Management, and are intended solely for the use of Hedgeye Risk Management’s clients and subscribers. In reaching these opinions and conclusions, Hedgeye Risk Management and its employees have relied upon research conducted by Hedgeye Risk Management’s employees, which is based upon sources considered credible and reliable within the industry. Hedgeye Risk Management is not responsible for the validity or authenticity of the information upon which it has relied. TERMS OF USE This report is intended solely for the use of its recipient. Re-distribution or republication of this report and its contents are prohibited. For more detail please refer to the appropriate sections of the Hedgeye Services Agreement and the Terms of Use at www.hedgeye.com.
LEGAL
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
HEDGEYE ASSET ALLOCATION
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
0%
10%
20%
30%
40%
50%
60%
70%
80%
CASH U.S.EQUITIES
INT'LEQUITIES
COMMODITIES FOREIGNEXCHANGE
FIXED INCOME
65%
0% 0%
21%
9%
76%
HEDGEYE ASSET ALLOCATION
The maximum preferred exposure for cash is 100%. The maximum preferred exposure for each of the other asset classes is 33%.
1 2 3
USD
OIL
UST 10YR
USD After falling another -0.4% last week to year-to-date lows of -4.5%, the U.S. Dollar Index is signaling immediate-term oversold in my model for the first time in April (the 30-day correlation between USD and S&P 500 is -0.90).
OIL WTI was up +8% last week after falling -7% in the week prior. This will be as important to watch as anything U.S. Equity Market Beta this week; risk range is signaling a lower-high of $39.99/barrel as Oil Volatility (OVX) signals a higher-low of 43.14.
UST 10YR A whole lot of nothing happening from a sovereign bond market volatility perspective (Long Bond Bulls should enjoy that as it signals growth has not “bottomed”). The UST 10YR Yield was -5 basis points last week and down -55 basis points year-to-date at 1.72%.
U.S. MACRO & HOUSING
CHRISTIAN DRAKE
SUPPLY SIDE ECONOMICS
HEDGEYE 11
• Low Rates
• Negative/Low Equity
• Tighter Credit
• Home Price Spreads
• Demographics
• Investors
INVENTORY: THE WHY OF SUPPLY
HEDGEYE 12
INVENTORY: ON THE LOWS
DATA SOURCE: BLOOMBERG, NAR, HEDGEYE
HEDGEYE 13
SUPPLY: LONG-TERM LOWS
DATA SOURCE: BLOOMBERG, NAR
HEDGEYE 14
SUPPLY: RATE RETICENCE
DATA SOURCE: MBA, CENSUS BUREAU, CORELOGIC, REALTYTRAC, HEDGEYE
HEDGEYE 15
SUPPLY: EQUITY OVERHANG
DATA SOURCE: CORELOGIC
HEDGEYE 16
MCAI ↓: TRADE OR TREND? Meanwhile, mortgage credit availability, which had been on a long-term upswing, recently negatively inflected.
DATA SOURCE: MBA,
HEDGEYE 17
SUPPLY: CREDIT CONSTRAINTS Meanwhile, mortgage credit availability, which had been on a long-term upswing, recently negatively inflected.
DATA SOURCE: MBA,
HEDGEYE 18
SUPPLY: CREDIT CONSTRAINTS This is simply a longer-term snapshot of credit availability for some added perspective.
DATA SOURCE: MBA
HEDGEYE 19
SUPPLY: CREDIT CONSTRAINTS Standards remain well below long-term equilibrium.
DATA SOURCE: URBAN INSTITUTE
HEDGEYE 20
SUPPLY: PREMIUM SPREADS
DATA SOURCE: BLOOMBERG, HEDGEYE
HEDGEYE 21
BOOMERS AGING IN PLACE
BOOMERS’ FAMILIES ARE GETTING SMALLER…
BUT THE SHARE LIVING IN SINGLE-FAMILY DETACHED
HOMES IS UNCHANGED
HEDGEYE 22
BOOMERS AGING IN PLACE
SOURCE: AARP (2012)
HEDGEYE 23
GEN X IN TROUBLE
Gen X
HEDGEYE 24
GEN X IN TROUBLE
DATA SOURCE: CENSUS BUREAU
HEDGEYE 25
RENTAL INVENTORY STILL NEGATIVE
DATA SOURCE: FREDDIE MAC
HEDGEYE 26
OLD FORMAT = $800/SQUARE FT NEW FORMAT = $1,300 SQ FT
GDP: RESIDUAL SEASONALITY
1Q RESIDUAL SEASONALITY NEGATIVE IN 3 OF LAST 5 YEARS
DATA SOURCE: BLOOMBERG
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
HEDGEYE MACRO PROCESS: RATE OF CHANGE
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
HEDGEYE SECTOR PERFORMANCE
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
HEDGEYE SECTOR RELATIVE PERFORMANCE
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
HEDGEYE STYLE FACTOR PERFORMANCE
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
HEDGEYE RATES & SPREADS
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
CFTC NON-COMMERCIAL NET LONG POSITIONING
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
MARKET SHARE VOLUME & TOTAL VALUE TRADED
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
BACK TO GROWTH SLOWING ALLOCATION
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
1.60
1.80
2.00
2.20
2.40
2.60
UST 10YR U.S. 10-YEAR YIELD
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
0
200,000,000
400,000,000
600,000,000
800,000,000
1,000,000,000
1,200,000,000
1,400,000,000
1,600,000,000
1,800,000,000
2,000,000,000
1,700
1,750
1,800
1,850
1,900
1,950
2,000
2,050
2,100
PR
ICE
SPX S&P 500 INDEX V
OL
UM
E
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
1,700
1,800
1,900
2,000
2,100
SPX S&P 500 INDEX
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
900
940
980
1,020
1,060
1,100
1,140
1,180
1,220
RTY RUSSELL 2000 INDEX
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
RTY RUSSELL 2000 INDEX P
RIC
E
VO
LU
ME
0
100,000,000
200,000,000
300,000,000
400,000,000
500,000,000
600,000,000
700,000,000
800,000,000
900,000,000
900
940
980
1,020
1,060
1,100
1,140
1,180
1,220
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
10
15
20
25
30
35
VIX VOLATILITY INDEX
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
25
30
35
40
45
50
55
CLA WTI CRUDE OIL
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
25
30
35
40
45
50
55
PR
ICE
CLA WTI CRUDE OIL V
OL
UM
E
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
90
92
94
96
98
100
102
DXY U.S. DOLLAR INDEX SPOT
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
CRY TR/CC CRB COMMODITY INDEX
150
160
170
180
190
200
210
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
0
50,000
100,000
150,000
200,000
250,000
980
1,030
1,080
1,130
1,180
1,230
1,280
1,330
GOLD GOLD SPOT P
RIC
E V
OL
UM
E
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
980
1,030
1,080
1,130
1,180
1,230
1,280
1,330
GOLD GOLD SPOT
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
HGA COPPER
175
185
195
205
215
225
235
245
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
1.40
1.60
1.80
2.00
2.20
2.40
2.60
2.80 NGA NATURAL GAS SPOT
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
1.04
1.06
1.08
1.10
1.12
1.14
1.16
EURO EURO SPOT
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
106
108
110
112
114
116
118
120
122
124 YEN JAPANESE YEN SPOT
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
13,000
14,500
16,000
17,500
19,000
20,500
22,000
NKY NIKKEI-225 STOCK AVERAGE
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
0
500,000,000
1,000,000,000
1,500,000,000
2,000,000,000
2,500,000,000
3,000,000,000
3,500,000,000
4,000,000,000
13,000
14,500
16,000
17,500
19,000
20,500
22,000
VO
LU
ME
NKY NIKKEI-225 STOCK AVERAGE P
RIC
E
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
0
5,000,000,000
10,000,000,000
15,000,000,000
20,000,000,000
25,000,000,000
30,000,000,000
35,000,000,000
40,000,000,000
2,500
3,000
3,500
4,000
4,500
SHCOMP SHANGHAI COMPOSITE INDEX V
OL
UM
E
PR
ICE
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
2,500
2,750
3,000
3,250
3,500
3,750
4,000
SHCOMP SHANGHAI COMPOSITE INDEX
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
IBEX 35 SPANISH CONTINUOUS MARKET
7,000
8,000
9,000
10,000
11,000
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
8,000
8,500
9,000
9,500
10,000
10,500
11,000
11,500
12,000
DAX GERMAN STOCK INDEX
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
0
50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
8,000
8,500
9,000
9,500
10,000
10,500
11,000
11,500
12,000
VO
LU
ME
DAX GERMAN STOCK INDEX P
RIC
E
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
UST 2YR U.S. GENERIC GOVT 2-YEAR YIELD
0.40
0.50
0.60
0.70
0.80
0.90
1.00
1.10
1.20
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
HSI HONG KONG HANG SENG INDEX
17,000
18,000
19,000
20,000
21,000
22,000
23,000
24,000
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
SENSEX BSE INDIAN SENSEX INDEX
22,000
23,000
24,000
25,000
26,000
27,000
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
1,725
1,825
1,925
2,025
2,125
KOSPI SOUTH KOREA KOSPI INDEX
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
5,500
5,700
5,900
6,100
6,300
6,500
6,700
UKX UK FTSE 100 INDEX
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
350
400
450
500
550
600
650
700
750
800
ASE ATHENS STOCK EXCHANGE GENERAL
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
600
650
700
750
800
850
900
950
RTS RUSSIAN RTS INDEX
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
8,000
8,500
9,000
9,500
10,000
10,500
11,000
11,500
12,000
DAX GERMAN STOCK INDEX
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
CAC FRANCE CAC 40 INDEX
3,500
3,700
3,900
4,100
4,300
4,500
4,700
4,900
5,100
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
14,500
16,000
17,500
19,000
20,500
22,000
23,500
FTSE MIB BORSA ITALIANA INDEX
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
1.36
1.40
1.44
1.48
1.52
1.56
1.60
POUND BRITISH POUND SPOT
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
4,250
4,500
4,750
5,000
5,250
5,500
5,750
PSI 20 PORTUGAL PSI 20 INDEX
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
AS51 AUSTRALIA’S S&P/ASX 200 INDEX
4,600
4,800
5,000
5,200
5,400
5,600
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
RUB RUSSIAN RUBLE SPOT
50
55
60
65
70
75
80
85
90
3MO
4/11/2014 THE MACRO SHOW
April 11, 2016
XOP OIL & GAS ETF
20
25
30
35
40
45
50
3YR
4/11/2014 THE MACRO SHOW
25
30
35
40
45
50
55 COA BRENT CRUDE OIL FUTURE
April 11, 2016