Ex-Trump, Quad2 remains

Today’s Durable Goods rate of change acceleration takes that data series from awful to not bad. Directionally that might be very good; especially if the post #TrumpTrade data (this is OCT, pre-election) accelerates again in NOV = bullish for US and bond yields: 

  • Headline up a big +4.8% sequentially and flat at +2.1% YoY with the majority of subaggregates (Ex-Transports, Ex-Defense, Ex-Defense & Aircraft) improving but……
  • Non-Defense Aircraft – Private Sector Aircraft Orders (gray shaded box in table below) were the primary source of strength supporting the headline and the subaggregates.  Order growth was +94.1% MoM (+26% YoY).  Its not a huge component but it’s one of the most volatile underlying series and outsized moves do impact the headline.
  • Durables Ex-Defense & Aircraft  - which represents the closest proxy for actual household demand – was +0.3% sequentially, improving to +0.6% YoY and marking the 1st month of positive growth in the last 8 months

Capital Goods, meanwhile, remained mojo-less …. Up +0.4% MoM (against an easy comp) but still down -4% YoY = 12th consecutive month of negative growth and the 21st month of negative growth in the last 22.   

Elsewhere, the Univ. of Michigan consumer confidence reading accelerated from 91.6 to 93.8 with the expectations component registering its largest sequential increase in over 4 years. That’s not Ex-Trump. That’s a NOV reading. 

It’s not unusual for election year confidence readings to demonstrate an October slump-November rebound pattern but, notably, this morning’s gain represented the largest November increase since the 1992 election. 

Whether resurgent optimism proves a durable phenomenon or manifests in a sustained inflection in domestic consumerism remains to be seen but gross dismissal of step function increases in a reflexive macro/market environment is rarely prudent risk management.

Ex-Trump, Quad2 remains - Confidence Expectations

Ex-Trump, Quad2 remains - Election Year Confidence Expectations

Ex-Trump, Quad2 remains - Durable Goods LT

Ex-Trump, Quad2 remains - Capital Goods cycle

Ex-Trump, Quad2 remains - Durable Goods Table


DINERO CALIENTE: STRONG DOLLAR REDUX

EM ANGST: EM assets broadly have been under pressure post-election alongside rising rates and a stronger dollar. 

read more

CALL TODAY | OPEC Meeting Preview: Is This the Big One?

We hope you can join us for a call today (November 21st at 11:00 a.m.) with our Energy Policy Team to set investor expectations ahead of a highly anticipated OPEC meeting on November 30th in Vienna. Our Energy Policy Team consists of Former Secretary of Energy, Spencer Abraham and Senior Policy analyst Joe McMonigle, former Vice Chairman of the Paris-based International Energy Agency. Joe also served as Chief of Staff at the U.S. Department of Energy.

read more

The Dust Settles.... A Bit

Once a month or so we externally call-out the key shifts in a number of the behavioral indicators we track internally for market color. In the last look on 10/25 (A Refresh of Expectations), consensus shifted in a big way from August and post-labor day bullishness on U.S. equity markets broadly to much more cautious into the election (probably in part to hedging event risk). At that point (10/25) the Treasury Bond Volatility index (MOVE) was pinned at a low not visited since 2014 (against high-yield and junk at a 2016 high), and the market’s price for insurance against an increase in equity volatility was at a large premium (relative skew and implied volatility against realized volatility over multiple durations).

read more

Join Hedgeye For Holiday Cocktails & Appetizers

'Tis the Season…. We hope you can join us at Zengo (622 3rd Avenue at 40th Street – on the 2nd floor of the restaurant) on Wednesday December 7th, from 5-9pm to celebrate the season with libations and appetizers and thank you for your continued support!

read more

CALL INVITE | OPEC Meeting Preview: Is This the Big One?

On Monday, November 21st at 11:00 a.m. we’ll host a call with Hedgeye’s Energy Policy Team to set investor expectations ahead of a highly anticipated OPEC meeting on November 30th in Vienna. Our Energy Policy Team consists of Former Secretary of Energy, Spencer Abraham and Senior Policy analyst Joe McMonigle, former Vice Chairman of the Paris-based International Energy Agency. Joe also served as Chief of Staff at the U.S. Department of Energy.

read more

EVENT | OPEC Meeting Preview

Monday, November 21st at 11:00AM ET

read more