“What keeps me going is goals.”
Key takeaways
- Mathematical Fact: US Retail Sales #slowed (again year-over-year) during #Quad4 in Q3 of 2023.
- Our Fed Front-Runner (UST 2yr Yield) made a #Quad4 in Q3 Cycle Low of 3.56% yesterday and has since bounced +6 basis points to 3.62% with a Risk Range™ of 3.51-3.80%
- Will PE Powell bend a knee to Wall Street today or maintain some level of integrity?
The big picture
What keeps me going is goals too. While my personal wealth goal is #P3 (preserve & protect #ThePile) so that I can continue to compound long-term returns, my firm’s goal is to change the world.
While, in principle, the Old Wall hasn’t changed much since I set out on this Transparency & Accountability march 16 years ago, a lot has changed in terms of their short-termism. NEVER has Wall Street and its conflict-of-interest media been so short-term. Today’s mania surrounding a Fed Rate Cut event is a glaring example of that.
But, like the latest “CPI” or cool-Tech-guy-in-black-leather NVDA presentation, this too shall pass. Tomorrow my personal and professional goals won’t change. As John Doerr reminded the founders of Google way back when, “ideas are easy; execution is everything.” -Measure What Matters, pg 245
Macro grind
BREAKING: Rates Up After Better Than Expected US Retail Sales -CNBC
A) That “explanation” isn’t true
B) Can you believe the Old Wall’s media still doesn’t do ROC Math?
After more than a decade of losing share to Hedgeye, you’d think that someone over there would learn what The ROC (Rate of Change) is?
Mathematical Fact: US Retail Sales #slowed (again year-over-year) during #Quad4 in Q3 of 2023.
Rates were up because they went down.
Yes, this will be earth-shattering news to some Old Wall astronomers and chartists, but the #1 catalyst for something to go up is that it went down towards the LRR (low-end of the @Hedgeye Risk Range™ Signal):
A) Our Fed Front-Runner (UST 2yr Yield) made a #Quad4 in Q3 Cycle Low of 3.56% yesterday
B) UST 2yr Yield has since bounced +6 basis points to 3.62% with a Risk Range™ of 3.51-3.80%
Imagine waking up every market day knowing everything about markets and NOT having a Risk Range™ Signal or ROC Models? I can’t.
Why have US Treasury Bond Yields been making lower-lows and lower-highs since July?
A) #Quad4 economic data means the ROC of both GROWTH and INFLATION has been #slowing
B) Now, even the Fed “sees” it, and Wall Street sees that the Fed doesn’t really know what to do
So, the Street-Smart side of Wall Street keeps pushing The Fed to do what they want/need the Fed to do. And now all markets must deal with the uncertainty associated with that.
Will PE Powell bend a knee to Wall Street today or maintain some level of integrity?
A: I don’t know. I’ll call this behavioral analysis a coin toss.
While I’m always uncertain about what my next Asset Allocation decisions are going to be, I am 100% certain about my decision-making #process.
As a young hockey player learning in Thunder Bay, this lesson came from John McCullough: “read and react.”
As a young man on Wall Street, I learned Thoreau’s lesson: “its not what you look at (on CNBC), it’s what you see.” When I look at what I care most about in #P3 terms (my Top 10 positions ex-High Yielding Cash):
- I’m hedged against Old Wall consensus with my #1 position being Anti-Beta (BTAL) today
- I’m still riding the Steepener (IVOL) position we put on at the beginning of #Quad4 in Q3
- I’m long of British Pounds (FXB) because the BOE won’t be bending a knee to Wall Street on Thursday
- I’m still long of #Quad4 Staples (XLP) and bought-SOME more on sale yesterday
- I’m less long of Extended Duration (EDV) Bonds after selling-SOME of those on green into the Fed Cut
- I’m long of the Euro in FXE terms, again because even the ECB is less dovish than the Fed at this point
- I’m still long of Gold, but less so, after booking-SOME gains at the all-time highs
- I’m still riding the Utes train (XLU), but have also sold-SOME of those on green recently
- I’m still long of The TUA (Short-term Treasury Futures), but same drill (sold-SOME on green)
- I’m still long of India (INDA) and have been since adding this Full Cycle Investment in June of 2023
Yep, I’m still here showing you every buy/sell decision. Every. Day.
And I’ll keep on keeping on with my growing team’s Transparency & Accountability goals. No one else does it openly and publicly like we do. And we do that daily. See our new Portfolio Solutions product for details.
No, it doesn’t mean that what we do only makes money. We make plenty of mistakes. But one of them isn’t compromising our principles to make another devalued US Dollar.
Our levels
Immediate-term Risk Range™ Signal with @Hedgeye TREND signal in brackets
UST 10yr Yield 3.59-3.79% (bearish)
Investment Grade (LQD) 112-114 (bullish)
SPX 5391-5700 (bullish)
NASDAQ 16,579-17,917 (bullish)
RUT 2055-2225 (bullish)
Shanghai Comp 2675-2801 (bearish)
Nikkei 35,160-37,333 (bearish)
BSE Sensex (India) 81,675-83,699 (bullish)
DAX 18,152-18,846 (bullish)
VIX 15.18-23.03 (bullish)
USD 100.02-101.66 (bearish)
Oil (WTI) 65.59-71.16 (bearish)
Nat Gas 2.15-2.42 (bullish)
Gold 2524-2630 (bullish)
Copper 4.02-4.32 (bearish)
Silver (SLV) 28.59-31.91 (bullish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
