Below is a chart and brief excerpt from today's Early Look written by Hedgeye CEO Keith McCullough.
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When inflation is #accelerating (to new Cycle Highs no less) and Real-Growth (nominal growth minus inflation) is slowing, that’s called #Quad3 Stagflation. No, it’s not called “mid cycle” or “inventories aren’t as low as consensus thinks.” It’s called QUAD THREE. And we don’t have to ramble on qualitatively about anything else other than what the numbers are doing. Inventories, by the way, are coming off their Cycle Lows and in what we call Micro #Quad2 (i.e. #accelerating). As I reviewed in our recent Mid Quarter Macro Update, inventories accelerating could be the catalyst for #Quad2 in Q4. As you can see in today’s Chart of The Day (slide 31 of the Macro deck): A) Manufacturing Inventory/Sales Ratio is on the left side of the page… and Again, I don’t care what people think they think about consensus on that time-series. It’s plainly obvious to anyone who is trying to play The Macro Game at the highest level. And, yes, I am very confident I know what that says in ROC terms. |
