[COMPLIMENTARY] Top 3 Things | USD / Rates / Russell

11/03/22 07:49AM EDT

Editor's Note: Below is a complimentary "Top 3 Things" note from Hedgeye CEO Keith McCullough. This note goes out to Macro Show subscribers every morning before the 9am show. (Institutional investors receive it between 6:30-7am. To get on Keith's institutional distribution list email .) Today's Early Look will be sent separately. 

Big time pivot, it was… I guess Macro Tourists just had the direction a little off…

  1. USD – Strong Dollar in #Quad4 remains (don’t forget we’ve only hit the 1st of 4 straight #Quad4s for company P&Ls = ROC of REVS and EPS slowing, at the same time) and the Pound (GBP/USD -1.1%) is getting #pounded this morning, as the BOE tightens into a nasty UK slowdown. Chinese Yuan coming unhinged here post a Recessionary Services PMI of 48.4 (and they make up the numbers!)
  2. RATES – PIVOT HIGHER = NEW CYCLE HIGH FOR THE UST 2YR YIELD – yes I’m going all CAPS on you this morning because the BOND MARKET (and FX) market was signaling the opposite of the uniquely American US stock market FOMO narrative – UST 2yr = 4.72% this morning crushes the Yield Curve to -52 on 10s/2s. Powell is hell bent on crashing this plane into a #Quad4 Recession
  3. RUSSELL – I had hundreds of client/subscriber questions on “why, why, why” the Russell was up. Then it went straight back down -3.4% on the day, taking its #Quad4 Crash to -26.7% from its all-time bubble high of NOV 2021 (in #Quad2). Positioning dynamics mattered, big time, with many L/S Hedge Funds seeing their LONG books implode (AMZN) and forced to de-gross (cover smaller cap shorts)

Immediate-term @Hedgeye Risk Ranges: SP500 = 3; UST 10yr Yield = 3.93-4.31%

KM   

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