The guest commentary below was written by Jesse Felder of The Felder Report. This piece does not necessarily reflect the opinion of Hedgeye.
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“By far the best economic predictor I’ve ever met is the inside of the stock market.” – Stan Druckenmiller |
If you have been watching the “inside of the stock market” over the past six months or so, you’ve been able to see the increasingly popular “soft landing” narrative regarding the direction of the economy play out in prices. Specifically, I’m referring to the the relative performance of things like transportation stocks, materials, retail and small caps. After leading the stock market lower through the first half of last year, they began to show signs of life from that point forward, lending credence to the “soft landing” narrative.
Over the past month or two, however, they have taken another sharp dive, implying the “soft landing” scenario may not be as likely to materialize as stock market bulls may hope. In fact, their recent weakness strongly suggests you “better be careful and keep your eyes open” because we may be headed for a hard landing after all. And that’s a scenario that analysts and stock prices have not yet begun to discount.
Find these charts and many more like them in Jesse's free public chart list at StockCharts.com.
EDITOR'S NOTE
This is a Hedgeye Guest Contributor piece written by Jesse Felder and reposted from The Felder Report blog. Felder has been managing money for over 20 years. He began his professional career at Bear, Stearns & Co. and later co-founded a multi-billion-dollar hedge fund firm headquartered in Santa Monica, California. Today he lives in Bend, Oregon, and publishes The Felder Report. This piece does not necessarily reflect the opinion of Hedgeye.
