“It was like, whoa, this is different!”
-Tim Caffey
That wasn’t someone who was talking about my Mama & Papa Bear segment (with Mama Bear, Steph Pomboy) at the Hedgeye Investing Summit yesterday. But it sure could have been!
It was a quote from a player who played Safety for Nick Saban when he took over the team in Toledo in 1989. “This is going to be a different culture from what we just went through”, he said.
Back in 1989, the best Coach in College Football history was 38 years old. His #process was nowhere near where it is today. Neither was mine when I started Hedgeye at 33 years old in 2008. It’s a culture of learning and getting better.
Back to the Global Macro Grind…
Mama Bear and I have been around the block for both this cycle and the past 2 recessions. Steph started Macro Mavens during the 2001-2002 US Recession. Papa Bear started Hedgeye during the 2008 Recession.
If you have time to watch our Real Conversation yesterday (all 3 of yesterday’s segments of our online Summit are here), you might come away with the following takeaways:
- The data is the data (it’s now slowing, across the board from GDP to Inflation to Profits)
- The Cycle is the cycle (and it’s cycling into the late Cycle parts: Credit and Employment)
- The Mama Bear was cool, calm, and classy
As you all know, Papa Bear here isn’t classy, per se. If you ask my kids, I’m kind of a chubby and cuddly Old Bear. And, unlike some of the Perma Bears, I smile a lot. Steph and I had a blast making fun of the Perma Bull Talking Points too!
Another big takeaway you might have from our conversation was the pace. To play The Game at the pace of a Pomboy, you have to A) have a LOT of reps and B) measured and mapped LOTs of data across multiple cycles.
At one point when Steph was lighting up the HedgeyeTV screen with her smile, she acknowledged that it was “a lot tougher when I was younger making this recession call because I wasn’t sure… maybe I was wrong.”
I smiled while listening to Mama Bear’s honesty about this job. While it’s not “easy” at this stage of our careers, it’s easier to know what you’re looking at when you’ve seen it in 2 particularly important Cycle Times.
“So Steph, every Cycle is different but what do you see here vs. the other two times (2001 and 2008)?”
Yes. Papa Bear is teasing you again. I’m not going to recap what she said next. You can watch the replay instead of wasting your precious life and cycle time listening to some bag-holder tell you why AI is going to trump The Cycle.
“The one thing you recognized is that you were going to move at his pace… and his pace was a Championship pace. He was trying to toughen you up mentally and physically.”
-Saban’s Linebacker in Toledo, Matt Eberflus
So let’s pick up the pace here during Game 74 of the 2023 Season where the following #CTD (Cycle-to-date) things are actually happening out there on your screens:
- EARNINGS SEASON – 9 of the NASDAQ’s 100 have reported an aggregate y/y EPS Crash of -38.3%
- OIL – post the OPEC fail @Hedgeye TREND resistance, WTI has crashed -36% from its Inflation Cycle Peak
- TSLA – is cutting prices again with INVENTORY at Peak Cycle Highs and Demand at Cycle Lows
What’s down -36-38% from Cycle Peaks amongst Perma Bull friends? How about TSLA? Isn’t that a Cyclical Industrial company that sells cars and stock? It’s down -55% from its #Quad2 Cycle Peak.
In case you missed it, I still have 3 words for anyone who wants to tweet at me about “Year-to-date”: I don’t care. All I’ve ever cared about is where my pile of hard-earned capital is Cycle-to-date.
And yes, our Industrials analyst Jay Van Sciver remains Bearish on TSLA inasmuch as "Freebird" (Communications analyst Andrew Freedman) is on NFLX. On that #BubbleCap score, it’s going to be a big market day. Why?
- Both TSLA and NFLX are signaling lower-highs within my Bearish @Hedgeye TREND signals
- Unlike TSLA and NFLX who have reported reality, we’re getting ready for Papa Bull, AAPL
- Did you know that AAPL is now a record 7.1% of the beloved SPY?
Yep, prior record Cycle High components of the SP500 were MSFT in 1999 at around 5% and XOM (Exxon) at around the same 5% when Oil was at $147 barrel in Q3 of 2008.
Don’t you go calling Mama Bear on me to ask her what happened next. Some of you are old bulls. Some of you are young bears, but you can all A) smile and B) become empirical students of Cycles too!
Immediate-term Risk Range™ Signal with @Hedgeye TREND signal in brackets
UST 10yr Yield 3.22-3.64% (bearish)
UST 2yr Yield 3.77-4.28% (bullish)
High Yield (HYG) 73.99-75.48 (bearish)
SPX 4012-4171 (bearish)
NASDAQ 11,634-12,224 (bearish)
RUT 1 (bearish)
Tech (XLK) 146-151 (bearish)
Gold Miners (GDX) 32.70-36.00 (bullish)
Defense (ITA) 114-118 (bullish)
Shanghai Comp 3 (bullish)
VIX 16.37-21.82 (bullish)
USD 100.71-102.45 (bullish)
Oil (WTI) 77.84-83.04 (bearish)
Gold 1 (bullish)
Copper 3.93-4.13 (bearish)
Silver 23.98-26.11 (bullish)
MSFT 278-293 (bearish)
AAPL 159-168 (bullish)
NFLX 321-348 (bearish)
TSLA 160-192 (bearish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
