The U.S. economy isn’t “picking up steam,” as some Wall Street bulls proclaim, Hedgeye CEO Keith McCullough says. Despite many investors away from their screens (during this low volume, holiday shortened week), the bearish ISM report released on Monday should not go unnoticed.
“Employment not only sliced through the particularly important level of 50, which says you’re in contraction, but it did it like a hot knife through butter,” explains Hedgeye’s CEO in this clip from The Macro Show. “That’s a huge deceleration, and don’t forget we have a jobs report pending on Friday. This is where people who don’t understand the manifestation of recessions get caught offside.”
Meanwhile, it’s early but the 16 S&P 500 companies to report Q2 earnings thus far are down -21% year-over-year.
“That’s not a recession – that would be unfair – that’s a depression in earnings,” McCullough adds. “That’s why they need to believe in AI or something that’s a story, because the gravitational story is that the economy continues to slow.”
