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FLASHBACK | A Look at How Our Q3 Macro Themes Played Out - 08.11.2023 economic school of sharks cartoon

As always, we entered the quarter with three overarching themes that set the tone for our macro calls and portfolio positioning. Now that we're in the final week of Q3, let's take a look at how our Macro Themes for the quarter graded out.

While it's nice to take a look back, what's far more important is planning for the months ahead. Keith McCullough and our Macro team are putting the finishing touches on an extensive, 180+ slide deck for our Q4 Macro Themes presentation. Macro Pro and Institutional subscribers will have access to McCullough's live, hourlong webcast at 11:00am ET Thursday, September 28.

For access to Thursday's Macro Themes presentation and slide deck, and to hear McCullough's in-depth forecast of the quarter ahead, email support@hedgeye.com.

We believe we're in for a massive growth slowdown in Q4. The themes McCullough shares in this presentation will be critical in preparing for what could be a brutal fall. For an example of Hedgeye's track record, here's a look back at what we saw coming in Q3, along with recent commentary illustrating how things played out:

Quad4 US Profit Recession & Credit Event, Reiterated

Our outlook entering Q3: We’re now slouching into month 20 of global/local macro deceleration, and the slope of the macro lines that matter remains negative. The Manufacturing economy is contractionary, Services is in discrete deceleration, credit availability is in conspicuous contraction, commodities & industrial metals are making lower lows.

China, Europe, and the #Quad4 Industrial Recession

FLASHBACK | A Look at How Our Q3 Macro Themes Played Out - 08.16.2023 Chinese economic River Styx cartoon

Our outlook entering Q3: This time is different – the Chinese economic engine won’t be bailing out global growth as it did in the Post-GFC period. The promise of a great Chinese reopening has underdelivered, and the developed market consumption shift from goods to services has additionally weighed on Chinese manufacturing activity. Meanwhile, the European continent, having been spared from an energy crisis this past winter, is increasingly under the weight of elevated inflation, torpid manufacturing activity, tightening credit conditions, and renewed central bank hawkishness.

Hong Kong (EWH) added to ETF Pro as a Short on July 3. Performance since: 12.3%

Germany (EWG) added to ETF Pro as a Short on August 1. Performance since: 10.5%

France (EWQ) added to ETF Pro as a Short on August 1. Performance since9.2%

Long Japan, India, and South Korea

FLASHBACK | A Look at How Our Q3 Macro Themes Played Out - 08.21.2023 China economic data cartoon  1

Our outlook entering Q3: With growth expected to land in the top-half of the Quad Matrix (accelerating) over the next two quarters for each of these three geographies and with the signal incrementally confirming this trajectory, we are favoring foreign equity exposures in Japan, India, and South Korea. Japan is enjoying comparatively moderate and decelerating inflation while monetary policy remains accommodative. India also enjoys a comparatively superior fundamental setup with buoyant domestic demand fueled by government spending, moderating commodity prices, and strong credit growth.

India (INDA) added to ETF Pro as a Long on June 12. Performance since5.4%

Japan Value (EWJV) added to ETF Pro as a Long on May 30. Performance since10.9%

Japan (EWJ) added to ETF Pro as a Long on April 26. Performance since4.6%

Put yourself in position to profit in the quarter ahead. Email support@hedgeye.com for access to Thursday's Macro Themes presentation at 11am ET Thursday, September 28.

Keith McCullough will walk through, via some 180+ slides, the risks and opportunities ahead. This presentation is available exclusively to our Institutional and “Macro Pro” subscribers.