“I like to call today’s enormous use of machines to amplify and expand our productive abilities machine labor.”
-Alex Epstein
I like to call today’s Global Macro market moves Global #Quad2 Inflation Accelerating. While Alex Epstein doesn’t do The Quads (yet), he’d get it. He also gets what “machine labor” (powered by fossil fuels) does for humanity.
While my portfolios are powered by getting The ROC (rate of change) right on GROWTH and INFLATION, humans all over the world have seen “energy use correlating with major increases in life expectancy and income.”
“Individuals in industrializing countries have used fossil-fueled machine labor to be productive enough to enjoy their first light bulb, their first refrigerator, their first decent-paying job, their first year with clean drinking water or a full stomach.” -Fossil Future, pg 25
Back to the Global Macro Grind…
If you have uniquely American friends who “invest” with how they “feel” about things like politics, I get it. I live in Connecticut, don’t forget.
If you want a Brazilian and a Canadian to help you apolitically save and make money being long of both Commodity and Energy Inflation in Global #Quad2, we’re your guys!
This morning I’m excited to announce that The Brazilian Energy Guy, Fernando Valle, will launch his Bullish Global Energy Sector coverage LIVE at 10AM. Please ping if you’d like access.
BREAKING: Hedgeye Reiterates Long XOM vs. Short TSLA
Sorry, CNBC types who weren’t “allowed” to get the breaking news that Bloomberg provided The People (that Hedgeye slapped a SELL on the pump & dumped Reddit IPO (RDDT) right at the top), won’t get our call on XOM vs. TSLA either.
But you will. And oh will you be Global Macro Aware again this morning. Our channel of content is crushing Old Wall’s.
How about Long Energy (XLE) crushing it yesterday?
A) After leading US Equity Sector Styles at +2.2% last week, Energy (XLE) inflated another +0.7%
B) On our @Hedgeye TREND duration (3-months or more), that puts XLE +13.4%
That puts Energy (XLE) in the #1 Sector pole position this morning above both Tech (XLK) and Communications (XLC)!
In addition to Energy Stocks (we’re also long AMLP which has been money), how is our new Portfolio Solutions Asset Allocation product positioned for Commodity and Energy Inflation?
- Long Commodities via our buddies at Goldman (GSG)
- Long of US Gasoline (UGA)
- Long of Dr. Copper (CPER)
- Long of Silver (SLV)
- Long of Bitcoin (IBIT)
Since their former Commodities guy (Jeff Currie) completely screwed up the timing of The Commodity Quads from the prior Cycle Peak in Inflation (Q4 of 2021), I don’t see why Goldman isn’t calling Hedgeye this morning.
You guys do brokering and dealing. We do The Quads and market timing. We’re happy to help (for fees).
Our immediate-term TRADE and TREND breakout signals on both the CRB Commodities Index and Oil (WTI) aren’t new this morning. We timed “The Turn” from bearish to bullish on both about as well as we could have.
Yes, a blind Canadian Squirrel can find an acorn once in a while, eh!
As a reminder on The Global Economic & Commodities Cycle:
A) The prior Global #Quad2 Cycle Peak was in Q4 of 2021
B) Oil peaked immediately thereafter in Q1 of 2022 at $124/barrel WTI
C) Oil crashed -45% to $67 by Q2 of 2023
And Currie got canned right after that in AUG of 2023…
Sorry bud, been there, done that. Good luck with working for the guys who canned me (Carlyle). Btw, you can tell PE Powell and his boys in Washington who probably “see no inflation” that you’re still bullish on inflation too!
What got oil to breakout to new Global #Quad2 Cycle Highs this morning (+1.6% to $85/barrel WTI)?
A) Macro Tourists and Fed Fans will probably say something like “oh that’s just Iran”
B) The Macro Aware will remind you that it’s The Cycle data with a geopolitical risk kicker
You see, the Macro Unaware don’t completely get that the Global Industrial & Manufacturing (and Energy) Recession bottomed in Q4 of 2023. Oil has been breaking out on demand (inflation) expectations since…
Psst (GS Prime guys and gals), tell your clients yesterday’s Chinese PMI and US ISM reports = Global #Quad2:
A) Headline = +2.5 pts to 50.3 = first expansionary print in 17-months and highest level since Sept 2022
B) Current Production = +6.2 pts to 54.6 = highest in 22-months
See how I did that? I mixed in some bold black blood of the earth on the Headline ISM #acceleration with some Goldman green on the FIRST expansionary print in 17 MONTHS.
Yep. Our Machine Labor of Full Investing Cycle analytics vs. political and/or perma biases, is just a #BetterWay.
Immediate-term Risk Range™ Signal with @Hedgeye TREND signal in brackets
UST 30yr Yield 4.34-4.50% (bullish)
UST 10yr Yield 4.17-4.35% (bullish)
UST 2yr Yield 4.50-4.74% (bullish)
High Yield (HYG) 76.87-77.51 (bullish)
SPX 5176-5284 (bullish)
NASDAQ 16,201-16,549 (bullish)
RUT 2062-2144 (bullish)
Tech (XLK) 206-211 (bullish)
Insurance (IAK) 113.87-117.75 (bullish)
VIX 12.44-13.99 (bearish)
USD 103.57-105.24 (bullish)
Oil (WTI) 80.63-85.76 (bullish)
Oil (Brent) 84.45-89.13 (bullish)
Gold 2184-2281 (bullish)
Copper 3.97-4.12 (bullish)
Silver (SLV) 24.70-25.98 (bullish)
Bitcoin 65,935-72,551 (bullish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
