Hedgeye CEO Keith McCullough recently joined Kai Hoffman’s Soar Financially podcast to break down the most powerful forces shaping markets right now—identifying key trends to stay ahead of, risk manage, and profit from.
Here are five key takeaways from the conversation:
1. Inflation Is Back, and It’s Not Going Away Anytime Soon
|
"Inflation bottomed in September 2023 at 2.4%. Our model had it re-accelerating, and now it’s at 3% and rising. The Fed doesn’t get to decide where inflation goes—the data does." |
Inflation isn’t dead—it’s staging a comeback. Wall Street was obsessed with the Fed’s 2% target, but Hedgeye spotted the re-acceleration early.
Here’s what’s fueling the rise:
- Inflation’s rise is being driven by commodities, wage growth, and supply chain shifts.
- The Fed is trapped: Cutting rates too soon would stoke inflation, while keeping them higher for longer risks economic slowdown.
- Inflation isn’t a one-and-done move. Position accordingly.
2. Gold Is Breaking Out—and the Dollar Is Breaking Down
|
" The inverse correlation on a 30-day basis between the US dollar and gold is 0.8. That’s not as good as it gets, but pretty damn close." |
Gold’s breakout isn’t just a Fed pivot story. It’s about global de-dollarization and Uncle Sam’s balance sheet mess.
- Gold’s rally is fueled by a weakening dollar and the end of rising bond yields.
- The U.S. government has 8,000 tons of gold—worth trillions—and could monetize it to offset debt concerns.
- If the trend holds, gold’s run may have plenty left in the tank.
3. The Bond Market Is Signaling a Major Shift—Watch Yields Closely
Bond yields are at a turning point. After months of volatility, they’ve settled into a tight range—but not for long. The next break will likely drive the market’s next big move.
- A steepening yield curve signals economic acceleration, contradicting recession fears and favoring pro-growth assets.
- Bond volatility has collapsed, meaning markets are adjusting to this new reality of sustained inflation and stronger growth.
- The next yield move will be critical—rising yields pressure rate-sensitive assets, while falling yields favor bonds and defensives.
4. AI, Robotics & Space: Ride the Wave, Avoid the Crash
|
"When [risk assets are booming], people will believe in anything. The key is to follow the money [and have a risk management process to protect yours]." |
Money is flooding into AI, robotics, and space stocks—exactly the kind of speculative assets that have historically thrived in Quad 2, Hedgeye’s term for an economic environment where growth and inflation both accelerate at the same time.
Hedgeye forecasts Quad 2 returning in March and April, setting up a major opportunity.
- AI is no longer just about Nvidia. Robotics and space stocks are gaining momentum.
- Quad 2 has fueled some of the market’s biggest run-ups. But when conditions shift, these names can unravel just as fast.
- Risk management is everything. Ride the trend, but don’t get caught chasing overbought names.
Hedgeye’s ETF Pro Plus currently includes multiple ETF ideas designed to profit from the current tech wave. Subscribers will receive our CEO Keith McCullough’s trade alerts when his proven, data-driven trend signals indicate it’s time to sell and lock in gains.
Try ETF Pro Plus free for 30 days.
5. Top Trump Trades to Watch: Steel, Bitcoin, Financials
|
"Unlike last time, Trump has a real economic team now. If they launch a U.S. Sovereign Wealth Fund, gold and Bitcoin will rip." |
Trump 2024 isn’t just a political story—it’s already moving markets.
- Tariffs are back on the table—bullish for steel, bearish for autos.
- The U.S. government could officially add Bitcoin to its balance sheet.
- If policy shifts align, these sectors could take off.
Final Word: Don’t Trade on Feelings, Trade on a Data-Driven Process
Keith’s takeaway? Block out the noise. If you want to win, you need a data-driven, repeatable process.
Serious about mastering the market? Keith’s book distills 25+ years of battle-tested strategy into one playbook.
