• The call plus


    The Call @ Hedgeye Plus

    Our favorite, high-conviction stock ideas and CEO Keith McCullough’s Macro overlay. Exclusively on Hedgeye TV.


In markets, and in life, there are always unintended consequences born out of aggressive actions. The politicized US Federal Reserve has certainly proven this since Clinton/Greenspan created the modern world of finance’s first Fed-watching mania. The Fed’s decision to cut to a “targeted range of ZERO to 0.25%” is the final chapter in a world that has come to be managed reactively, rather than proactively.

Clearly, today’s political pressures have mounted on Ben Bernanke to the point of no return. He is officially dropping US interest rates to ZERO. The best things in life, at least in the immediate term, are those that come for FREE. “Heli-Ben” flies again!

The unintended consequences will be dominated by the realities of our latest Investment Theme – “Re-Flation” – and there is no better chart that reflects the prospects for that “Re-flation” than the one below. Bah Bye US Dollar - hello asset class appreciation. While no one can truly believe that he has cut rates below those that are currently in place in Japan, guess what? He just did – believe it!

Never mind the long term implications – those don’t matter right here and now. This is very positive for the US stock market in the immediate term. My immediate term “Trade” target for the SP500 is 916. Next level of resistance in my model after that is 934.

Keith McCullough
Research Edge, LLC