Flattening The Curve...

For those investors looking to borrow short and lend long, this is one of the most negative 3 week charts that has developed in American Capitalism.

This morning’s narrowing between 10s and 2s has resulted in a +126 basis point spread. This is well off the higher levels that we saw in both late October and early November when I started to get more constructive on US Equities (see chart). In “The New Reality” of American Capitalism, we need to be able to see an expedited wealth transfer from the levered long to the liquid long investor. Steepening the curve is the best way to ensure that process takes hold. It’s the only way to incentivize those with real savings to lend.

It’s not only 2 month Treasury yields that increased on a week over week basis last week (from 0.74% to 0.88%), short rates like 3 month Treasuries went from 0.00 (ZERO) to +0.06%. I have long maintained the most basic of arithmetic thesis’ that once you cut to zero, the only way to move next is UP. Now, albeit slowly, that’s starting to happen… and this development should be monitored very closely on a day to day basis. This is why the XLF (Financials) continue to underperform.

Another French Revolution?

"Don't be complacent," writes Hedgeye Managing Director Neil Howe. "Tectonic shifts are underway in France. Is there the prospect of the new Sixth Republic? C'est vraiment possible."

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Cartoon of the Day: The Trend is Your Friend

"All of the key trending macro data suggests the U.S. economy is accelerating," Hedgeye CEO Keith McCullough says.

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A Sneak Peek At Hedgeye's 2017 GDP Estimates

Here's an inside look at our GDP estimates versus Wall Street consensus.

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Cartoon of the Day: Green Thumb

So far, 64 of 498 companies in the S&P 500 have reported aggregate sales and earnings growth of 6.1% and 16.8% respectively.

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Europe's Battles Against Apple, Google, Innovation & Jobs

"“I am very concerned the E.U. maintains a battle against the American giants while doing everything possible to sustain so-called national champions," writes economist Daniel Lacalle. "Attacking innovation doesn’t create jobs.”

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An Open Letter to Pandora Management...

"Please stop leaking information to the press," writes Hedgeye Internet & Media analyst Hesham Shaaban. "You are getting in your own way, and blowing up your shareholders in the process."

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A 'Toxic Cocktail' Brewing for A Best Idea Short

The first quarter earnings pre-announcement today is not the end of the story for Mednax (MD). Rising labor costs and slowing volume is a toxic cocktail...

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Energy Stocks: Time to Buy? Here's What You Need to Know

If you're heavily-invested in Energy stocks it's been a heck of a year. Energy is the worst-performing sector in the S&P 500 year-to-date and value investors are now hunting for bargains in the oil patch. Before you buy, here's what you need to know.

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McCullough: ‘My 1-Minute Summary of My Institutional Meetings in NYC Yesterday’

What are even some of the smartest investors in the world missing right now?

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Cartoon of the Day: Political Portfolio Positioning

Leave your politics out of your portfolio.

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Jim Rickards Answers the Hedgeye 21

Bestselling author Jim Rickards says if he could be any animal he’d be a T-Rex. He also loves bonds and hates equities. Check out all of his answers to the Hedgeye 21.

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Amazon's New 'Big Idea': Ignore It At Your Own Peril

"We all see another ‘big idea’ out of Amazon (or the press making one up) just about every day," writes Retail Sector Head Brian McGough. "But whatever you do, DON’T ignore this one!"

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