Bearish Enough?





Bearish Enough? - client talking points




Our quarterly macro themes call takes place today at 11AM and will feature 49 slides in a 40 minute time span followed by anonymous Q&A. We are really fired up to talk about how growth is slowing and how commodity bubbles are bursting. Remember that our friend King Dollar is on a tear and is taking gold, copper and oil down with him.

If you’d like access to this morning’s Q3 Big Macro Themes call, please email



Everyone on the retail side and sellside will argue that if the Dow Jones Industrial Average is up year-to-date, then everything is groovy. Not the case. We are a mere 10 days into the third quarter of the year and check out how bad the three worst performing sectors of the S&P 500 have it:


1.    Industrials (XLI) = down -2.94%

2.    Basic Materials (XLB) = down -2.49%

3.    Energy (XLE) = down -2.12%



That’s a tough question to answer. People are still of the consensus that everything is going to work out in one way or another. The VIX is below 19, so how bad could it really be out there? We are at the start of a breakdown that is part of a bigger, macro-themed picture (see what we did there?) that must be understood. The consensus says the market is “bearish enough” -  we don’t buy that. We can always be more bearish.



Bearish Enough? - asset allocation


Bearish Enough? - assets July11



Bearish Enough? - top long ideas




The bulk of the bad news is on the table following disappointing F2012. Rebased F2013 estimates far more reasonable, and revenues should be supported by our expectations for rising physician utilization, and in the near-term, a flu season that is shaping up as a considerable tailwind.







SS volume accelerated in 1Q12 and employment remains a tailwind to both admissions & mix. We expect acuity to stabilize and births and outpatient utilization to accelerate out of 1Q12, while supply cost management continues as a margin driver and acquisition opportunities remain a source for upside.







The company continues to control its own destiny through investments in all the right areas. We think 30%+ top line and EPS growth for 5+ years. One of its failures, however, has been in penetrating markets outside the US. That will happen. But for now, its failure is a competitive advantage in the face of a strengthening dollar. We like it in sympathy with a LULU sell-off.







Bearish Enough? - three for the road



Tweet of the Day: “Microsoft store directly across from the Apple store. Guess which is full and which is empty?” -@Amaryllis         


Quote of the Day: “The most merciful thing in the world, I think, is the inability of the human mind to correlate all its contents.” –H.P. Lovecraft


Stat of the Day:  Hedge fund withdrawals jump to highest since 2009.




Neurofinance: The Psychology Behind When To Sell A Bull Market

"Most momentum investors stay invested too long, under-reacting and holding tight after truly bad news finally arrives to break the trend," writes MarketPsych's Richard Peterson.

read more

Energy Stocks: Time to Buy the Dip? | $XLE

What the heck is happening in the Energy sector (XLE)? Energy stocks have trailed the S&P 500 by a whopping 15% in 2017. Before you buy the dip, here's what you need to know.

read more

Cartoon of the Day: Hard-Headed Bears

How's this for "hard data"? So far, 107 of 497 S&P 500 companies have reported aggregate sales and earnings growth of 4.4% and 13.2% respectively.

read more

Premium insight

McCullough [Uncensored]: When People Say ‘Everyone is Bullish, That’s Bulls@#t’

“You wonder why the performance of the hedge fund indices is so horrendous,” says Hedgeye CEO Keith McCullough, “they’re all doing the same thing, after the market moves. You shouldn’t be paid for that.”

read more

SECTOR SPOTLIGHT Replay | Healthcare Analyst Tom Tobin Today at 2:30PM ET

Tune in to this edition of Sector Spotlight with Healthcare analyst Tom Tobin and Healthcare Policy analyst Emily Evans.

read more

Ouchy!! Wall Street Consensus Hit By Epic Short Squeeze

In the latest example of what not to do with your portfolio, we have Wall Street consensus positioning...

read more

Cartoon of the Day: Bulls Leading the People

Investors rejoiced as centrist Emmanuel Macron edged out far-right Marine Le Pen in France's election day voting. European equities were up as much as 4.7% on the news.

read more

McCullough: ‘This Crazy Stat Drives Stock Market Bears Nuts’

If you’re short the stock market today, and your boss asks why is the Nasdaq at an all-time high, here’s the only honest answer: So far, Nasdaq company earnings are up 46% year-over-year.

read more

Who's Right? The Stock Market or the Bond Market?

"As I see it, bonds look like they have further to fall, while stocks look tenuous at these levels," writes Peter Atwater, founder of Financial Insyghts.

read more

Poll of the Day: If You Could Have Lunch with One Fed Chair...

What do you think? Cast your vote. Let us know.

read more

Are Millennials Actually Lazy, Narcissists? An Interview with Neil Howe (Part 2)

An interview with Neil Howe on why Boomers and Xers get it all wrong.

read more

6 Charts: The French Election, Nasdaq All-Time Highs & An Earnings Scorecard

We've been telling investors for some time that global growth is picking up, get long stocks.

read more