Eye On Australia: Is Hope All That Remains?

EYE ON AUSTRALIA: RATE CUT
At a 45 year low with more room to go, will it be enough?

As forecast by most, the Reserve Bank of Australia lowered its benchmark cash rate by 100 basis points today. At 3.25%, Aussi rates are at a 45 year low, and now they can only hope that easing credit combined with the governments $27 Billion ($42B AUS) stimulus package will provide a cushion down under. The ASX 200 rose +0.35% on the news .

For Glenn Stevens the game plan will now shift to “wait & see” as the next step in recovery is largely out of their hands. Although at this stage the RBA still has room to cut, the only prospects for sustaining growth at levels seen over recent years rest on a rebound in external demand for base metals and energy & agricultural commodities. In effect, the rate cuts and stimulus package in Australia, at best, may help keep the country on a relatively even footing while it waits for Beijing’s stimulus package to kick in.

We will keep our eye on Australia and the EWA etf. While we admire Governor Stevens for the resolve he showed during the bubble period, for now we are not involved in Australian equities. We will be watching for signals that are beyond his control.

Andrew Barber
Director

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."

read more

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.

read more

A Sneak Peek At Hedgeye's 2017 GDP Estimates

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

read more

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.

read more

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.”

read more

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."

read more

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...

read more

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.

read more

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?

read more

Cartoon of the Day: Political Portfolio Positioning

Leave your politics out of your portfolio.

read more

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.

read more

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!"

read more