Chart Of The Week: Second-Derivatives?

 

Since its 830AM release on Friday morning, the debate on this topic has been a fascinating one to observe. From the typical CNBC market cheerleaders to the predictable bearish response from all those who missed unemployment's sequential slowdown in March/April, it's all out there.

 

David Rosenberg, who traded in his Merrill jersey for a Canadian one at Gluskin Sheff, actually wrote the following from his new perch: "changes in the second derivative only take you so far." Well, we know Rosenberg really made a boo-boo having people stay short that second-derivative rally. Trough-to-peak moves of +44%-85% in global equity markets are plenty "far" for those of us who mark our performance to market. David, maybe you should roll the Canadian bones a bit and throw some time stamps on your commentary.

 

Even David, however, didn't make what I thought was THE point in Friday's unemployment stat pack. On the margin, the unemployment rate accelerated sequentially!

 

Below, Andrew Barber and I show this very basic point using red and green arrows. Using a simple two-factor model (the unemployment rate delta versus the SP500), you'd be hard pressed to convince me that the February to March deceleration wasn't ultimately positive for US equities and the April to May re-acceleration wasn't a negative.

 

Stock market operators using live ammo beware, second-derivatives matter...

KM

 

Keith R. McCullough
Chief Executive Officer

 

Chart Of The Week: Second-Derivatives? - unempl56


Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more

Got Process? Zero Hedge Sells Fear, Not Truth

Fear sells. Always has. Look no further than Zero Hedge.

read more

REPLAY: Review of $EXAS Earnings Call (A Hedgeye Best Idea Long)

Our Healthcare Team made a monster call to be long EXAS - hear their updated thoughts.

read more

Capital Brief: 5 Things to Watch Right Now In Washington

Here's a quick look at some key issues investors should keep an eye on from Hedgeye's JT Taylor and our team of Washington Policy analysts in D.C.

read more

Premium insight

[UNLOCKED] Today's Daily Trading Ranges

“If I could only have one thing of the many things we have it would be my daily ranges." Hedgeye CEO Keith McCullough said recently.

read more

We'll Say It Again: Leave Your Politics Out of Your Portfolio

If your politics dictates your portfolio positioning, the Democrats and #NeverTrump crowd out there have had a hell of a week.

read more

Cartoon of the Day: 'Biggest Tax Cut Ever'

President Donald Trump's economic team unveiled what he called last week, "the biggest tax cut we’ve ever had.” Before you get too excited about that hang on a sec. "Trump Tax Reform ain’t gettin’ done anytime soon," Hedgeye CEO Keith McCullough wrote in today's Early Look.

read more

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