This note was originally published at 8am on December 24, 2013 for Hedgeye subscribers.
“There is nothing in the world so irresistibly contagious as laughter.”
Charles Dickens started writing A Christmas Carol in 1843 as a progressive economic answer to the fear-mongering of the politicians of his age. Negativity, after all, is a long-standing and regressive (but effective) political strategy.
Sylvia Nasar quotes Dickens in Grand Pursuit - he called his story “a tale capable of twenty times the force - twenty thousand times the force of a political pamphlet.” The narrative “argues the economic historian James Henderson, is an attack on Malthus… an England characterized by New world abundance rather than Old World scarcity.” (Nasar, pg 7)
New versus old. Rich versus poor. These are timeless realities of life. But they don’t always have to oppose one another. Leaders, across centuries, have found a positive alternative to perdition’s path. This time was not “different.” There was no “new normal” either. Like laughter, the truth is contagious. And the truth is that patterns of human behavior and business cycles repeat.
Back to the Global Macro Grind…
The SP500 and Gold are up 401 points (+28.1%) and down $475 (-28.3%), respectively for 2013 YTD. Depending on who you are talking to, that reality will either make them laugh or cry!
As Dickens wrote in A Christmas Carol, “no space of regret can make amends for one life’s opportunity misused.” And oh boy was investing in growth (and shorting fear) quite the opportunity.
Since my kids are giving me an opportunity to laugh and smile this morning, I’ll keep the rest of my Christmas Eve note to just levels. It’s Daddy’s day off, allegedly.
Top 10 Bullish TRENDS @Hedgeye (and their immediate-term TRADE risk ranges)
1. UST 10yr Yield 2.88-2.95% (bullish)
2. SP500 1796-1835 (bullish)
3. Nasdaq 4047-4158 (bullish)
4. Germany’s DAX 9197-9533 (bullish)
5. UK’s FTSE 6539-6719 (bullish)
6. Japan’s Nikkei 15503-15989 (bullish)
7. British Pound 1.62-1.64 (bullish)
8. Euro (EUR/USD) 1.36-1.38 (bullish)
9. Brent Oil 109.89-112.12 (bullish)
10. Natural Gas 4.36-4.51 (bullish)
Top 10 Bearish TRENDS @Hedgeye (and their immediate-term TRADE risk ranges)
1. BOND (PIMCO Total Return Fund) 104.31-105.32 (bearish)
2. Long-term Treasuries (TLT) 102.08-104.77 (bearish)
3. Short-term Treasuries (SHY) 84.09-84.57 (bearish)
4. Emerging Markets (MSCI EM Index) 977-1009 (bearish)
5. Brazil’s Bovespa 49,308-52,172 (bearish)
6. US Equity Volatility (VIX) 12.56-14.91 (bearish)
7. Gold 1179-1221 (bearish)
8. Silver 19.01-19.97 (bearish)
9. Wheat 5.89-6.38 (bearish)
10. Japanese Yen (vs USD) 102.48-104.92
Most of these intermediate-term bullish and bearish TRENDs aren’t new as of this morning. With sporadic ramps in fear, they’ve been trending for the better part of a year now. What a year it’s been.
From our family and firm to yours, we’d like to thank you for your business and wish you both a very Merry Christmas and a Happy Holiday season,
Keith R. McCullough
Chief Executive Officer