The Week Ahead

The Economic Data calendar for the week of the 16th of June through the 20th of June is full of critical releases and events.  Attached below is a snapshot of some of the headline numbers that we will be focused on.



The Week Ahead - 06.13.14 Week Ahead


Poll of the Day Recap: 55% Voted YES U.S. Consumers Maxed Out

Takeaway: 55% voted YES; 45% voted NO.

In today’s Morning Newsletter, U.S. macro analyst Christian Drake pointed out that the spike in credit card debt in April occurred alongside very weak consumer spending and housing data – weakness that extended into May. “Tapping credit to purchase everyday essentials because cost inflation is running at multiples of income growth,” he wrote, “is not reflective of a resurgent consumer driving an accelerating, sustainable consumption recovery.”


It is important to note that this is only one preliminary data point that is volatile and subject to significant revision, we should have a better sense of the legitimacy of it when the card companies report May data next week.


We wanted to know what you think. Today’s poll asked: Are U.S. consumers maxed out?


Poll of the Day Recap: 55% Voted YES U.S. Consumers Maxed Out - cut 


At the time of this post, 55% voted YES; 45% voted NO.


Voters who believe YES, U.S. consumers are maxed out, had this to say:

  • Most investors don't understand how to interpret credit card debt. Counter intuitively, it's procyclical and tends to be a reflection of confidence, i.e., debt grows as confidence is rising. Not the other way around. Yes, there are obviously some who use it as a stop gap for essentials or unexpected crises, unfortunately. But most of the actual balance growth comes from affluent people who use it for projects, vacations, etc. I voted yes on this question not because I think credit card is signaling consumers being tapped out, but because the youngest cohort of the economy is tapped out for an entirely different reason, student loans. That's the real elephant in the room…
  • I'm as good a proxy as any consumer, as I thoroughly enjoy consuming. Just dropped $7500 in moving expenses and definitely feeling it. $3500 broker fee for 15 mins of work on their end. Brutal. I might actually have to pare back my Bud Light consumption this weekend! 
  • Yes, but only because they're undisciplined in adjusting spending habits; cost of groceries are up, so where else can they save; most don't want to give anything up, and that's where it starts to fall apart.

Those who voted NO reasoned:

  • We are not there yet. Certainly some are maxed out but those who are probably find themselves in that situation more often than not regardless of economic conditions. Until there is a real downturn in the economy it is doubtful that we will reach the debt limits of the recent past.
  • There's nothing to indicate this is the case; if and when there's a serious market correction, and people start losing jobs, and if the cost of various goods continue to go up, then people will get themselves in trouble, but we're not there yet.
  • Coupled with improving labor market conditions this is a sign of confidence that a fundamental improvement is occurring #rolltide



Hedgeye Statistics

The total percentage of successful long and short trading signals since the inception of Real-Time Alerts in August of 2008.

  • LONG SIGNALS 80.43%
  • SHORT SIGNALS 78.35%

Cartoon of the Day: Feeling The Squeeze

Takeaway: The U.S. consumer is feeling the squeeze of rising inflation, a weak dollar, and ripping oil prices.

Cartoon of the Day: Feeling The Squeeze - 6 13 14




Grant: Why You Should Buy Gold


James Grant, founder and editor of Grant's Interest Rate Observer, explains to Hedgeye CEO Keith McCullough the reasons why investors ought to seriously consider adding gold to their portfolios in this edition of "Real Conversations."

VIDEO | Macro Notebook 6/13: OIL INFLATION UST 10YR

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