QUICK HIT | Peeling Back the Q3 GDP Onion: #Quad4 Is Confirmed

Takeaway: With this [soon-to-be-revised-down, pre-election Q3 GDP print], the U.S. economy is squarely in #Quad4 and should remain there throughout Q4

This note was originally published October 30, 2014 at 08:49 in Macro

QUICK HIT | Peeling Back the Q3 GDP Onion: #Quad4 Is Confirmed - growth cartoon 10.08.2014

It’s busy morning for our Macro Team here at Hedgeye with Keith live on Fox Business with Maria Bartiromo for the 9am hour, this Q3 GDP release and a busy day of customer meetings in New York. Fortuitously, we have a #process that allows us to quickly and appropriately contextualize this Q3 GDP “beat”:

 

QUICK HIT | Peeling Back the Q3 GDP Onion: #Quad4 Is Confirmed - 23

 

Yes, that’s #Quad4, and yes, #Quad4 is bearish for asset prices:

 

QUICK HIT | Peeling Back the Q3 GDP Onion: #Quad4 Is Confirmed - GIP Model Backtest

 

The good news for growth bulls is that the YoY number (i.e. the one 20 years of backtest data suggests the market actually cares about) came in above our +1.9% estimate at +2.3%. The bad news is that that figure is still down from +2.6% in Q3.

 

#GrowthSlowing, in rate-of-change terms.

 

Refer to our note from last night titled, “NERVOUS ABOUT GROWTH AND CAN’T SLEEP? WE DON’T BLAME YOU…” for more details on why the U.S. economy is set to slow further here in Q4. The 20 charts in that note are very easy to consume and startling, to say the least.

 

Best of luck out there!

 

DD

 

Darius Dale

Associate: Macro Team


SECTOR SPOTLIGHT | Live Q&A with Healthcare Analyst Tom Tobin Today at 2:30PM ET

Join us for this edition of Sector Spotlight with Healthcare analyst Tom Tobin and Healthcare Policy analyst Emily Evans.

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

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