Please note that we are adding VNQ to Investing Ideas today. Below is a brief note written earlier this morning by Hedgeye CEO Keith McCullough.
On Tuesday I presented our Q2 Global Macro Themes that boiled down to Lower-For-Longer (on rates).
Q2 2015 MACRO THEMES OVERVIEW:
#LateCycle USA: Employment, Inflation and Earnings follow an archetypic progression over the course of the economic cycle and always look best before the crest. We’ll detail where we are in the current cycle, the likely trajectory for this trinity of late-cycle macro indicators from here and how best to be positioned in the twilight of the current expansion.
#DemographicYields: Year after year in the post-crisis era, investors, economists and policy-makers alike have consistently seen their estimates for GDP growth, inflation and interest rates surprised to the downside. Perhaps there is some merit to the “secular stagnation” thesis most recently highlighted by Bernanke’s blog. In this theme, we pull back the curtains on the impact of demographics on the domestic and global economy. The conclusion? Lower-for-longer...
Oil’s #DeflationDeck: Taking a birds-eye view of oil prices throughout the peaks and troughs in business cycles provides essential context as deflation’s dominoes continue falling on a global scale. With the U.S. production machine changing the supply/demand dynamics in global energy markets, a deep-dive of this shift is key to generating sector-specific alpha into
One way to invest in Lower-For-Longer, from an equity perspective, is being long US REITS. They are testing the low-end of my immediate-term TRADE range today, but remain bullish from a TREND perspective.
KM
