Hedgeye CEO Keith McCullough joined Fox Business anchor Maria Bartiromo on "Opening Bell" for the hour this morning. Here's a clip of him discussing how he's investing in this current interest rate environment.
Watch our bi-weekly update on our active Macro Themes and Thematic Investment Conclusions below.
CLICK HERE to download the associated presentation in PDF format (20 slides).
As always, feel free to ping us with questions.
Have a great weekend,
* * * * * * *
YOU'RE INVITED TO A SPECIAL HEDGEYE RIA EVENT
CINCO DE MACRO WITH HEDGEYE
- DATE: Tuesday, May 5th
- TIME: 5:00 - 7:00PM EST
- LOCATION: Hedgeye's Stamford, CT Office
- RSVP: Ping Matt Moran at firstname.lastname@example.org
We're back at it again! You are cordially invited to our smartly designed HQ in Stamford, CT to explore the current macro environment and discuss the best places to allocate capital.
To celebrate Cinco de Mayo, we'll also break out for beverages (including margaritas), hors d'oeuvers, and give you the opportunity to speak 1-on-1 with Hedgeye's macro team. This will be an amazing opportunity to meet one of the most polarizing names on Wall Street, our CEO Keith McCullough, and learn about the global macro process that has lead us to make myriad prescient macro calls.
Topics for the formal presentation will include:
- Our non-consensus call on the Fed's timeline for a rate hike and what that means for rate sensitive securities in the intermediate-term
- Ways to play an emerging U.S. housing recovery amidst the backdrop of deregulation and positive inflection points in the core data
- How economic signals based on our GIP (growth/inflation/policy) predictive model translate into actionable, alpha generating macro themes
Don't miss this night of drinks and macro insight! RSVP to reserve a spot.
-The Hedgeye Macro Team
The total percentage of successful long and short trading signals since the inception of Real-Time Alerts in August of 2008.
LONG SIGNALS 80.30%
SHORT SIGNALS 78.51%
Takeaway: A difficult comp, but the March decline in taxi traffic suggests another disappointing GGR month that could depress Q1 EPS for MGM/WYNN
- As seen in the chart below, monthly Strip non-Baccarat drop and NV taxi traffic closely track each other – correlation coefficient of 0.57 and a t-stat of 9.0
- March taxi traffic declined 5.2% and while the comp was difficult at +10.9%, so was the non-bacc drop comparison, +6.2%
- Following a strong January when GGR grew 15%, February was weak at –4% and now March is looking potentially lower as well
- These are not exactly the figures of a ‘strong Las Vegas recovery’
With the German equity market (DAX) pulling back just under -1% today, we reiterate that we remain bullish on German equities and recommend buying the market on down days.
We are well aware that the DAX is already up 20.5% YTD (vs SPX ~ 2%), yet we think it will pay to obey the commands of the central planners, in particular Mario Draghi’s “whatever it takes” ECB policy position.
To reiterate our thesis:
- QE is only just beginning; the euro should continue to weaken; Germany is likely to disproportionately benefit due to exports; and asset classes like equities are likely to inflate due to money creation
- The German economy sits in the sweet spot to benefit from a weaker euro as its exports account for a monster 47% of German GDP
- Since the ECB announced QE on 1/22/15 the correlation between the DAX and EUR/USD is -0.84, a strong negative correlation that we expect to persist as the ECB keeps its foot on the QE pedal for longer than its intended target (late 2016)
- Recommending long the DAX (HEWG or EWG) and short EUR/USD (FXE)
If you missed our call “Germany: Still Bullish” on 4/14, CLICK HERE for a 30 minute video replay that walks through 40 slides of supporting material.
Already this week there have been a number of “fundamental” data points that we think will grind the EUR/USD lower and the German equity market higher:
- There appears to be no resolve on Greece’s debt issues, with Friday’s Eurogroup meeting expected to pass without formal loan/concession agreements. The next catalyst is an IMF loan repayment due May 12th.
- Everyone from Draghi, Junker, and the German leadership was out this week confirming that a “Grexit” is off the table. Ultimately we think debt restructuring is the likely outcome, and we expect a long timetable and political consternation to get the Greeks to better meet Eurozone demands & conditions.
- German ZEW economic survey for APR showed an improvement for the 6th straight month in Current Expectations (70.2 vs 55.1), however the forward looking Expectations survey dipped slightly to 53.3 vs 54.8, the first tick down after 5 straight months of improvement.
- The German Economy Ministry revised up its outlook on German growth, with 2015 GDP forecast at 1.8% vs prior 1.5% and 2016 GDP at 1.8% vs prior 1.6%.
- From a quantitative perspective the DAX remains in a bullish formation, trading above its TRADE, TREND, and TAIL levels of support, whereas the EUR/USD remains in a bearish formation, trading below its TRADE, TREND, and TAIL levels of resistance. (see charts below)
daily macro intelligence
Relied upon by big institutional and individual investors across the world, this granular morning newsletter distills the latest and most vital market developments and insures that you are always in the know.