Editor's Note: This is an excerpt from today's Morning Newsletter which was written by Hedgeye Senior Macro Analyst Darius Dale. If you're ready for some dynamic market and economic insight and analysis, we encourage you to subscribe.
Since this is probably the only strategy note you’ll read this morning that doesn’t focus on the jobs report, we’ll leave you with another piece of seemingly-random-but-useful analysis. The key takeaway from the Chart of the Day below is that over the next 2-3 months, the preponderance of high-frequency growth data is likely to look optically better relative to consensus expectations from here. It literally can’t get much worse as far as the surprise factor is concerned and we’re quite sure expectations for a broad swath of indictors were lowered after that soft 1Q GDP print. Also, 2Q GDP will accelerate on a headline (i.e. QoQ SAAR) basis.
We believe rates have likely priced in these dynamics and see no reason for bond yields to chase them any higher.