The Macro Show Replay | June 18, 2015

Please note that we experienced some technical difficulties during today’s show. Hedgeye CEO Keith McCullough called in live to The Macro Show from London and the connection was compromised. We apologize for the inconvenience.



June 18, 2015

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Dale on the Fed: 'This Won't End Well'

Takeaway: Short the FOMC's "dot plot."

The Fed has cut its growth forecast by ~40% in the past six months, yet officials still expect two rate hikes in 2015.


This won't end well.


The FOMC's growth forecasts have been consistently too optimistic by 90 basis points on average over the past 5 years. 2015 looks like more of the same.


Click to enlarge 

Dale on the Fed: 'This Won't End Well' - z dale gdp


It is unlikely that the trend in domestic economic data will support hiking interest rates at any point in the next 6-9 months.


Dale on the Fed: 'This Won't End Well' - z dale forecasting


My best long-term investment idea? Short the FOMC's "dot plot." Is there a futures market for that?


As an investor, you shouldn't let the Fed set your monetary policy expectations. Do your own work on the economy and beat them to the punch.

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McCullough: "We’re One Bad Jobs Report Away From No September Or December Rate Hike"

Takeaway: This [FOMC Decision] is more dovish than expectations.

Editor’s Note: Below is an abridged reaction on Twitter from Hedgeye CEO Keith McCullough to today’s FOMC announcement. McCullough was tweeting live from London where he is visiting institutional customers.

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This [FOMC Decision] is more dovish than expectations.

McCullough: "We’re One Bad Jobs Report Away From No September Or December Rate Hike" - Yellen dove 09.17.2014


Mr. Market's analysis of this matter is crystal clear: USD devaluation  … on the lows of the day… Stocks, Bonds, Commodities are off their lows.


We are one bad jobs report away from no September or December rate hike.


The Fed doesn't target a date - that means data dependence.


No Dissent = #data dependent - so you better damn well have a data forecast that's accurate. These Fed estimates are completely back end loaded - if the data slows, push out dots.


And to all my friends in London, I bid you good pub time (and good night).

Cartoon of the Day: (Still) a Dove

Cartoon of the Day: (Still) a Dove - Fed cartoon 06.17.2015 dove

"This is more dovish than expectations," Hedgeye CEO Keith McCullough tweeted shortly following release of the FOMC statement. "You're one bad jobs report away from no September or December rate hike."

Buy Everything - Part II?

Editor's Note: This is an excerpt from a note written earlier this morning by Hedgeye CEO Keith McCullough. If you'd like more information on how you can subscribe to our services click here.

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If you ask Doctor Dollar, Janet Yellen may very well do what we think she should do. That is … stay “data dependent” with no timing on interest rates. That would mean Down Dollar, Down Rates and Up Almost Everything (similar to what I said during our live March 18th FOMC meeting call).


We think both U.S. equity futures (yesterday), and Oil again today are front-running this scenario.


Unfortunately for our friends in Europe (where I happen to be writing this morning) you get #StrongerEuro on this development. And the DAX, CAC (both down -4% in the last month) no likey Down Dollar. It means up Euro.


So we still like long U.S. Equities vs. short EuroStoxx with the Slower-For-Longer (down rates) view.


For now…


Buy Everything - Part II? - z ben cha

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