Editor's Note: Below is an excerpt and chart from today's Early Look written by Hedgeye CEO Keith McCullough. If you're interested in getting a step ahead of consensus each morning click here to learn more.
...Not only are whoever these “economists” are now completely ignoring Mr. Macro Market’s opinion (Fed Fund Futures imply less than a 15% chance of a SEP hike), but they are at complete odds with me on the risk of raising rates into a slowdown.
At least since the last two Wall Street tops (2000 and 2007), the Fed has only eased during slowdowns. Remember the man before Draghi at the ECB helm, Jean-Claude Trichet? He raised rates in 2011 and pretty near blew up the capital market world.
Ah, what do I know about buying cyclicals and/or tightening at the end of a cycle? It’s probably different this time. Post a 6yr equity ramp shouldn’t you pay 351x earnings for Netflix or chase QQQs?
I’m hearing the charts “look good.” They did in 2000 and 2007 too.
