On The Macro Show earlier this morning, Hedgeye Financials analyst Josh Steiner joined CEO Keith McCullough to discuss key market developments, including a granular look at the weak quarter JPMorgan (JPM) just put up.
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The conversation shifted gears when McCullough responded to a subscriber’s question during the interactive Q&A portion of the show regarding how far along the U.S. is in the current economic cycle.
“[The U.S. expansion] is long-in-the-tooth and slowing,” Keith said. “It’s already showing up in the cyclical and industrial sectors…You don’t have a consumption recession, yet, but the employment and consumption pieces [of the economy] are clearly rolling over as they do at the end of every cycle.”
To prove his point, Keith pulled up a thought-provoking slide from our macro team’s recent 73-page presentation of our top 3 Q4 2015 Macro Themes.
As you can see in the slide below, it shows the past 85 years of economic cycles. Our current expansion stands at 77-months. To put that in perspective, the median expansion typically lasts around 50-months.
Click image to enlarge.
In other words, we’re in the twilight of U.S. economic expansion. Hence, our new macro theme #SuperLateCycle. (Please ping sales@hedgeye.com if you’re interested in getting access to our macro presentation.)
“What comes after the SuperLateCycle?” Keith asked rhetorically.
A recession.
