This is an important week for market watchers. On Wednesday, we’ll get an update on the Fed's interest rate policy. If you follow us, you already know our #LowerForLonger mantra all too well. In other words, we think it's highly unlikely our central planners will raise rates any time soon.
The next day we'll get a preliminary estimate on U.S. Q3 GDP. Another related theme here at Hedgeye is #GrowthSlowing, which espouses our increasingly dour outlook for both earnings and economic growth.
No surprise. Our Q3 GDP estimate is well below consensus.
As our macro analyst Darius Dale laid out in a recent conference call with subscribers, we’re calling for between 0.1% and 1.5% year-over-year Q3 GDP growth, versus the average 2.2% expected on Wall Street. It's worth noting that the consensus estimate has come down markedly throughout the year from above 3%. (We've consistently been at the low end of the range.) See the chart below.
We’re obviously in the #SlowerForLonger camp. Our forward-looking outlook for lackluster U.S. growth hinges on an increasingly strong dollar, bearish demographic trends and deflation.
Let’s be clear. We’ve got plenty of long-short ideas on how to play the evolving macro landscape. But investors that don’t should watch out.
