prev

McCullough: ‘Sharp and Ugly Reformation’ Headed for Wall Street

 

In this brief excerpt from The Macro Show this morning, Hedgeye CEO Keith McCullough delivers a fiery response to a subscriber’s question on the staggering level of “negligence and arrogance” from bankers, the Federal Reserve and financial media.

 

 

Subscribe to The Macro Show today for access to this and all other episodes. 

 

Subscribe to Hedgeye on YouTube for all of our free video content.


Seriously... ANOTHER Themed Shopping Day?

Editor's Note: Below is a brief excerpt from an institutional research note written earlier today by our Retail team. For more information on how you can become a subscriber please send an email to sales@hedgeye.com.

 

* * *

Today is Free Shipping Friday.

 

For starters, did anyone know that this day even existed? It sounds more like an Instagram hash tag than a shopping promotion, but it’s simply another invented day along with the usual suspects (Black Friday, Cyber Monday, Small Business Saturday, Green Monday) intended to create a little extra buzz as we approach the end of the Holiday shopping season.

 

In fairness, the retailers need everything they can get. But on the flip side, if everybody is doing it, is it really a competitive advantage for anyone?

 

The day not only offers free shipping, but guaranteed delivery by Christmas eve. Of over 1064 participating merchants, one notable missing name from the list is KSS, which on its own lowered its free shipping threshold from $75 to $50 a few weeks back and introduced a whole host of Door Buster sales that will hit this Saturday.

 

Seriously... ANOTHER Themed Shopping Day? - mcgough 1

 

One day of free shipping isn't damning for margins by any means, but we think it’s indicative of the inevitable reality that US Retail is moving to 100% free shipping, 100% of the time.

 

It will be interesting to see how the carriers handle the capacity. We've seen the reports noting the higher volume, and the spread in on-time order rates has widened by 2 points vs. last year (see exhibit 2 below). With all the promises being made on delivery time, we could see a lot of disappointed parents on Christmas Day.

 

Seriously... ANOTHER Themed Shopping Day? - mcgough 2


McCullough's Take On Star Wars And Disney | $DIS

On Fox Business' Morning's with Maria, Hedgeye CEO Keith McCullough discusses why he's generally positive on shares of Disney (DIS) with FBN's Dagen McDowell and Barron's Jack Otter. As McDowell says, "this proves that Keith is no Grinch, he's no Scrooge."


Early Look

daily macro intelligence

Relied upon by big institutional and individual investors across the world, this granular morning newsletter distills the latest and most vital market developments and insures that you are always in the know.

RTA Live: December 18, 2015

replay  below

 

 


Retail Callouts (12/18): FL | This Is Bad, Free Shipping Friday, KSS, TGT

Takeaway: FL - This Is Bad. TGT launching mobile wallet after data breach, seriously. Free Shipping Friday

FL | THIS IS BAD

 

Takeaway: e-commerce trends appear to be bifurcating further between Nike and FL as we head into year-end. FL remains Best Idea Short.

 

For the full note see link: CLICK HERE

 

Retail Callouts (12/18): FL | This Is Bad, Free Shipping Friday, KSS, TGT - 12 18 2015 FL NKE

 

 

Free Shipping Friday -- Seriously... ANOTHER Themed Shopping Day?

 

Today is Free Shipping Friday. For starters, did anyone know that this day even existed? It sounds more like an Instagram hash tag than a shopping promotion, but it’s simply another invented day along with the usual suspects (Black Friday, Cyber Monday, Small Business Saturday, Green Monday) intended to create a little extra buzz as we approach the end of the Holiday shopping season.  In fairness, the retailers need everything they can get. But on the flip side, if everybody is doing it, is it really a competitive advantage for anyone?

 

The day not only offers free shipping, but guaranteed delivery by Christmas eve. Of over 1064 participating merchants, one notable missing name from the list is KSS, which on its own lowered its free shipping threshold from $75 to $50 a few weeks back and introduced a whole host of Door Buster sales that will hit this Saturday.

 

One day of free shipping isn't damning for margins by any means, but we think it’s indicative of the inevitable reality that US Retail is moving to 100% free shipping, 100% of the time.

 

It will be interesting to see how the carriers handle the capacity. We've seen the reports noting the higher volume, and the spread in on-time order rates has widened by 2 points vs. last year (see exhibit 2 below). With all the promises being made on delivery time, we could see a lot of disappointed parents on Christmas Day.

 

Retail Callouts (12/18): FL | This Is Bad, Free Shipping Friday, KSS, TGT - 12 18 2015 Shipping

 

Retail Callouts (12/18): FL | This Is Bad, Free Shipping Friday, KSS, TGT - 12 18 2015 Bizrate chart

 

 

TGT, WMT, AAPL - TGT mobile wallet in the works...great

http://uk.reuters.com/article/uk-target-mobile-payment-idUKKBN0U11U720151218

 

We don't understand the need for retailers to launch their own mobile payment systems -- aren't credit cards enough? As if the companies need to assume the liability, why not let Apple, Google, and Samsung duke it out. On Target specifically, who in their right mind would give the company that type of access to credit card information after its system and security failures led to one of the biggest data breaches in retail history?

 

BBY - Best Buy hopes faster free shipping will rein in holiday procrastinators

http://www.startribune.com/best-buy-hopes-faster-free-delivery-will-reign-in-holiday-procrastinators/362871241/

 

AMZN - Amazon leasing airplanes, tired of UPS and FedEx

http://www.seattletimes.com/business/amazon/amazon-in-talks-to-lease-20-jets-to-launch-air-cargo-business/

 

The force is strong in retail thanks to Star Wars

Marketing campaign launch date challenged Cyber Monday in online sales

http://www.houstonchronicle.com/business/outside-the-boardroom/article/The-force-is-strong-in-retail-thanks-to-Star-Wars-6704858.php

 

BABA - Bad BABA warned of selling counterfeit items by US

http://www.wsj.com/articles/u-s-warns-alibaba-again-about-selling-counterfeit-goods-1450406612

 

APP - Two Parties Aligned With Charney Said to Have Bids Out for American Apparel

http://wwd.com/business-news/financial/two-parties-aligned-with-charney-bid-for-american-apparel-10300231/

 

AMZN - Study: Most holiday shoppers check out this retailer

"87% of respondents will comparison shop at Amazon.com before buying a gift….73% of respondents said they will buy from Amazon and 71% will spend more than a quarter of their holiday budgets on Amazon"

http://www.retailingtoday.com/article/study-most-holiday-shoppers-check-out-retailer


Pervasive (Not 'Transitory') Deflation Is Ripping Markets

Takeaway: Hedgeye CEO Keith McCullough explains how #Deflation and a stronger US Dollar is rattling financial markets.

Pervasive (Not 'Transitory') Deflation Is Ripping Markets - Deflation cartoon 12.17.2015

 

The U.S. Dollar ramps and rates fall. That’s a clean cut #Deflation reaction to the Fed tightening into a slow-down.

 

Here's analysis from Hedgeye CEO Keith McCullough in a note sent to subscribers earlier this morning:

 

"The USD is re-testing the go-zone of $99-100 on the USD Index with the EUR/USD risk range suggesting $1.05 is next. In 2016 “forecast” terms, this remains grossly misunderstood from a foreign currency, commodity, EM, credit, etc. risk perspective."

 

On that point, the direction of commodities, currencies, Emerging Markets and credit are all tethered to the future of the U.S. Dollar. As a result of the USD strengthening and deflationary concerns, here's a sampling of what happened yesterday:

 

Pervasive (Not 'Transitory') Deflation Is Ripping Markets - commod

Pervasive (Not 'Transitory') Deflation Is Ripping Markets - treasury 10yr info 

Pervasive (Not 'Transitory') Deflation Is Ripping Markets - EM info

 

On a related note, Treasuries yields are tumbling after the Yellen Fed's rate hike, confounding Old Wall predictions. Below is another note from McCullough earlier today:

 

"The U.S. 10 year yield is now 2.21% = lows of the week AFTER the almighty “rate hike”- don’t forget that Industrial Production for NOV was -1.2% y/y (recession) and consumer spending put in its 6yr cycle peak (alongside employment gains) in Q1 of this yr too."

 

Pervasive (Not 'Transitory') Deflation Is Ripping Markets - industrial production 2

 

We know what this means, and so do you, because we've warned you about it for a while now...

 

Pervasive (Not 'Transitory') Deflation Is Ripping Markets - hike bad

 

If Recent market downturns aren't a repudiation of the Fed's rate hike justification, we don't know what is.


get free cartoon of the day!

Start receiving Hedgeye's Cartoon of the Day, an exclusive and humourous take on the market and the economy, delivered every morning to your inbox

By joining our email marketing list you agree to receive marketing emails from Hedgeye. You may unsubscribe at any time by clicking the unsubscribe link in one of the emails.

next