4 Charts Laying Out Our Recession Call

We've been warning for a while now about the coming recession which we anticipate may arrive in the second quarter of this year. Below are three charts laying out our thesis and a fourth explaining why, even if we're wrong on that recession, the US stock market is probably going to crash anyway...  

 

4 Charts Laying Out Our Recession Call - recession cartoon 12.22.2015

1. A past peak profit cycle... 

"Once a peak in the S&P 500 breaks below its twelve month trailing average, look what happens. It rolls off and it goes down really fast," Hedgeye CEO Keith McCullough said on The Macro Show.

 

4 Charts Laying Out Our Recession Call - eps

 

2. Consumer Confidence breaking off its cycle high...

"People aren't confident right now. As you can see, in the cycle, it's an elevator on the way up and windows on the way down," McCullough said.

 

4 Charts Laying Out Our Recession Call - conf

 

3. the end of declining jobless claims... 

"Jobless claims always peak at 600,000 and bottom at 300,000 at the end of the cycle. In the next six months you're right where you're at in the prior three recessions," McCullough said.

 

4 Charts Laying Out Our Recession Call - layoffs

 

For good measure, here's one of McCullough's favorite slides from this week's 73-page Q1 Macro Themes presentation explaining why U.S. stocks are headed for a crash regardless of what happens with our recession call. (To get access to our Macro team's entire presentation ping sales@hedgeye.com.)

 

 


UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more

Got Process? Zero Hedge Sells Fear, Not Truth

Fear sells. Always has. Look no further than Zero Hedge.

read more

REPLAY: Review of $EXAS Earnings Call (A Hedgeye Best Idea Long)

Our Healthcare Team made a monster call to be long EXAS - hear their updated thoughts.

read more

Capital Brief: 5 Things to Watch Right Now In Washington

Here's a quick look at some key issues investors should keep an eye on from Hedgeye's JT Taylor and our team of Washington Policy analysts in D.C.

read more

Premium insight

[UNLOCKED] Today's Daily Trading Ranges

“If I could only have one thing of the many things we have it would be my daily ranges." Hedgeye CEO Keith McCullough said recently.

read more

We'll Say It Again: Leave Your Politics Out of Your Portfolio

If your politics dictates your portfolio positioning, the Democrats and #NeverTrump crowd out there have had a hell of a week.

read more

Cartoon of the Day: 'Biggest Tax Cut Ever'

President Donald Trump's economic team unveiled what he called last week, "the biggest tax cut we’ve ever had.” Before you get too excited about that hang on a sec. "Trump Tax Reform ain’t gettin’ done anytime soon," Hedgeye CEO Keith McCullough wrote in today's Early Look.

read more

Neurofinance: The Psychology Behind When To Sell A Bull Market

"Most momentum investors stay invested too long, under-reacting and holding tight after truly bad news finally arrives to break the trend," writes MarketPsych's Richard Peterson.

read more

Energy Stocks: Time to Buy the Dip? | $XLE

What the heck is happening in the Energy sector (XLE)? Energy stocks have trailed the S&P 500 by a whopping 15% in 2017. Before you buy the dip, here's what you need to know.

read more