watch the replay below
Hedgeye's rock-star Healthcare Team was live in the studio discussing Hospital Corporation of America (HCA), Hologic (HOLX) and Zimmer-Biomet (ZBH), and fielding questions from viewers.
They reviewed the following:
- An Update on 4Q15 Earnings & the Key Drivers of HCA, AHS, HOLX
- Will the Upside in Ortho Continue?
- CBO, #ACATaper’s Exchange Enrollment Forecast
Editor's Note: This is abridged commentary from Hedgeye CEO Keith McCullough following today's Fed statement.
The decaying foundation of the already shaky Old Wall edifice took another major hit today. Make no mistake, it is crumbling fast ... brick by brick. The reality is that very few market pundits (or TV channels for that matter) prepared you for where you are today.
That’s a statement of fact.
My message? Stick with the 2.0 sources. Stick with the risk managers that warned you and helped you protect your hard earned capital. After all, if you've completely missed the mark on the last 7 months of this move, why would anyone trust you'll get the next 7 days?
Now... where do we come in?
Here's what I said in real-time just after the FOMC statement.
...Here's what happened.
So, what exactly happened today? For starters, this FOMC statement was nowhere near as "dovish" as people we speak to were thinking it might be. In other words, our unelected central planners at the Fed didn't remove their "transitory" view of #Deflation (despite it being pervasive). This keeps the US Dollar strong and deflation intact.
The Fed is in a box. So, keep doing what we have had you doing. That means buy US Dollars, buy the Long Bond (TLT), and sell stocks.
Here's what we said following the last Fed decision:
- USD would rise
- 10yr Yield would fall
- Stocks would fall
As the tape showed today, there is very low probability that any of those 3 Big Macro Trends above changed at all today.
This has been one of the worst January's ever for US stocks and it will likely end that way. By our calculus, "ever" remains a very long time. And while it may seem like a joke, Old Wall is begging for easing now.
I don't know how much longer The People will stand for Old Wall and its Media lying to them... but wow. Old Wall Consensus on the US economy is a certified train wreck. The truth is not that hard to see at this point, unless you’re compensated to be willfully blind to it.
Rest assured of one thing: we will never bow down to the conflict of interest of Old Wall or its media.
This Old Wall is coming down.
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Takeaway: Central planners can't arrest economic gravity.
IT'S FED DAY ... joy.
In this no punches pulled excerpt from The Macro Show today, Hedgeye CEO Keith McCullough explains why regardless of what the Fed says today, he still thinks we're headed for a 20% or more correction in the S&P 500.
"No matter what the Fed gives you today, they're not going to give you economic growth. They might get oil prices to $33. I'll give them a hero cookie for that.
But the bigger question here is what happens when investors realize that central planners cannot arrest economic gravity? The answer: People start to sell because profits are slowing. That's the most obvious call.
Whether you look at Boeing or Apple this morning, profits continue to slow. And if profits continue to slow -- we laid this out in our Macro themes deck -- for two consecutive quarters, the S&P 500 is most likely to be around 1700. That's a 20% correction from the highs. That's the call that I'm staying with.
CLICK THE IMAGE TO ENLARGE
So I don't really care what the Fed says. It's not going to change the economic trajectory. It's not going to change the economic data. The U.S. economy is still going to be what it is and that's slowing.
I don't think the Fed is going to be as dovish as people are hoping. As we have continued to remind clients for a long time, you can hope all you want, but hope is not a risk management process."
Takeaway: The latest data out of Europe and China confirms our 18-month old #GrowthSlowing theme.
Got global growth slowing?
Our Macro team analyzed the latest batch of global #GrowthSlowing data in a note sent to subscribers this morning.
Here is the key takeaway on Europe:
"... Today, the German economic ministry cut Germany’s 2016 growth forecast to 1.7% from 1.8% previously forecast. It also cut the 2016 export growth outlook to 3.2% vs prior 4.2% and lowered its outlook for import growth to 4.8% vs 5.3%. #EuropeSlowing."
... Then there's China:
"... Chinese industrial profits declined -4.9% Y/Y in December which is a sharp deceleration from -1.4% Y/Y in December. Whispers of fresh stimulus might be the only fading hope to delaying the flush of global overcapacity hanging on the “Chinese Demand” story."
Global #GrowthSlowing has been our Macro call for 18 months now. The latest batch of data confirms our thesis. We're sticking with it.
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