BREAKING: US GDP hit the 0.7% Hedgeye forecast. We maintained our forecast of between 0.5% to 1.7% Q-o-Q for fourth quarter 2015 GDP all year, even while Old Wall consensus consistently ratcheted it back from 3% in July.
Here's the inglorious breakdown:
In other words, our non-consensus macro team nailed the last five GDP reports while economic reality still confounds Wall Street's pundits. We'll say it again #GrowthSlowing.
https://twitter.com/KeithMcCullough/status/693064812855631872
https://twitter.com/Mez_Mo/status/693065365367164928
https://twitter.com/Flamingogmom/status/693071461276200960
Here's the breakdown of today's GDP release via Hedgeye U.S. Macro analyst Christian Drake. Note all the red in the right-hand column. (That's bad.)
https://twitter.com/HedgeyeUSA/status/693066924620668928
It's funny. Supposed "blue chip" economists can hold up personal consumption expenditure (PCE) as an economic "bright spot" all they want. But staring at the absolute number of any data release tells you nothing about where we're headed.
At Hedgeye, our analysis is more dynamic and based on the year-over-year rate of change. By this measure, PCE is slowing. (That's also bad.)
https://twitter.com/HedgeyeUSA/status/693065327048028160
The preponderance of economic data – from employment to incomes to PCE growth – is rolling over on a rate-of-change basis. We'll throw in one more metric for good measure: Credit growth.
See the chart below. (Again, bad.)
https://twitter.com/HedgeyeUSA/status/693069574162395137
Interesting. All of these economic indicators peaked in 1Q 2015.
Coincidence? We think not.
https://twitter.com/WarrenWise/status/693064643661664256
For investors (particularly long-only investors), the current macro environment presents an especially tough setup. Our Macro team has been highlighting the increasing likelihood of a U.S. #Recession in the 2Q or 3Q of this year.
Moreover, as Hedgeye CEO Keith McCullough continues to reiterate, regardless of whether our #Recession call is right or not, the U.S. stock market is headed for a 20% correction. No ifs, ands, or buts about it.
How do you play it?
Here are our top Macro ideas: Long bonds (TLT) & Utilities (XLU)
https://twitter.com/KeithMcCullough/status/693067295933878273