Call Invite | Is the Market Prepared for What South Carolina May Signal?

Please join us Friday, February 19 at 11:00 a.m. for a special call with South Carolina's Republican and Democratic Party Chairmen, as we approach a pivotal moment in the election calendar. Specifically, there's less than one week left until the first votes are cast for the Republicans on February 20 followed by the Democrats on February 27. As such, we're very pleased to be hosting Democratic Chair Jamie Harrison and Republican Chair Matt Moore, who will give us their respective outlooks on how each race is developing in their state, and examine South Carolina's impact beyond the primary -- including a preview of Nevada and the Super Tuesday states voting March 1.


  • Matt Moore's bio available HERE
  • Jamie Harrison's bio available HERE

Dial-In Instructions for the Live Call:



If you have a question(s) you would like to ask, please send an email before or during the call to 


About Potomac Research Group

Potomac Research Group -- a Hedgeye company -- is a well-respected team providing Washington policy analysis to institutional investors and private equity firms. Together with Hedgeye's Macro and fundamental investment research, PRG's actionable, predictive and non-consensus analysis of federal legislative activities and regulatory policies helps clients determine Washington's impact on highly-regulated industry sectors, including health care, defense, finance, technology, and telecommunications.

For more information, please contact .

DRI: Adding Darden Restaurants to Investing Ideas (Short Side)

Takeaway: We are adding Darden Restaurants to Investing Ideas today.

Editor's Note: Please note that Hedgeye Restaurants analyst Howard Penney will send out a full report outlining our high-conviction short thesis later this week. In the meantime, below is a brief update sent today by Hedgeye CEO Keith McCullough in Real-Time Alerts:


DRI: Adding Darden Restaurants to Investing Ideas (Short Side) - darden


"I'm looking for the "consumer is in good shape" narratives to short...


And Howard Penney (of Chipotle short selling fame) is telling me to look no further than the never ending bowl of storytelling pasta.


Darden is up on a rope relative to where it was when Penney went bullish on it a few years ago... and he reminded our Institutional Research subscribers why it could go back to where it was on a conference call on February 2nd, 2016.


His new target price range is in the low $40’s 


Insiders might agree. Per Penney, "recently DRI’s largest shareholder announced it was selling more stock.  DRI’s core brand, Olive Garden is in need of a massive infusion of capital to fix the secular decline in traffic. 


Knowing this investment will slow earnings growth and depress the multiple; we don’t want to own the stock either!"


Short Green,



McCullough: ‘Are You Bearish Enough?’


In this brief excerpt of The Macro Show from this morning, Hedgeye CEO Keith McCullough explains why most investors aren’t bearish enough.

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4 Charts That Will Shape The Presidential Election

265 days left until America heads to the polls. On this note, Hedgeye Senior Macro analyst Darius Dale recently laid out the "most important charts that have and will continue to shape the election." You can follow Darius on Twitter via @HedgeyeDDale


Here's the brief rundown:


1. Check out the decline in average employee compensation, even while the Fed massively expanded its balance sheet.


Click to enlarge.

4 Charts That Will Shape The Presidential Election - fed balance sheet


2. U.S. Household Wealth as a % of Disposable Personal Income vs Shadow Federal Funds Rate


Click to enlarge.

4 Charts That Will Shape The Presidential Election - household wealth


3. Here's the breakdown in U.S. household wealth by percentile.


Click to enlarge.

4 Charts That Will Shape The Presidential Election - wealth distrib


4. And the breakdown of ownership of financial assets by household wealth distribution.


Click to enlarge.

4 Charts That Will Shape The Presidential Election - wealth distrib fin assets 


In essence, a large contributor to the sustained Trump/Sanders appeal appears to be (despite the Fed's best efforts) that many Americans aren't participating in the central bank's easy-money economic "recovery." 

Bounce? A Quick Review Of (Crashing) Global Markets

Takeaway: Markets across the world remain in crash mode.

Bounce? A Quick Review Of (Crashing) Global Markets - bounce cartoon 02.12.2016


Talk of global equity market bounces is laughable. Here's a scorecard of global stock market performance in the past year highlighting the drawdown in major equity indexes from their respective 2015 highs.


Not good.


  1. MSCI World Index: -18.3%

  2. China's Shanghai Comp: -45.1%

  3. Spain's IBEX: -31.3%

  4. Japan's Nikkei: -23.1%

  5. Germany's DAX: -26.5%

  6. France's CAC 40: -22.2%

  7. U.S. Russell 2000: -24.4%

  8. U.S. S&P 500: -11.9%


Last week's "bounce" in U.S. equities was far from a vote of confidence. It came on no-volume.


Bounce? A Quick Review Of (Crashing) Global Markets - volume us



Below is a quick smattering of crashing global financial markets and their "bounces" for context...











"1-day bounce (yesterday) does not an arrest of the stock market crash make," Hedgeye CEO Keith McCullough wrote in a note to subscribers this morning. "Draghi’s Euro is actually up vs. USD this morning as Italian stocks continue to crash and the DAX falls back to -26% since the 2015 peak – should he jawbone daily?" 





"Context is critical here – after another -4.7% week for WTI, they bounced it +3-4% on the OPEC headline this morning and have since lost most of that. The risk range remains intact at $26.02-31.39 (don’t chase bounces, sell them!)," McCullough wrote.


Central Planners Try To "Soothe Markets." What Happens When No One Believes Them Anymore?

Takeaway: Try as they may, central planners can't stop economic gravity.

Central Planners Try To "Soothe Markets." What Happens When No One Believes Them Anymore? - central banker cartoon 02.02.2016


"In the last 48 hours, we’ve seen some of the biggest ideological rock-stars of the central-market-planning bubble come out singing," Hedgeye CEO Keith McCullough wrote in this morning's Early Look. In case you missed it, here's a quick wrap up of the soothing words uttered by global central planners over the weekend:


  • Japan is pushing greater cooperation from its G7 partners to soothe market jitters, government sources say.
  • Mario Draghi and the ECB stand “ready to do its part,” i.e. the central bank could unveil further stimulus measures next month.
  • Meanwhile, Saudi Arabia and Russia have agreed to freeze oil output in a meeting in Qatar.

thought experiment:


What happens when the market no longer believes them? What happens when the music stops?



It's getting crazy..


Central Planners Try To "Soothe Markets." What Happens When No One Believes Them Anymore? - abc news


As the expression goes ... "May you live in interesting times." Rest assured this monetary policy gong show is going to get more interesting as reality sets in.


Central Planners Try To "Soothe Markets." What Happens When No One Believes Them Anymore? - Yellen Yoda cartoon 12.01.2015 


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