Editor's Note: Below is a brief explanation from CEO Keith McCullough on why we are adding ZROZ to Investing Ideas today.
At this point, the perma bull narrative on why "stocks are gonna rip" is changing by the week. The latest is that "rates are going up into the Fed being hawkish next week, so the Financials are gonna rip."
But, wasn't the main reason why stocks crashed in JAN-FEB that the Fed was raising rates (tightening) into a slowdown? Doesn't raising rates tighten the screws on "reflation" trades and crush Junk Bond and EM bulls?
Oh. Right. #Recession risks have abated, so it's different this time.
Right. Other than at the firm that called #GrowthSlowing to begin with. Hedgeye maintains its non-consensus view that US GDP and corporate profit growth will look slowest in Q2 when both "comp" the toughest (i.e. PEAK) of the cycle.
Buy Zeroes (and more Long-term Treasuries, TLT) on red here. It's been a much better position than "stocks" in 2016.