What To Watch Ahead Of Hawkish Fed Day

03/16/16 09:22AM EDT

What To Watch Ahead Of Hawkish Fed Day - rate hike cartoon 11.17.2015

Remember what happened last time the Fed tightened into a slow-down (DEC)?

"The market expects a relatively hawkish Fed today," writes Hedgeye CEO Keith McCullough in a note sent to subscribers this morning:

 

"Not surprisingly, USD is up (this wk) into the “relatively hawkish” #LateCycle Employment Fed statement – but how much USD (and rates) upside is there? Not much for now, as both the Japanese and European #BeliefSystem of FX devaluation continues to break-down, pressuring USD inasmuch as slowing housing and consumption data does."

 

https://twitter.com/KeithMcCullough/status/710035486803419136

So get ready ahead of a hawkish Fed Day:

"Right there with the Financials (XLF -6.0% YTD) as Best Ideas Shorts in 2016 YTD is the Russell 2000 (down -1.6% yesterday to -6.1% YTD) as both are much purer plays on the short side of the US economy slowing than the global one. I know that doesn’t fit the permabull narrative. But it does fit yesterday’s US Retail Sales and Housing (NAHB) data! #slowing."

 

https://twitter.com/KeithMcCullough/status/710034435098415104

Which gets us back to what happened after the December rate hike. Well, stocks tumbled and bond yields fell.

Hmmm...

© 2024 Hedgeye Risk Management, LLC. The information contained herein is the property of Hedgeye, which reserves all rights thereto. Redistribution of any part of this information is prohibited without the express written consent of Hedgeye. Hedgeye is not responsible for any errors in or omissions to this information, or for any consequences that may result from the use of this information.