McMonigle: 'Oil Production Freeze Without Iran Is No Freeze'

In light of recent discussions between OPEC and Russia about an oil production "freeze," Senior Energy Analyst Joe McMonigle at Potomac Research Group explains Iran's plans to ramp up production and why that is bearish for the price of oil, freeze or no freeze.



McMonigle: 'Oil Production Freeze Without Iran Is No Freeze' - mcmonigle pic

Why This Presidential Election Will Be A ‘Bare Knuckle Brawl’


In this brief HedgeyeTV video excerpt, Potomac Research Group Chief Political Strategist JT Taylor recaps Super Tuesday, with Hedgeye Director of Research Daryl Jones, and discusses who will be the next Democratic and Republican nominees.

Big Bang Theory: The Failure Of Global Central Bankers

Big Bang Theory: The Failure Of Global Central Bankers - big bang


Can central planners arrest economic gravity?




Here's how that is playing out in macro markets via Hedgeye CEO Keith McCullough in a note sent to subscribers earlier this morning:


"Being bearish on the big 3 global Equity indexes (Nikkei, DAX, and SP500) continues to pay off in long/short space (vs. Long TLT, XLU, GLD); this will not be highlighted by the bulls but the Nikkei closed down for the 4th straight session overnight = down -12.1% YTD (vs. DAX -8% YTD) and teetering on going back into #crash mode (-20% from July highs)"



Japanese equities are falling because of what McCullough has dubbed the #BigBangTheory. In other words, as McCullough says, the idea is that "central-market-planning (or QE)… could easily implode if the #BeliefSystem that humans can bend and smooth economic gravity crashes." 


In short, what happens when macro markets no longer believe in the omnipotence of central bankers and equities and currencies move in direct opposition to policymaker's intent?


That's a reality now. Here's a chart of (strengthening) Yen and (crashing) Nikkei post BOJ negative interest rates:


Big Bang Theory: The Failure Of Global Central Bankers - boj nikkei


It's happening in the Eurozone too. Despite ECB head Mario Draghi's best efforts to burn the euro, the currency is actually up 3.8% this year versus the U.S. dollar. Meanwhile, look at the year-to-date performance of European equities:


  • Germany's DAX: -7.9%
  • Italy's FTSE MIB: -12.7%
  • France's CAC 40: -4.8%


Big Bang Theory: The Failure Of Global Central Bankers - Draghi cartoon 03.09.2016


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10-Year U.S. Treasury Yield
1.98 1.79 1.91
S&P 500
1,974 2,049 2,040
Russell 2000
1,055 1,099 1,091
NASDAQ Composite
4,630 4,815 4,774
Nikkei 225 Index
16,595 17,248 16,936
German DAX Composite
9,502 10,105 9,892
Volatility Index
14.08 20.81 14.44
U.S. Dollar Index
95.51 97.42 94.80
1.09 1.13 1.12
Japanese Yen
111.02 114.01 111.44
Light Crude Oil Spot Price
34.59 41.52 41.67
Natural Gas Spot Price
1.69 1.96 1.93
Gold Spot Price
1,230 1,285 1,258
Copper Spot Price
2.16 2.31 2.29
Apple Inc.
99 107 105
530 584 559
McDonald's Inc.
118 124 123
Utilities Select Sector SPDR
46.24 49.47 49.31
Financials Sector SPDR
21.65 22.94 22.63
Tiffany and Co.
65.11 71.91 70.12

RTA Live: March 18, 2016


Volatility: A Disconcerting Signal For Equities

Takeaway: The VIX is at 14. That's not bullish.

Volatility: A Disconcerting Signal For Equities - Volatility cartoon 09.02.2015


The S&P 500 might be back to “flat," but being Long the Long Bond, Gold, and Utilities continues to dominate in the absolute return space. 


The recent "back to flat" rally is starting to look precarious. Here's analysis from Hedgeye CEO Keith McCullough in a note sent to subscribers this morning:


"While being right on all of my macro longs in 2016 (and having covered SPY in FEB, then coming back to the short side too early here in March SPY short -3.65% against me currently), I’m as committed to the bear side of SPX and Russell as I have been every time VIX has been in this 12-14 range since JUL (when I initially went bearish on SPY)"



Check out the corresponding chart of the S&P 500. 


Volatility: A Disconcerting Signal For Equities - s p 500 vix


With the VIX tapping 14, where do we go from here?

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