What Investors Missed Hanging On Yellen's Every Word

Takeaway: Stick with what has worked all year: Gold, Utilities, Long Bonds (and short the Fed's forecast.)

What Investors Missed Hanging On Yellen's Every Word - Yellen cartoon 03.17.2015

 

Omnipotent (dovish?) Fed head Janet Yellen yesterday said the opposite of her hawkish regional Fed talking heads who made the Old Wall media rounds last week. So, naturally, USD/Rates smoked, reflation rallies!

 

However, what really matters is not Janet Yellen's every last word but economic fundamentals, which continue to slow. According to Hedgeye CEO Keith McCullough:

 

"As opposed to v-bottoms on the SPY short-side, the long side has been easy YTD – as #GrowthSlows, Fed Easing has pounded the 10yr down to 1.81% this morning (2yr just went from 0.90% to 0.77% in less than a week on Fed Head confusion) and Utilities (XLU) continued to lead the way on yesterday’s Yellen Ramp, closing up another +1.5% = +14.3% YTD XLU."

 

 

How about those sectors? Take a look:

 

What Investors Missed Hanging On Yellen's Every Word - sectors macro

 

There's more...

 

"Heck, why buy Utes on Yellen turn-tailing dovish when you can go right to the vein and buy Gold? It was +3% yesterday (vs. Financials barely up at +0.18% XLF #terrible) to +17% YTD leading most things in absolute return space which I highly doubt will be trumpeted more than “the S&P is up” (+0.5% YTD) all day today (into month-end markups)"

 

 

So here's what's working:

 


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