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5 Worrisome Charts Via Financials Analyst Jonathan Casteleyn

Takeaway: Two words .. be careful.

5 Worrisome Charts Via Financials Analyst Jonathan Casteleyn - Bull SCREAM 01.06.2015

 

Below are five charts and brief analysis from Hedgeye Financials analyst Jonathan Casteleyn.  Spoiler Alert ... all is not well in credit markets, equities and the U.S. economy.

 

You can follow him on Twitter @hedgeyeJC.

Click on Each chart to enlarge

#1

Global growth is on fire for sure!

 

5 Worrisome Charts Via Financials Analyst Jonathan Casteleyn - JC bond yields 

 

#2

S&P 500 earnings to be up +11% for 2018? Giddy up (not)!

 

5 Worrisome Charts Via Financials Analyst Jonathan Casteleyn - JC s p earnings expec

 

#3

Upgrade to Downgrade ratios in corporate credit has ALWAYS lead equity prices and the ratio is declining again

 

5 Worrisome Charts Via Financials Analyst Jonathan Casteleyn - JC upgrade downgrade ratio

 

#4

The current short squeeze in EM stocks is right within the +20% gain which has happened 8 times since '11

 

5 Worrisome Charts Via Financials Analyst Jonathan Casteleyn - JC EM

 

#5

U.S. distressed rates lead defaults and the distressed category is again breaking out for a new bankruptcy cycle

 

5 Worrisome Charts Via Financials Analyst Jonathan Casteleyn - JC default


U.S. Economy Enters Most Difficult Part of Cycle

 

In this brief excerpt from The Macro Show, Hedgeye Senior Macro analyst Darius Dale discusses how the U.S. economy has entered the toughest part of the cycle and why our growth estimate remains so bearish.


Reading Between The Lines: China's Cryptic Commentary

Reading Between The Lines: China's Cryptic Commentary - China growth cartoon 11.19.2015

 

Truth out of China? 

 

If only the truth were black and white.

 

Here's analysis in a note sent to subscribers this morning in which our Macro team pieces together recent comments from the PBoC and the country's state-owned news agency Xinhua to arrive at some interesting conclusions:

 

"The Shanghai Composite Index dropped -2.3% overnight despite the PBoC injecting 250B of liquidity into the banking system, which represents the largest such injection since February 26th. Weighing on sentiment was a Xinhua report that monetary policy will likely be more prudent in 2016 than it was last year, according to sources close to the PBoC, as well as PBoC Chief Economist Ma Jun commentary about future monetary policy needing to guard against financial risks.

 

With Chinese corporate leverage high and getting higher (166% of GDP) and property prices running up 30% YoY in first tier cities, we expect the PBoC to rein in the liquidity provision meaningfully from here now that economic stabilization is in the rear view mirror."

 

More from China's state-owned news agency Xinhua:

 

"China will continue to implement a prudent monetary policy this year, and, in the context of the economic slowdown, top officials have described the prudent policy as one 'with a slight easing bias.'

 

As the economy is yet to fully restore its strength, China will not shy away from using the ample tools at its disposal to bolster the economy. But it will be more careful to prevent the easing from going too far."

 

HEADS UP!


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CHART OF THE DAY: What More Can Fed Jawboning Accomplish?

Editor's Note: Below is a brief excerpt and chart from today's Early Look written by Hedgeye Senior Macro analyst Darius Dale. Click here to learn more.

 

"... With respect to Equities: Simply put, we do not think Janet Yellen can authorize QE4 without another leg down in domestic credit and equity markets – which, if prescient, calls into question the sustainability of this rally. As such, we believe the late-cycle sectors (i.e. Financials, Healthcare and Consumer Retail) are in the earlier innings of pricing in the depths of the cycle, while reflation sectors have clearly priced in some version of approaching the ninth inning; it’s not at all clear that the latter sectors will make lower-lows on the next leg down. Given our bearish outlook for the domestic equity market from here, we still want to be short the opposite of our preferred style factors on the long side – i.e. low beta, high quality, capital return stories like GIS and MCD."

 

CHART OF THE DAY: What More Can Fed Jawboning Accomplish? - Chart of the Day 4 20


Eye on Earnings: Brinker International $EAT

 

Hedgeye's Restaurants team shares their three conclusions from Brinker's earnings report.


Cartoon of the Day: A Holy Mess

Cartoon of the Day: A Holy Mess - Brazil cartoon 04.19.2016

 

Amid the impeachment process of Brazilian President Rouseff, Brazil's Bovespa Index is up +39.4% over the past 3 months. Setting aside widespread corruption in the country, Hedgeye Senior Macro analyst Darius Dale had this to say about Brazil in this morning's Early Look, "We think Brazilian capital and currency markets are priced to perfection and anticipate another flush down alongside other reflation assets over the intermediate term."


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