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About Everything | The Surge in Mental Health Services

 

In this complimentary edition of About Everything, renowned demographer and Hedgeye Sector Head Neil Howe discusses why "mental health services spending is riding a long-term attitudinal shift that has brought mental health issues out into the open." Howe explains why it's happening and explores the broader societal and investing implications.

 

Click here to read Howe’s associated About Everything piece.


Who Do You Believe? Consensus GDP Estimates or Hedgeye?

Takeaway: Wall Street consensus has been consistently out to lunch on U.S. growth slowing, as our bearish expectations continue to play out.

Who Do You Believe? Consensus GDP Estimates or Hedgeye? - growth  cartoon 04.05.2016

 

The Hedgeye Macro team has been predicting dour U.S. economic growth for over a year. Our contrarian economic call has been pretty close to spot on. Meanwhile, this #GrowthSlowing reality has consistently confounded Wall Street consensus.

 

As you can see in the chart below, Wall Street economists were predicting almost 3% growth for Q1 2016 last April. 

 

To be clear, Old Wall consensus was forced to ratchet back its inflated estimate to 2.5% in February 2016 ... all the way down to 1.1% most recently. Of course, the initial Q1 GDP reading today came in at 0.5%. That surprised even us to the downside, as we have been predicting 1%. 

 

Who Do You Believe? Consensus GDP Estimates or Hedgeye? - Q1 Wall Street GDP

 

Will this slowdown persist?

 

Wall Street doesn't think so. The consensus estimate for Q2 2016 is a (drum roll please)...

2.3% 

 

Meanwhile, here at Hedgeye we're predicting 0.3%

 

Who do you believe?

 

Watch Hedgeye Senior Macro analyst Darius Dale explain why we're so bearish in the video below:

 


We Called U.S. Growth Slowdown (And Believe The Worst Is Yet To Come)

Takeaway: We warned our subscribers about #GrowthSlowing well before the rest of the street. We think it gets worse from here.

0.5%

 

We Called U.S. Growth Slowdown (And Believe The Worst Is Yet To Come) - GDP cartoon 04.26.2016

 

You've heard and read all the Wall Street hand-wringing and Fed jawboning that U.S. growth is just fine...nothing to worry about... maybe even accelerating?!... well it's not, and we've been consistently warning subscribers otherwise. Today's GDP report coming in at 0.5% for Q1 2016 confirms our Macro team's call. 

 

Hang on, though. We're sticking with it. In fact, we believe the most difficult quarters for U.S. growth are yet to come. For more insight, check out the three videos below featuring Hedgeye CEO Keith McCullough and Senior Macro analyst Darius Dale.  

 

1. U.S. Economy Enters Most Difficult Part of Cycle (4/20/16)

 

 

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.

 

2. Barron’s: ‘3% Growth, No Recession’ … LOL (2/22/16)

 

 

In this animated excerpt of The Macro Show, Hedgeye CEO Keith McCullough and Senior Macro analyst Darius Dale discuss why Barron’s is wrong on U.S. economic growth and why Q1 2016 GDP report will have a “0” in front of it.

 

3. The U.S. Economic Outlook In 2016? Not Good (12/28/15)

 

 

In this brief excerpt from The Macro Show last week, Hedgeye CEO Keith McCullough and Senior Macro analyst Darius Dale discuss U.S. third quarter GDP and why our non-consensus 2016 growth outlook is looking grim.


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CHART OF THE DAY: A Review Of Crowded 'Dovish Fed' Positioning

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

 

"... We strongly believe that investor sentiment is overwhelmingly skewed towards a dovish Fed and, as a result, positioning has become rather crowded on the bearish side of the USD and on the bullish side of reflation, in relative terms. Said differently, in one way or another, most investors have already positioned their portfolios for a dovish Fed.

 

So who is the marginal buyer of risk assets from here?" 

 

CHART OF THE DAY: A Review Of Crowded 'Dovish Fed' Positioning - 4 28 Chart of the Day


The Key Takeaways From Today's Fed Statement

Takeaway: "Interestingly, this might be the most in line with Hedgeye's research outlook the Fed has been since spring of 2013 when we were bullish."

The Key Takeaways From Today's Fed Statement - Fed lady cartoon 06.25.2016

 

My take on the initial market read through directly following today's Fed announcement?

 

NO ONE knows what the "F" to do. It's total pandemonium out here. Do we buy or sell the USD? Do we buy or sell Treasuries? How about stocks?

 

The chart below offers a nice picture of all the confusion created by today's Fed statement:

 

The Key Takeaways From Today's Fed Statement - dale jpy currency

 

Notwithstanding the initial market reaction, our reading of the FOMC statement is:

 

  1. U.S. Recession risk is rising
  2. Weak Dollar reflates EM

 

Interestingly enough, this might be the most in line with Hedgeye's research outlook the Fed has been since spring of 2013 when we were wildly bullish. The Fed acknowledged our #GrowthSlowing view -- which itself is actually about to get a lot worse.

 

(Note the sea of red in our compendium of U.S. economic data below)

 

CLICK Text TO ENLARGE.

The Key Takeaways From Today's Fed Statement - dale eco data

 

In fact, the entire first paragraph of the FOMC statement reads like the economy is headed into #Quad4 led by the consumer:

 

Click the image below to enlarge.

The Key Takeaways From Today's Fed Statement - dale fed paragraph

 

so ... now what?

 

A follower of mine on Twitter remarked that Fed potency is waning and next up would be QE4. I agree, but you're not going to get QE4 without first having another "flush." Furthermore, we've always maintained that if the Fed pivots too bearish on the U.S., it will freak investors out as it always has:

 

CLICK TO ENLARGE.

The Key Takeaways From Today's Fed Statement - dale fed

 

 

some simple advice for investors... 

 

 

Want more? Watch Darius and Hedgeye CEO Keith McCullough in the new video below.


Cartoon of the Day: Choppy Waters

Cartoon of the Day: Choppy Waters - Dollar cartoon 04.27.2016

 

Permabulls are desperately hoping and praying that a dovish Janet Yellen will continue devaluing the U.S. Dollar to keep propping up stocks.


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