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Cartoon of the Day: Tough Times In Tokyo

Cartoon of the Day: Tough Times In Tokyo  - Japan cartoon 05.02.2016

 

Japan's Nikkei is down -23% from its high in July 2015.


What About ISM Manufacturing? Still Falling

Takeaway: In case you missed it, today's ISM Manufacturing index fell yet again both from its cycle peak and month-over-month.

Here's an abridged transcript and chart on the ISM data from this morning's Real-Time Alerts Live via Hedgeye CEO Keith McCullough: 

 

"That damn data just won’t go up. The ISM data came in at 50.8. That's down versus 51.8 last month. So, to be clear, global growth and industrial growth has not bottomed. All the bottom calling was just a story.

 

A lot of people hoped that these ISM numbers were better, inasmuch as they hoped for better numbers out of Friday’s Consumer Confidence number and Chicago PMI. These indices are not just missing they’re hitting new lows."

 

Click the image below to enlarge

What About ISM Manufacturing? Still Falling - update on ISM manufacturing


5 CHARTS: A Global #GrowthSlowing Checkup

Takeaway: Investors who avoided #GrowthSlowing equity markets nailed it in the past year.

5 CHARTS: A Global #GrowthSlowing Checkup - World Market No 12.16.14 large large

 

Still don't believe U.S. growth is slowing? Nasdaq investors do...

 

 

Meanwhile in Japan, growth has been neutered for decades. Despite the best efforts of BOJ central planners, macro markets continue to crash.

 

Check out the ramp in the Yen...

 

The Nikkei is still in crash mode, even though the BOJ instituted its negative interest rate policy in January

 

 

Speaking of negative interest rates...  

 

Italy's bank-heavy FTSE MIB index remains in crash mode.

 

And finally, peeling back the onion on the recent reflation trade, take a look at a longer-term chart of much-watched Dr. Copper.

 

Does that look bullish for global growth?

 


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INSTANT INSIGHT | Reflation Reversal & How To Play It

INSTANT INSIGHT | Reflation Reversal & How To Play It - Dollar cartoon 04.27.2016 

 

The mother of all reflation trades has inflated equities and commodities off the February lows. Since February 11th, the CRB index of commodities is up 18.8%  while, over that same period, the S&P 500 is up 11.5%.

 

Not so fast.

 

Before buying into the latest permabull narrative that U.S. #GrowthSlowing fears have abated so buy equities now, consider this. Once again, macro markets have already begun letting out some of the rally's hot air. Note: The S&P 500 was down for 4 of the last 6 weeks, meanwhile, net positioning is the most bullish it’s been all year (CFTC data).

 

INSTANT INSIGHT | Reflation Reversal & How To Play It - 05.02.16 Chart

 

So what are we watching? 

 

Top of the list is the U.S. dollar. Here is analysis from Hedgeye CEO Keith McCullough in a note sent to subscribers earlier this morning:

 

"Down Dollar (again) -2.2% last wk (-5.7% YTD) after both the PMI (50.4) and Consumer Confidence #s slowed (again) on Friday; markets are obviously questioning whether Dovish Fed can replace actual growth with some version of stagflation, but USD is signaling immediate-term oversold inasmuch as Gold is signaling overbought."

 

 

How do you play the oversold U.S. Dollar? Well, indirectly at the moment, McCullough says.

 

"Instead of buy USD (not brave enough, yet!), I sent out SELL signals in both Oil (+5.2% last week) and Copper on Friday; both are signaling overbought inasmuch as USD is signaling oversold; Copper $2.31 is an important macro level for the stagflation vs. #Deflation debate; so far longer-term #Deflation is still winning."

 

 

Here's the sell Oil signal in Real-Time Alerts:

 

 

U.S. #GrowthSlowing has been our call for a while now. We're sticking with it.

 

For more, watch the video below in which Hedgeye Senior Macro analyst Darius Dale explains why the U.S. Economy is entering "the most difficult part of the cycle."


CHART OF THE DAY: Bearish Sentiment = Non-Existent

Editor's Note: Below is a brief excerpt and chart from today's Early Look written by Hedgeye CEO Keith McCullough. Click here to learn more.

 

"... Not to be confused with SENTIMENT on long-term US Treasuries where they ramped the net SHORT position (non-commercial CFTC futures & options contracts) in the 10YR last week to -97,876 contracts (-1.5x on a 1yr zscore):

 

  1. SP500 (Index + E-mini) positioning popped to its MOST BULLISH in 2016 at -1,206 contracts = +1.9x (1yr z-score)..."

*Note: +/- 2.0x on a 1yr z-score is considered overbought/oversold

 

CHART OF THE DAY: Bearish Sentiment = Non-Existent - 05.02.16 Chart


REPLAY! This Week On HedgeyeTV

Our deep bench of analysts take to HedgeyeTV every weekday to update subscribers on Hedgeye's high conviction stock ideas and evolving macro trends. Whether it's on The Macro ShowReal-Time Alerts Live or other exclusive live events, HedgeyeTV is always chock full of insight.

 

Below is a taste of the most recent week in HedgeyeTV. (Like what you see? Click here to subscribe for free to our YouTube channel.)

 

Enjoy!   

 

1. McCullough: What If Amazon & Facebook Can’t Go Higher? (4/29/2016)

 

 

In this brief excerpt from The Macro Show, Hedgeye CEO Keith McCullough and Retail analyst Alec Richards respond to a subscriber’s question about whether companies like Amazon and Facebook can continue to prop up equity markets.

 

2. REPLAY | Healthcare Earnings Takeaways: $ATHN $HOLX $MD $ZBH (4/29/2016)

 

 

After a busy week of earnings, our Healthcare analysts Tom Tobin and Andrew Freedman will provide a recap and takeaways of our top ideas athenahealth (ATHN), MEDNAX (MD), Hologic (HOLX) and Zimmer-Biomet (ZBH).

 

3. About Everything | The Surge in Mental Health Services (4/28/2016)

 

 

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.

 

4. Washington On Wall Street: Handicapping the ‘Acela Primary’ (4/26/2016)

 

 

Potomac Research Group Chief Political Strategist JT Taylor joins Hedgeye Director of Research Daryl Jones to discuss today’s so-called "Acela primary" bringing voters to the polls in Pennsylvania, Connecticut, Rhode Island, Maryland and Delaware.

 

5. Can Fed Stop Recessionary Selloff? (4/26/2016)

 

 

In this animated excerpt from The Macro Show, Hedgeye’s Keith McCullough, Darius Dale and Neil Howe respond to a subscriber’s question about whether the Fed can continue propping up the stock market as economic conditions deteriorate and a recession knocks on the door.

 

6. McCullough: You’re ‘Crazy’ Buying Stocks Now (4/25/2016)

 

  

In this brief excerpt from The Macro Show this morning, Hedgeye CEO Keith McCullough explains why he’s not going to be the “crazy one” buying U.S. stocks at this point.


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