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McCullough: Expensive? ‘I Love Expensive’

In this brief excerpt from The Macro Show today, Hedgeye CEO Keith McCullough responds to a subscriber’s question about why he’s still bullish on McDonald’s (MCD), Utilities (XLU), and Long Bonds (TLT) even though they are “getting expensive.” 


Daily Market Data Dump: Monday

Takeaway: A closer look at global macro market developments.

Editor's Note: Below are complimentary charts highlighting global equity market developments, S&P 500 sector performance, volume on U.S. stock exchanges, and rates and bond spreads. It's on the house. For more information on how Hedgeye can help you better understand the markets and economy (and stay ahead of consensus) check out our array of investing products

 

CLICK TO ENLARGE

 

Daily Market Data Dump: Monday - equity markets 5 9

 

Daily Market Data Dump: Monday - sector performance 5 9

 

Daily Market Data Dump: Monday - volume 5 9

 

Daily Market Data Dump: Monday - rates and spreads 5 9


The Epic China Crash Continues

Takeaway: Chinese equities descended further into crash mode overnight on unequivocally poor economic data.

The Epic China Crash Continues - China crash cartoon 08.25.2015 large

 

A bullish cabal of investors was quick to call a bottom in China's cooling economy. Well, Chinese equity markets are getting hammered this morning on yet more unsavory economic data.

 

Here's analysis via Hedgeye CEO Keith McCullough in a note sent to subscribers this morning:

 

"China down hard overnight (Shanghai Comp down another -2.8% and -47% from 2015’s high) on terrible export (-1.8% y/y APR vs. +11.5% MAR) and import (-10.9% y/y APR vs. -7.6% MAR) data – we’re not in the everything has “bottomed” camp."

 

 

The China knock-on effect reverberated loudly throughout macro markets...

 

"After getting smoked for a -5.7% loss last week (Dollar Up, Chinese Demand Down), Copper is down another -1.3% this morning to $2.12/lb after failing to make a higher-high than the March “reflation” level of $2.31/lb"

 

 

What does it mean?

 

Despite Wall Street forecasters and Fed bureaucrats proclaiming "all is good" in the global economy, economic reality continues to prove the contrary. We're crystal clear on this...

 

The outlook for global growth remains decidedly bearish.


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CHART OF THE DAY: Where The Big Money Is Made In Macro

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.

 

"... With another rate-of-change #slowing in non-farm payroll (NFP) growth for the month of April at +1.9% (vs. #TheCycle peak of +2.3% in Q1 of 2015), the big money in macro that was made last week was right where it’s been made all year long:

 

  1. Long Bond (TLT) up another +2.1% last week to +8.2% YTD
  2. Utilities (XLU) up another +0.8% last week to +12.8% YTD
  3. Gold up another +0.3% last week to +21.9% YTD"

 

CHART OF THE DAY: Where The Big Money Is Made In Macro - 05.09.16 EL 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!   

 

1An Animated History Of U.S. #GrowthSlowing (5/6/2016)

 

  

In this animated video, Hedgeye CEO Keith McCullough walks through the recent history of the #LateCycleU.S. economy, exploring peak corporate profits in 2014 to today’s lackluster growth.

 

2. MUST-SEE REPLAY | Key Trends in the Restaurant Industry: Speaker Series (5/6/2016)

 

Click here to access the associated slides.

 

Friday, May 6th at 11:00AM ET our Restaurants analysts Howard Penney and Shayne Laidlaw hosted the second installment of our speaker series. On the call, we had Phil Mangieri and Wally Butkus of Restaurant Research, Phil Hofmann BDO USA, LLP and other industry thought leaders who discussed industry trends with key implications for high-conviction companies our Restaurants team covers, like McDonald's (MCD), Wendy's (WEN), Darden Restaurants (DRI) and Yum! Brands (YUM). Click here for speaker bios and more information about the call.

 

3. Trump’s Path To The Presidency (5/6/2016)

 

 

Hedgeye Director of Research Daryl Jones sits down with Hedgeye Potomac Chief Political Strategist JT Taylor to discuss the path forward for the presumptive Republican and Democratic nominees. 

 

4. McCullough Denounces Trump On Dollar (5/6/2016)

 

 

In this brief excerpt from The Macro Show yesterday, Hedgeye CEO Keith McCullough denounces Donald Trump who reportedly said that a strong dollar is a big problem. “If you think a strong dollar is a problem, you’re a jackass,” McCullough said. “Strengthening the purchasing power of the people is the answer.” 

 

5. Gundlach vs. McCullough on Utilities | $XLU (5/5/2016)

 

 

In this brief excerpt from The Macro Show, Hedgeye CEO Keith McCullough discusses why he disagrees with DoubleLine Capital founder Jeffrey Gundlach’s call to short Utilities.

 

6. About Everything: The Great Productivity Slowdown (5/5/2016)

 

 

In this complimentary edition of About Everything, Hedgeye Demography Sector Head Neil Howe explains why the much-debated productivity shortfall – amounting to $3 trillion – is "simply far too vast to pin on mismeasurement." Howe suggests, "It’s time to take the productivity slowdown seriously" and explains the broader implications for investors.

 

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

 

7. McCullough: Why Our GDP Forecasts Are So Accurate (5/4/2016)

 

 

In this special excerpt from The Macro Show this morning, Hedgeye CEO Keith McCullough takes subscribers “behind the curtain” on our quantitative forecasting model and how we interpret and debate evolving economic data.

 

8. Will the Stock Buyback Boom Go Bust? (5/3/2016)

 

 

In this brief excerpt from The Macro Show, Hedgeye Senior Macro analyst Darius Dale responds to a subscriber question about whether “financial engineering” can continue to prop up the stock market.

 

9. McCullough: The Most Important Point I’ll Make Today (5/2/2016)

 

  

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.


This Week In Hedgeye Cartoons

Our cartoonist Bob Rich captures the tenor on Wall Street every weekday in Hedgeye's widely-acclaimed Cartoon of the Day. Below are his five latest cartoons. We hope you enjoy his humor and wit as filtered through Hedgeye's market insights. (Click here to receive our daily cartoon for free.)

 

Enjoy!

 

1. Truth-Challenged China (5/6/2016)

This Week In Hedgeye Cartoons - China cartoon 05.06.2016

 

China's Shanghai Composite Casino was down -2.8% today and is off -44% since the July crash. 

 

2. Stuck (5/5/2016)

This Week In Hedgeye Cartoons - Fed cartoon 05.05.2016

 

What more can the Fed do? A preponderance of economic data is rolling over despite the central planner's best efforts.

 

3. Red, White & Blew It (5/4/2016)

This Week In Hedgeye Cartoons - Fed cartoon 05.04.2016

 

“A rate hike could be appropriate, if the data is as expected," San Francisco Fed Head John Williams remarked yesterday. As Hedgeye CEO Keith McCullough wrote in today's Early Look, "Given that a recently reported GDP of 0.5% isn’t in the area code of “as expected”, I don’t think Williams has a lot of credibility as a Wall Street forecaster."

 

4. Slow Grrrrowth! (5/3/2016)

This Week In Hedgeye Cartoons - growth cartoon 05.03.2016NEW

 

#GrowthSlowing globally (i.e. economic gravity) can’t be fixed by a central market planning #BeliefSystem this time.

 

5. Tough Times In Tokyo (5/2/2016)

This Week In Hedgeye Cartoons - Japan cartoon 05.02.2016

 

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


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