Getting Paid? Mr. Market Remains Fond of Growth Bears

Takeaway: The S&P 500 is down 3 straight weeks and down 6 of the last 8 as US Consumption and global growth slows.

Getting Paid? Mr. Market Remains Fond of Growth Bears - bear 2

 

Growth Bears have been getting paid. this may is no exception.

 

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

 

"The Yield Spread smashed to fresh YTD lows last week (10yr minus 2yr = 95bps) keeping the Financials (XLF -4.0% YTD) our fav sector on the short side vs. Utes (XLU +14.1% YTD) our fav on the long side."

 

(We've been the unabashed bulls on the Long Bond via TLT which is up 9% YTD versus flat for the S&P 500.)

 

 

In other words, Utilities (XLU) is the top performing sector year-to-date. We've been recommending it to our subscribers since January.

 

Getting Paid? Mr. Market Remains Fond of Growth Bears - xlu 5 16

 

As growth has continued to slow, there's been an unequivocal bull market in Gold (GLD).

 

  

Meawhile, there are plenty of global #GrowthSlowing barometers out there...

 

Take a look at Italy:

 

 

... And China:

 

 

Here's the global equity drawdown map:

Click image to enlarge

Getting Paid? Mr. Market Remains Fond of Growth Bears - drawdown

 

 

While global growth slows we're sticking with what's worked all year...

  • Utilities (XLU)
  • Gold (GLD)
  • Long Bonds (TLT)

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