I said it back in December, and I’ll remind you again today – if the Fed hikes into a slowdown, they’ll implode (#Deflate) markets.
What should you do with that?
Again, it’s where mean reversions come from that lead false narratives – the 10yr Yield was oversold at 1.70% and bounced… but A) post a GDP print of 0.5%, B) a NFP print of 163k and C) a headline CPI of 1.1% y/y… GROWTH has trumped (pardon the pun) inflation the entire way and I think it will again – this chart is beautifully bearish TREND on growth.
I don’t want to say layup (because I’m a 5'9" hockey player who is bad at hoops), but if you have our GDP, employment, and consumption slow-down view in Q2/Q3, it’s the best spot you’ve had since DEC to buy Utilities (XLU) and short the Financials (XLF and KRE).
Here's the sector breakdown of what's working in 2016... Got Utes yet?
In other words, we can finally get long #GrowthSlowing in a bigger way now.
