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A Few Brief Thoughts On Janet Yellen's Speech Today

Takeaway: The probability is rising that Janet makes her 2nd policy mistake (raising into a slow-down) in 8 months.

A Few Brief Thoughts On Janet Yellen's Speech Today - rate hike cartoon 12.04.2015


I just spent the last 30 minutes in the car listening to maybe the most complacent recap of Fed forecasting risk yet. Today Janet sounded as hawkish as she's been (mainly because her assessment of the economy is as off as it's been). Here's what she said:


“It’s appropriate, and I’ve said this in the past I think, for the Fed to gradually and cautiously increase our overnight interest rate over time, and probably in the coming months such a move would be appropriate."


In other words, the probability is rising that Janet makes her 2nd policy mistake (raising into a slow-down) in 8 months. 


You go rate hike pro – you go.


A Few Brief Thoughts On Janet Yellen's Speech Today - Rate hike cartoon 11.30.2015


The biggest risk to both markets and the country remains the Fed's forecast. With a "0" in front of GDP and S&P earnings growth down -8.5% y/y, should the Federal Reserve raise rates in June? 


I'll let you be the judge of that but consider this: If the US Government used the Fed's prefered measure of inflation, US GDP would have been NEGATIVE in Q1.


If you didn't listen to Hedgeye and sold on the last policy (hike) mistake in December, you're being advised to listen now.


Hillary's Headache... Trump's Triumph... & Why $50 Oil Creates Tension At Next Week's OPEC Meeting

Takeaway: Hillary's Headache, Trump Triumphs; Bernie v. Donald?; OPEC

Hillary's Headache... Trump's Triumph... & Why $50 Oil Creates Tension At Next Week's OPEC Meeting - capital brief


Editor's Note: Below is a brief excerpt from Hedgeye Potomac Chief Political Strategist JT Taylor's Capital Brief sent to institutional clients each morning. For more information on how you can access our institutional research please email sales@hedgeye.com.


Hillary's Headache... Trump's Triumph... & Why $50 Oil Creates Tension At Next Week's OPEC Meeting - hillary clinton 44


The State Department’s IG released an in-depth report regarding Hillary Clinton’s controversial email use when she was Secretary of State. The report comes as Clinton continues to struggle with trust and favorability numbers. Although Clinton did not break any laws, it’s clear that she didn’t follow the rules. Despite her confidence moving forward, the controversy will continue to saddle her throughout her campaign - and if that doesn’t give one a big enough headache - the FBI is conducting a criminal investigation that could result in the DOJ pressing formal charges.  Did you hear that roar coming from Trump Tower?


Hillary's Headache... Trump's Triumph... & Why $50 Oil Creates Tension At Next Week's OPEC Meeting - trump 7


Well, it’s official. Donald J. Trump is the official Republican nominee garnering enough delegates to secure his spot on the ballot come November. Although Trump has surpassed the amount of delegates needed to win the nomination outright, look for Senators Ted Cruz and Marco Rubio, and Governor John Kasich to play roles in this year’s convention agenda as they attempt to leverage their respective delegates.


Another primary debate is the last thing this country needs, but what if it’s between two diametrically opposed candidates (with a few exceptions) - one who has his nomination locked up and the other who doesn’t and won’t?  Sure, we’ll tune in. Bernie and the Donald are considering debating each other on the main stage ahead of the CA primary on June 7.  Now for two minutes ponder all of the issues that will come to the fore. In our opinion, Sanders has an opportunity to inflict more damage given that “he’ll do everything to defeat Donald Trump” hence softening him up for Hillary - or will it backfire and end up hurting her?

Why $50 Oil Creates Tension At Next Week's OPEC Meeting

Oil bulls are no doubt pleased that oil passed the $50 threshold on Thursday but the recent rally may create tension at the June 2 OPEC meeting. Our colleague Joe McMonigle departs tonight for Vienna to attend various pre-meeting salons and the meeting on Thursday. Joe will write notes from Vienna and hold a client call on Wednesday, June 1 to provides the latest updates.


While the rally is certainly welcome news for many OPEC members, Joe believes the Saudis see the price rebound as premature serving as a lifeline for US shale production. Stay tuned for daily reports on OPEC week in Vienna from Hedgeye in the bullets.

Cartoon of the Day: The Writing On The Wall

Cartoon of the Day: The Writing On The Wall - Bull case cartoon May 2016


With a "0" in front of GDP and S&P 500 earnings growth -8.5% year-over-year, the writing is on the wall for investors.

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The Good Stuff: Reports and News Articles you May Have Missed This Week

Takeaway: The best of the best: our favorite reading material from the week of May 23rd.

Welcome to the long weekend! Need a little poolside media? Below is our list of the week's most interesting articles on healthcare and a little Maren Morris to rock you through them.


Clinical Labs

Stealth Research and Theranos, JAMA, May 18, 2016



Long-dreaded Superbug Found in Human and Animal in US, Phenomena, May 26, 2016


Health Care Services:  

Memorial Sloan Kettering is blown away by response to Humans of New York's campaign, Crains, May 20, 2016

Moving Patient Payment Upfront, Modern Healthcare, May 21, 2016

Veterans Affairs Health Care System is trying a partnership with CVS to offer urgent care to vets, Healthcare Finance News, May 25, 2016 <CVS>

Medicare boss is spearheading changes to the way doctors get paid, San Francisco Chronicle, May 26, 2016


Health Care IT

The IT holy grail remains out of policymakers' hands, Modern Healthcare, May 26, 2016 <ATHN> <CERN>

Health care payment auditing company goes public, Modern Healthcare, May 26, 2016 <COTV>



Anthem and Cigna privately bicker as they seek merger approval, WSJ, May 22, 2016 <ATHM> <CI>

Uninsurance Rates and the Affordable Care Act, May 23, 2016 Health Affairs <All Insurers>


Random Miscellany

Sorry, There's Nothing Magical About Breakfast, NYT, May 23, 2016


Shameless Sell Promotion

REPLAY: Post-Acute Providers - A Review of Major Regulatory Trends, May 27, 2016

Hillary's Headache, Trump Triumphs; Bernie v. Donald?, May 27, 2016

UPDATE: CMS's Part B Drug Demo Sidelined 'til 2019, May 24, 2016



A very Happy Friday and, as we so infrequently get to say, Happy Monday too. Let's remember the people that fought the good fight. Can I get a Hallelujah?






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The Energy Election: Trump Provides More Clues on Energy Priorities in North Dakota Speech

Takeaway: Energy policy will play a prominent role in the 2016 presidential election.

The Energy Election: Trump Provides More Clues on Energy Priorities in North Dakota Speech - trump 44


Energy promises to play a big role in the 2016 presidential election and will provide sharp contrasts between the candidates on energy policies. The November election will be a key catalyst on several issues of interest to investors. This is the first in a series of client notes on The Energy Election.


As with most issues, Donald Trump has not provided much if any details on his energy policies to date. There is no energy plan on his campaign web site so we have been left with some campaign trail rhetoric with some snippets in press interviews and tweets.


Today we got a little more visibility on Trump’s energy policies during the candidate’s speech to the annual Williston Petroleum Conference in North Dakota. It was an important venue and the home state of Trump energy advisor - Congressman Kevin Cramer.


While the speech was still lacking details, it likely provided some reassurance to those in the oil, natural gas and coal sectors.

HOLX: Adding Hologic to Investing Ideas (Short Side)

Takeaway: We are adding Hologic to Investing Ideas today.

Editor's Note: Please note that Healthcare analyst Tom Tobin will send out a full report outlining our high-conviction short thesis next week. In the meantime, below is a brief summary of our thesis sent today by Hedgeye CEO Keith McCullough in Real-Time Alerts.


HOLX: Adding Hologic to Investing Ideas (Short Side) - hologic


Healthcare stocks have been some of the worst performers in the US stock market in 2016. This should surprise no one who shares our #LateCycle view. Some sub-sectors of the Healthcare economy are as late cycle as late cycle gets.


A Healthcare stock we used to like (when the cycle was a tailwind) is Hologic (HOLX). Now, with #TheCycle as a headwind, Tom Tobin likes it on the short side. In his latest Institutional Subscriber note he pointed out the following:


"We have made no change in s-curve which forecasts declines in late 2016 and into 2017.  We listened to the BofA presentation by CEO Steve MacMillan yesterday.  We were interested to hear more commentary regarding deceleration in 2017,  which sounded incremental and consistent with our view. Additionally, while we expect gross margins to turn lower as a result of declines in 3D product revenue, we were interested in MacMillan's comment that there remains opportunity to drive gross margins higher from here, which we don't expect to happen given lower mix of 3D system sales. One point of disagreement may also be a misunderstanding the use of the word "peak" when speaking about 3D adoption. We would definitely disagree that the peak will occur in 2017 as MacMillan stated yesterday. Our data and view suggests we will see the peak in June 2016."


Buying at cycle peaks can be disastrous,



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