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Cartoon of the Day: Yellen & Screamin'

Cartoon of the Day: Yellen & Screamin' - Hawk dove cartoon 06.06.2016

 

The mercurial Fed has pivoted from Hawkish (in December) to Dovish (March/April) to Hawkish (May). With today's speech, market consensus now perceives Yellen & Co. as flipping back to Dovish here in June. Clearly, the Fed is perpetuating a massive amount of volatility in macro markets.


Capital Brief: Clinton's Conundrum ... & Will The GOP Trust Trump?

Takeaway: Clinton's Conundrum, Trusting Trump?, Procrastination Nation

Capital Brief: Clinton's Conundrum ... & Will The GOP Trust Trump? - 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.

CLINTON'S CONUNDRUM

Capital Brief: Clinton's Conundrum ... & Will The GOP Trust Trump? - hillary another

 

Hillary Clinton needs less than 30 delegates to secure the nomination – a sure bet after looking to amass a large chunk of delegates in tomorrow’s primaries in NJ, CA, MT, NJ, NM, ND, and SD. All in, CA remains the biggest prize as Clinton and Bernie Sanders remain neck and neck.

 

If she’s able to edge it out, she’ll hand Sanders a lethal blow – but then what’s in it for Sanders? Sure – he’s corralled and electrified the masses, but his future steps are immensely important. Clinton’s lead in the general election polls over Donald Trump remains slim and when Sanders decides to hang it up – expect Clinton’s numbers to climb – but she’ll need his help getting there.

TRUSTING TRUMP?

Capital Brief: Clinton's Conundrum ... & Will The GOP Trust Trump? - trump pic

 

The Donald Trump trust factor may be the biggest issue facing the Republican party this year and though many Republican leaders have taken their seats aboard the Trump train they know there will be many opportunities for a derailment or two.

 

Senior Republicans are calling Trump’s recent criticism of a Hispanic judge the last straw after promising to make an effort to “lighten” his choice of words when speaking of minorities as Goldwater flashbacks keep them up at nights. If Republicans believe they have a fighting chance this November,  they’ll need to mitigate their trust in Trump to do the right thing – and fast.

PROCRASTINATION NATION

With summer recess nearing and an unfinished budget still looming, Congress returns this week to a full plate. Zika funding has been sitting before Congress for more than three months – House and Senate bills are yet to combine due to political reasons. Puerto Rico is still sinking but sees a glimmer of hope as legislation will hit the Rules Committee later this week, followed by a vote in the House later in the week. With this hanging over Congress’ head, remember – it’s also Appropriations season and we’ve only got five weeks until Congress skips town for a loonnnngg summer recess.


Yikes: Yellen’s Favorite Market Indicator Hits 7-Year Low

 

Hedgeye U.S. macro analyst Christian Drake takes a look at the “Labor Market Conditions Index” which just posted its 5th consecutive month of negative reading (worse since 2009) and what it portends for Fed policy.


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Embarrassing... Fed's Lockhart Completely Changes His Tune In Just 34 Days

Takeaway: A month ago, Atlanta Fed head Dennis Lockhart said a June rate was "a real option." Now, he wants the Fed to "be patient."

Embarrassing... Fed's Lockhart Completely Changes His Tune In Just 34 Days - Fed grasping cartoon 01.14.2015

 

“I don’t personally see a lot of cost to being patient to the July meeting at least,” Atlanta Fed head Dennis Lockhart said today. “I think we can be watchful and see how things develop over the next few weeks.”

 

What a difference a month can make. 

 

Way, way back on May 3, 2016 (a.k.a. a month ago), Lockhart called a June rate hike "a real option."

 

Embarrassing... Fed's Lockhart Completely Changes His Tune In Just 34 Days - lock

Bottom Line?

 

These Fed head guys and gals are getting really silly.

 

 


McCullough: The Most Asymmetric US Corporate Profit Risk (Ever)

 

In this brief excerpt from The Macro Show this morning, Hedgeye CEO Keith McCullough reviews the “Fantasy Island” earnings risk blinding many investors and why second and third quarter earnings for most sectors will be “awful.”

 

Subscribe to The Macro Show today for access to this and all other episodes. 

 

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An Update On The Bond Market, #GrowthSlowing & Yellen's Favorite Indicator

Takeaway: The yield on the 10-yr Treasury crashed on Friday's jobs bomb. Plus, an update on Yellen's favorite labor market indicator doesn't look good

An Update On The Bond Market, #GrowthSlowing & Yellen's Favorite Indicator - yellen yoyo

 

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

 

"The 10-yr Treasury yield crashed on Friday's jobs bomb (that was in line with the change in Janet’s favorite labor market indicator index, more on that below) to 1.71%, which implies that A) the data is beating the Fed’s forecasters, big time, YTD and B) if she hikes into this, she’s going to implode all of the illusions of real growth (i.e. the aforementioned reflation trades)"

 

 

More on Yellen's favorite indicator...

 

The "Labor Market Conditions Index" contracted for the fifth straight month to down -4.8% in May. Meanwhile, the prior month was downwardly revised from -0.9% to -3.4%.

 

In other words, not good. 

 

An Update On The Bond Market, #GrowthSlowing & Yellen's Favorite Indicator - yellen s favorite

 

(For more on how the Fed could interpret all of this, check out "5 Charts: How Last Week's #JobsBomb Is Impacting Global Markets.")


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