Dispelling Another Wall Street Fairy Tale: "Global Demand Has Bottomed"

Takeaway: Evidence of #GrowthSlowing? Japanese and German equity markets are tumbling and the 10yr/2yr Treasury yield spread is pancaking.

Dispelling Another Wall Street Fairy Tale: "Global Demand Has Bottomed" - growth escalator cartoon 04.29.2016


We've been hearing for a while now, from various pundits and prognosticators, that "global demand has bottomed." The problem with that argument is that it just isn't born out by the facts. 


Setting aside that economic indicators around the world are rolling over, simply looking at the massive drawdowns in global equity markets could satisfy even a casual observer's curiousity that all is not well.


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


"I know. When trying weave the “global demand has bottomed” narrative about US stocks, you have to ex-out things like Japanese and German Equities (and their bond yields hitting all time lows) – small details I’m sure, but both Nikkei and DAX down another -1% today and down -20% and -19%, respectively, from last year’s highs."


Take a look at the Nikkei...



And Germany's DAX...



Clearly, global demand has not bottomed...


Here's the most obvious #GrowthSlowing indicator. The 10yr to 2yr Treasury yield spread is pancaking, with the yield on the 10yr at 1.669% this morning.


Dispelling Another Wall Street Fairy Tale: "Global Demand Has Bottomed" - yield spread 6 9 16


More to be revealed.


(FYI: Our biggest Macro call, Long Bonds (TLT) is breaking out to new highs today.)

Daily Market Data Dump: Thursday

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




Daily Market Data Dump: Thursday - equity markets 6 9


Daily Market Data Dump: Thursday - sector performance 6 9


Daily Market Data Dump: Thursday - volume 6 9


Daily Market Data Dump: Thursday - rates and spreads 6 9


Daily Market Data Dump: Thursday - currencies 6 9

CHART OF THE DAY: When US Corporate Profit Growth Is Negative S&P 500 Does This...

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.


"... As you know, 100% of the time that US corporate profits slow to negative (year-over-year), the SP500 has had a draw-down (crash) of 20% or more. We’re about to see the 3rd consecutive quarter of a US #ProfitRecession. And Q3 of 2016 will probably be the 4th."


CHART OF THE DAY: When US Corporate Profit Growth Is Negative S&P 500 Does This... - 06.09.16 EL Chart

Early Look

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Relied upon by big institutional and individual investors across the world, this granular morning newsletter distills the latest and most vital market developments and insures that you are always in the know.

About Everything | Q&A with Neil Howe: The Bullish Case for Life Insurance


In this complimentary edition of About Everything, Hedgeye Managing Director Neil Howe discusses why life insurance company shares have been beaten down since the Great Recession, but makes the case for their comeback. "Looking forward, there are a lot of positive trends at play. Gen Xers are waking up late to save for retirement, while risk-averse Millennials are trying to prepare early, promising to drive demand steadily upward for decades to come," Howe writes.


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


Click here to access the associated slides.

Cartoon of the Day: Squirrelly

Cartoon of the Day: Squirrelly - S P 500 cartoon 06.08.2016


This one speaks for itself.

Capital Brief: What Clinton's California Win Means For The Democratic Party

Takeaway: Golden State Warrior, Bernie Weakened; A Better Way

Capital Brief: What Clinton's California Win Means For The Democratic Party - 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


Capital Brief: What Clinton's California Win Means For The Democratic Party - hillary lates


With wins in CA, NJ, SD and NM last night, Hillary Clinton has now fully assumed the mantle of presumptive Democratic nominee. She has been victorious in a majority of the primaries, garnered three million more votes than her opponents, has 2,497 pledged delegates to Bernie Sanders’ 1,663, and has 571 superdelegates to Sanders’ 48. The party will now begin to unify around her with a popular president by her side as she moves into the next phase of her campaign. She and her allies will continue to define and dismantle Donald Trump and his policies.


Priorities USA, a pro-Clinton super PAC, has allocated $20 million for an ad buy against Trump – building on her effective foreign policy speech last week pegging him as unfit to be president. Clinton will also need to reassess her trust and likeability factors – repairing and retooling her image will be critical - it will become her advantage when voters decide the “lesser of two evils.”



Bernie Sanders is all but out of the race – but that doesn’t mean he’s dropping out...In order to be viable for the nomination at this juncture - Sanders’ only option is to flip superdelegates – something that remains completely unrealistic (he’s flipped one in six months). He and some in his inner circle have been hard-pressed to accept his fate, but nonetheless he says he will not relent until the convention. With Minority Leader Nancy Pelosi’s endorsement of Clinton and President Obama’s expected soon, Sanders risks becoming a pariah in his party the longer he holds out.


Speaker Ryan rolled out a wide-ranging conservative agenda just a few weeks ahead of the Republican convention in July. The product of several task forces and dozens of meetings with House members outlines conservative proposals for jobs and the economy, taxes, health care, national security, constitutional authority, and poverty. The plan is a byproduct  of the autopsy of the failed 2012 Romney campaign as well as Ryan’s vision for an optimistic agenda for his Congressional colleagues and the party writ large. Ultimately, in the face of Trump terrorizing the party – the proposal gives Republicans a platform to run on in the fall, trying to put the Republican party back on track.

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