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A Brief History Of The #CreditCycle via Hedgeye's Darius Dale

Takeaway: "We are loudly reiterating our call that the unwind of ZIRP and QE will continue to deflate the easy money credit boom it fabricated..."

A Brief History Of The #CreditCycle via Hedgeye's Darius Dale - Fed cartoon 10.24.2014 large

 

Below is an essential risk management chart via Hedgeye Senior Macro analyst Darius Dale. Here's the key callout on the #CreditCycle from our quarterly Macro Themes deck:

 

"We are loudly reiterating our call that the unwind of ZIRP and QE will continue to deflate the easy money credit boom it fabricated in the form of continued recessionary earnings growth as the business cycle gets dangerously long in the tooth."

 

Click image to enlarge. 

A Brief History Of The #CreditCycle via Hedgeye's Darius Dale - delinquencies rising


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

 

CLICK TO ENLARGE

 

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


Daily Trading Ranges

20 Proprietary Risk Ranges

Daily Trading Ranges is designed to help you understand where you’re buying and selling within the risk range and help you make better sales at the top end of the range and purchases at the low end.

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


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.


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