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McCullough: The Most Consensus Macro Position Right Now May Surprise You

In this brief excerpt from The Macro Show earlier today, Hedgeye CEO Keith McCullough discusses consensus positioning and explains why the S&P 500 is now the most overbought position in all of macro.


Daily Market Data Dump: Tuesday

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

 

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Daily Market Data Dump: Tuesday - equity markets 6 21

 

Daily Market Data Dump: Tuesday - sector performance 6 21

 

Daily Market Data Dump: Tuesday - volume 6 21

 

Daily Market Data Dump: Tuesday - rates and spreads 6 21

 

Daily Market Data Dump: Tuesday - currencies 6 21


RTA Live: June 21, 2016


CRASHING: (S)pain Trade

Takeaway: European growth is still slowing. The Spanish IBEX is down -27% from its cycle high of 2015.

CRASHING: (S)pain Trade - Spain pain 

While not as sexy as a Brexit headline, the Spanish election is heating up (voting begins on June 26th). Investors should be weary. Polls show that left-wing parties could come close to a parliamentary majority.

 

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

 

"SPAIN – Brexit is newsier, but this Spanish Election (June 26) still matters – as does European #GrowthSlowing; Spain’s IBEX -0.15% after the 1-day bear market bounce remains in crash mode -27% from #TheCycle highs of 2015."

 


Dr. Copper's Diagnosis? Global #GrowthSlowing

Takeaway: Copper #Deflation resumes with a -1% decline back to $2.07/lb this morning.

Dr. Copper's Diagnosis? Global #GrowthSlowing - global growth.sick bull cartoon 08.24.2015

 

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

 

"At $1.47 GBP/USD, from an FX market @Hedgeye immediate-term TRADE signal perspective, a Remain vote is priced in. Copper – the Doctor appears to be heading for the exits ahead of the crowd on that; Copper #Deflation resumes with a -1% decline back to $2.07/lb this morning; WTI down -0.9% as Oil Volatility remains around 40."

 


A Remain vote is priced in

Client Talking Points

USD

Pound Up, Dollar Down gave #Reflation the nod to ramp more than most things macro yesterday (CRB Index +1.1% vs. SPY +0.58%), but now the question remains what if my $1.47 signal level is right and they sell Pounds (cover USD) on the “news”?

Copper

The Doctor appears to be heading for the exits ahead of the crowd on that; Copper #Deflation resumes with a -1% decline back to $2.07/lb this morning; WTI down -0.9% as Oil Volatility remains around 40.

Spain

Brexit is newsier, but this Spanish Election (June 26) still matters – as does European #GrowthSlowing; Spain’s IBEX -0.15% after the 1-day bear market bounce remains in crash mode -27% from #TheCycle highs of 2015.

Asset Allocation

CASH US EQUITIES INTL EQUITIES COMMODITIES FIXED INCOME INTL CURRENCIES
6/20/16 64% 4% 0% 10% 18% 4%
6/21/16 62% 4% 0% 10% 20% 4%

Asset Allocation as a % of Max Preferred Exposure

CASH US EQUITIES INTL EQUITIES COMMODITIES FIXED INCOME INTL CURRENCIES
6/20/16 64% 12% 0% 30% 55% 12%
6/21/16 62% 12% 0% 30% 61% 12%
The maximum preferred exposure for cash is 100%. The maximum preferred exposure for each of the other assets classes is 33%.

Top Long Ideas

Company Ticker Sector Duration
TLT

No matter what side of the reflation/deflation trade you’re on, the growth in global demand continues to decelerate on a trending basis. The debate is no longer whether or not growth is slowing. The real debate centers on the policy response and the market reaction to that policy response. While that question presents us with “open the envelope” risk, #GrowthSlowing will continue to be the bull catalyst for U.S. Treasuries whatever the policy response as the slow march to zero yields globally goes on. 

GLD

To sum things up, stay away from the guessing game and stick to what is empirically evident. A stronger USD over the longer term is a probable scenario in our book. We expect the Fed, and all central banks for that matter, will try to combat deflation. That said, global currencies all burning at the same time makes a compelling case for GLD, as gold knows no currency. You can sell it in local currency all over the world. Scary but true.

MCD

There have been rumblings in the news that McDonald's (MCD) 2Q comps have slowed due to the temporary replacement of the 2 for $5 value platform for Monopoly. This has clearly been reflected in the stock as of late, as MCD has underperformed the S&P 500 over the last month.

Despite this near term headwind, we still strongly believe in the long-term story for MCD and remain confident that once they get their value platform right nationally, they will be just fine. In the short to intermediate term, as we wait for a solidified value platform, this recent underperformance represents a great buying opportunity. We remain LONG MCD.

Three for the Road

QUOTE OF THE DAY

"There are no traffic jams along the extra mile."

-Roger Staubach

STAT OF THE DAY

Tom Glavine pitched 22 years in the MLB, his career ERA was 3.54.


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.

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