The most consensus macro position right now is long the S&P 500.
Takeaway: Clinton Courts Millennials; Trump Turnaround Part Four; Warren Warnings
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 email@example.com.
“Divide and rule, a sound motto. Unite and lead, a better one.”
― Johann Wolfgang von Goethe
Now that Hillary Clinton has sidelined Bernie Sanders, she’s making a play for some of his most diehard supporters - millennials. The first of many Sanders staffers joined Clinton’s camp with the main objective of corralling and converting college students. More importantly, though, are the ongoing talks between both campaigns regarding how to best deploy Sanders as a Clinton surrogate later this year.
Millennials rallied behind Sanders because they were inspired by his vision for change and political revolution. Clinton must determine where she too can foster change and promote those policies. For Clinton, targeting young voters is a critical element in unifying the part of the party’s base that turned out in record numbers to put Obama into the White House in ’08 and then again in ’12. Keep snapping those selfies, H.
One of Donald Trump’s first campaign hires, Corey Lewandowski, has departed amidst chaos in the Trump campaign following two particularly bad weeks. Firing your campaign manager five months out from Election Day is usually not the sign of a winning campaign. Trump needs to use this moment to change course and pivot away from the missteps and the resulting criticism his campaign has endured. He’ll likely pin the blame on Lewandowski and move on – hopefully for the Republican party - with a fresh approach.
With his recent decline in national polls, and Hillary Clinton’s barrage of attack ads, change is a must – but whether it will actually occur is the real question. Trump now finds himself in an even bigger rut, lacking staff, organization and most importantly money - he has less cash-on-hand than Ted Cruz - and he dropped out of the race six weeks ago.
Wall Street has a clear message for Clinton – don’t pick Senator Elizabeth Warren (MA) as your veep if you want our money. Harsh, but true. Warren’s war on Wall Street has been one of the largest political battles any sector has withstood in recent years. She was the driving force behind the CFPB and wants to break up big banks - even the mere mention of her name draws groans from the pinstriped crowd. Clinton is flirting with the left in her courtship of Bernie Sanders’ supporters – which Wall Street can stomach – but if she goes at it with Warren, she can kiss those checks goodbye.
During testimony before Congress today, Fed head Janet Yellen said she saw a "loss of momentum, not a deterioration" in the jobs market. That's funny because the Fed chair's favorite economic indicator (the "Change in Labor Market Conditions Index") registered its lowest readings since June 2009 and has deteriorated now for the past five months.
We've written before that employment growth is past peak and slowing. Nothing Janet Yellen said changes that today.
For additional analysis, watch Hedgeye U.S. macro analyst Christian Drake in the video below:
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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.
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.
Takeaway: European growth is still slowing. The Spanish IBEX is down -27% from its cycle high of 2015.
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."
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