prev

CHART OF THE DAY: Brexit: 'Brits Don't Quit!'

Editor's Note: Below is an excerpt and chart from today's Early Look written by Hedgeye Director Matthew Hedrick. Click here to learn more.

 

"... But will Brits actually vote themselves out of the EU?  We’ll reiterate here that we expect the Remain camp to prevail, but as the aggregate “Poll of Polls” below shows, it’s a split race (50/50).  In addition, recent results of individual polls show there’s a very sizable number of undecided voters, representing some 6% to 13%, depending on the poll, who we think will tip the balance marginally to Remain."

 

CHART OF THE DAY: Brexit: 'Brits Don't Quit!' - Brexit EL 1


Cartoon of the Day: Enough Already!

Cartoon of the Day: Enough Already! - Brexit cartoon 06.23.2016

 

It's nauseating how much the mainstream media talks about Thursday's U.K. referendum.


Fact Versus Fiction: Dispelling The Fallacy That Everyone Is Bearish

Takeaway: The most consensus position in macro right now is actually long the S&P 500.

Fact Versus Fiction: Dispelling The Fallacy That Everyone Is Bearish - consensus cartoon 06.21.2016

 

Consensus is as long the S&P 500 as they have been all year.

 

Here’s what Consensus Macro positioning looks like from a CFTC futures and options perspective:

 

  • SP500 (Index + E-mini) net LONG position of +117,566 contracts = +2.63x 1YR z-score

 

For those of you who are new to following us, we measure current macro positioning across multiple durations relative to where the positioning has been in the past. Anything plus or minus 2x tends to be a great contrarian indicator.

 

Fact Versus Fiction: Dispelling The Fallacy That Everyone Is Bearish - macro show consensus pos

 

Watch Hedgeye CEO Keith McCullough explain consensus positioning in the video below:

 


the macro show

what smart investors watch to win

Hosted by Hedgeye CEO Keith McCullough at 9:00am ET, this special online broadcast offers smart investors and traders of all stripes the sharpest insights and clearest market analysis available on Wall Street.

Capital Brief: The Numbers Behind Clinton Vs. Trump (Fundraising & Staffers)

Takeaway: Money Ain't A Thang; General Election Ground Game; Far Worse Than Fundraising; Clinton's Claims

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.

 

Capital Brief: The Numbers Behind Clinton Vs. Trump (Fundraising & Staffers) - JT   Potomac under 1 mb

 

“Status quo, you know, is Latin for 'the mess we're in'.”

― Ronald Reagan

MONEY AIN’T A THANG

Really - it’s not an issue for Donald Trump, but despite claims that he’s worth over $10 billion, the same can’t be said for his campaign. His war chest – if you’d even call it that - currently holds only $1.3 million. That’s about the size of a congressional campaign. Hillary Clinton, on the other hand, has outraised him by a long shot, boasting $42 million in cash, and climbing at an even faster rate than the primary, putting the Republican front-runner on ice with less than five months to go. Recent FEC filings also show that Trump’s campaign has rented his own venues, jets, and hotels, and that Trump continues to loan the campaign money – bringing the total amount of Trump loans to $45.7 million. If Republican pockets aren’t deep enough, Trump promises that he will personally fund his own campaign...

GENERAL ELECTION GROUND GAME

Clinton now holds early leads in four key swing states - FL, VA, MI, WI – further underscoring our point that having an organization really does pay off. If Trump wants to stay in it, he’s going to need boots on the ground – and fast. His campaign currently employs only 69 staffers, while Clinton woefully outnumbers him with 685. Trump boasts that he runs a lean, tight-knit campaign, but that won’t cut it. In states like battleground NC, Clinton employs around 100 staffers, while Trump counts 10. Though, with the race looking tighter in PA and OH, Trump has an opportunity to be competitive in two of the most critical states this fall.

FAR WORSE THAN FUNDRAISING

When all is said and done, it’s not the money, organization, or events that people remember – it’s the message. “Make America Great Again” was a sturdy slogan during primary campaign –  something supporters could hang their hats on - but now, that message appears to be muddled. Though Trump held campaign rallies last week in five states run by Republican Governors (four were potential battleground states - AZ, NV, GA, NC) - not one of them appeared on stage with him. If that doesn’t sound the alarm, then what does?

CLINTON’S CLAIMS

Clinton cautioned voters of a “Trump recession” in a speech on the U.S. economy, implying that electing Trump, “the king of debt,” would send the economy into a tailspin. In a speech outlining what won’t make America great again, Clinton feels that she’ll be the one to unite the nation, moving the U.S. economy into prosperous times like never before. She’s taking her message to Capitol Hill today to strategize with House Democrats, while Trump is expected to counterpunch in a speech to badly-needed donors this afternoon.


Did You Catch Janet Yellen’s ‘Crazy’ Response on Zero Rates?

 

In this brief except from The Macro Show this morning, Hedgeye CEO Keith McCullough weighs in on a head-scratching moment between Fed chair Janet Yellen and Sen. Pat Toomey (R-PA) during her testimony before the Senate Banking Committee.


The Astonishing Audacity Of Central Planners

The Astonishing Audacity Of Central Planners - central bank cartoon 04.22.2016

 

It's shaping up to be quite a week for central planners.

 

This week we've listened to the hand-wringing of Fed, ECB and BOJ officials. And it's only Wednesday. Here's a brief recap:

 

What was striking about Fed head Janet Yellen's testimony before Congress yesterday was the surprising contrast between fact and fiction.

 

Fiction: “The U.S. economy is doing well,” Yellen said and continued by reiterating her “expectation is that the U.S. economy will continue to grow.”

 

Fact: “Considerable uncertainty about the economic outlook remains,” Yellen continued, saying she was watching persistently low productivity growth, pressure from China's "considerable challenges" economically, Brexit risk, and a "loss of momentum" in the jobs market.

 

Another bit of fiction. Yellen made sure to underscore that this jobs market weakness was "not a deterioration." It was likely "transitory," she said.

 

Not true.

 

As Hedgeye CEO Keith McCullough pointed out in this morning's Early Look, Yellen was asked directly about her favorite labor market indicator, the Change in Labor Market Conditions Index, being negative on an absolute basis for 5 months in a row. She responded with an answer about the importance of “levels" in which she essentially suggested that the rate of change wasn't important.

 

That's sad because, in addition to Yellen's favorite indicator rolling over, the rate of change in jobs growth is rolling over too. Proof? Take a look at the chart below. Non-farm payroll growth has been "deteriorating" since February 2015.

 

The Astonishing Audacity Of Central Planners - employment 5 6

 

In other central planning news...

 

On Tuesday, ECB head Mario Draghi, said that European policymakers "stand ready" to act in the event of a Brexit vote. 

 

  • “In particular, the ECB is ready for all contingencies following the U.K.’s EU referendum,” Draghi said.
  • During the Q&A, Draghi explained, "It would be difficult to speculate about one outcome [but] we’re trying to be ready to cope with all possible contingencies.”

 

In other words, fire up the helicopter?

 

The Astonishing Audacity Of Central Planners - Helicopter money 05.20.2016

 

Rounding out the central planning trifecta...

 

Yesterday, Bloomberg report that sources familiar with Japan's Ministry of Finance had ruled out unilateral intervention in the event of a Brexit surge in the yen. More likely, sources said, would be a joint intervention via the G7:

 

"This time, the G-7 probably would issue a statement to address any turmoil on Friday, and if there were joint intervention it would probably make that public, according to the people familiar with the talks. The G-7’s last joint currency intervention was in the wake of the 2011 Japan quake, when a statement was issued."

 

Meanwhile, BOJ Governor Haruhiko Kuroda (who was at the Ministry of Finance from 1999 to 2003) has warned about the "big" impact that currency gains could have on Japan’s inflation. On Monday, Kuroda said that the BOJ stands ready to add stimulus if needed.

 

But what makes policymakers so sure the intervention would be successful? The yen is up 13% this year despite the BOJ's negative interest rate policy and all the jawboning out of the Ministry of Finance.

 

The Astonishing Audacity Of Central Planners - usdjpy

 

As flummoxed central planners all over the world continue to flounder amidst stagnating economic growth, we continue to reiterate that the central planning #BeliefSystem is breaking down.

More to come.


get free cartoon of the day!

Start receiving Hedgeye's Cartoon of the Day, an exclusive and humourous take on the market and the economy, delivered every morning to your inbox

By joining our email marketing list you agree to receive marketing emails from Hedgeye. You may unsubscribe at any time by clicking the unsubscribe link in one of the emails.

next