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CHART OF THE DAY: Were You Positioned Properly For Brexit?

Editor's Note: Below is a brief excerpt and chart from today's Early Look written by Hedgeye CEO Keith McCullough. 

 

***Click here to watch our post-Brexit analysis from renowned European economist and market strategist Daniel Lacalle and Hedgeye CEO Keith McCullough in this morning's The Macro Show.

 

"... Do we have you positioned properly for this?

 

  1. Long The Long Bond (TLT)
  2. Long Gold (GLD)
  3. Short SP500 (SPY)

 

Yes. But, again, this is not a day to party. This is a serious day where serious leaders need to step up and have a real conversation about what it is that The People just voted for."

 

CHART OF THE DAY: Were You Positioned Properly For Brexit? - tlt


REPLAY | The Aftermath: Post-Brexit Market Analysis with Keith McCullough & Daniel Lacalle

Takeaway: We opened up The Macro Show for free to the world this morning.

***In light of momentous, market-moving events surrounding Britain's decison to LEAVE the EU ... we opened up the The Macro Show for free this morning. Renowned European economist and market strategist Daniel Lacalle joined Hedgeye CEO Keith McCullough one-on-one to discuss the implications.

CLICK HERE TO WATCH the replay

 

REPLAY | The Aftermath: Post-Brexit Market Analysis with Keith McCullough & Daniel Lacalle - HETV macroshow title Lacalle

 

Lacalle will be LIVE FROM LONDON providing critical insights and takeaways for global investors with Keith. Have a question? We will open up the conversation to live Q&A as we do every weekday morning.

 

A brief overview of what will be covered:

  • The Brexit vote outcome … what it ultimately means for the EU
  • Investing Implications … analysis of global stocks, bonds and currencies
  • What to watch ahead of this weekend’s uncertain Spanish election (and why it matters)

 

Join us live at 9am ET—you don’t want to miss this. 

 

Brief Bio on Daniel Lacalle

Lacalle is a European economist, who previously worked at PIMCO and was a PM at Ecofin Global Oil & Gas Fund and Citadel.  He is the author of Life In The Financial Markets and The Energy World Is Flat and a lecturer for the IE Business School and Master MEMFI at UNED University. He is currently CIO of Madrid-based Tressis Gestion.

CLICK HERE TO WATCH


Cartoon of the Day: Yellen's Flock

Cartoon of the Day: Yellen's Flock - Yellen cartoon 06.23.2016

 

"In what seemed like an exasperating moment for the Fed Chair yesterday, when Senator Pat Toomey (PA) asked Janet Yellen if she’d yet considered that 0% rates might be a bad thing in the years 2017 and beyond… she answered 'No.' Wow," Hedgeye CEO Keith McCullough wrote in a recent Early Look.


Attention Students...

Get The Macro Show and the Early Look now for only $29.95/month – a savings of 57% – with the Hedgeye Student Discount! In addition to those daily macro insights, you'll receive exclusive content tailor-made to augment what you learn in the classroom. Must be a current college or university student to qualify.

The Irony Behind The Fed’s Inflation Target

 

 

In this excerpt from The Macro Show earlier today, Hedgeye U.S. Macro analyst Christian Drake explains why hitting the Fed’s 2% inflation target would be a “tax on consumers” given the rising, inflationary pressures associated with rent inflation.


Capital Brief: Will Sanders Supporters Choose Trump Or Clinton?

Takeaway: Donald, The Disciplined; Can Clinton Compete Countrywide?; Sanders Supporters Still Searching

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: Will Sanders Supporters Choose Trump Or Clinton? - JT   Potomac under 1 mb

 

“He serves his party best who serves the country best.”

Rutherford B. Hayes

DONALD, THE DISCIPLINED

Donald Trump is pressing the reset button with the intention of setting a new tone for his campaign. In his first rebuttal speech to Hillary Clinton’s assault, Trump sharply hit Clinton with distinct blows – labeling her a status-quo candidate and sacking the Clinton Foundation, but also spent time emphasizing his path forward while looking composed, softening his tone, and showing early signs of change…for the most part.

 

There’s no assurance that this disciplined approach will last and we’ve all seen it before - although he did refrain from six scheduled interviews to avoid drowning out his message. But if he’s looking for a lasting way to right the ship, he’ll need to prove that this maneuver will last more than one day to major donors, elected party leaders across the country and the RNC and repair previous ruptures. The move comes in the nick of time as efforts by anti-Trump factions to disrupt the convention are picking up steam.

CAN CLINTON COMPETE COUNTRYWIDE?

To compete in all 50 states, Clinton will need all the help she can get – cue: meeting with House Dems. Her theme was simple - unity. Clinton emphasized the importance of her efforts to unify Democrats in ‘08 following her primary battle and loss to then-Senator Barack Obama, even though her supporters urged her to continue in opposition.

 

Clinton and the Democrats are nowhere close to the circling firing squad the Republicans are facing with Donald Trump, but she still must arduously work to pursue Sanders’ progressive wing of the party. While Sanders had only a fraction of Clinton's support among House Democrats, party leaders are well aware that they will all need Sanders’ supporters come November.

SANDERS SUPPORTERS STILL SEARCHING

While Bernie Sanders vowed to help Clinton defeat Trump in November, he has yet to endorse her - and more importantly - his supporters are still waiting on the sidelines. There is still a lingering distrust of Clinton among the Sanders crowd, viewing her as too establishment-friendly, hawkish, and concluding that she is beholden to too many special interests.

 

Clinton’s scant support among Sanders voters still has the opportunity for growth, but don’t expect it to be easy - many supporters still claim they could never support her - and a whopping 22% of them say they’ll support Trump according to Bloomberg.


INSTANT INSIGHT: Massive Corporate Buybacks, BOJ Firepower & PBoC Central Planning

Takeaway: Corporate Buybacks; U.S. #GrowthSlowing; The Lone BOJ Dissenter; PBoC Central Planning

INSTANT INSIGHT: Massive Corporate Buybacks, BOJ Firepower & PBoC Central Planning - earth

 

Below are a collection of interesting links and insights from today's news with analysis filtered through the Hedgeye macro lens. This installment discusses a recent record for corporate buybacks, U.S. #GrowthSlowing via Bed Bath & Beyond, BOJ central planning and China's yuan policy and shadow stimulus.

 

Enjoy! 

 

The 2nd-Largest Quarter Of Corp Buybacks Ever

"Companies in the S&P 500 spent $161.4 billion buying back shares in the first quarter of 2016, the second-largest amount on record, supporting stock prices amid the index’s early-year drop," the Wall Street Journal reports. Why are companies buying back shares? Simple. "As Earnings Slow, companies lever up and buy back stock to hit EPS targets that determine executive bonuses," Hedgeye CEO Keith McCullough writes.

 

Another U.S. #GrowthSlowing Casualty

"In other news, Bed Bath & Beyond (BBBY) is the latest US #ConsumerSlowing report (post market close)," McCullough wrote. BBBY posted a sales decline and missed earnings estimates as foot traffic slowed and increasing competition from Amazon.com hurt results. 

 

The Lone BOJ Dissenter Rips On Negative Rates

"The additional (positive) effects of quantitative and qualitative easing have been diminishing," Takahide Kiuchi told business leaders at a conference today. "On the other hand, numerous side effects of QQE seem to be increasing steadily," he said. Kiuchi has said before that the BOJ's sustained ultra-low interest rates and the negative rates decision had destabilizing effects on the bond market and hurt the central bank's credibility.

 

In other Japan-related Central Planning News

Is the BOJ holding back its bond buying firepower for after today's Brexit vote? Maybe. Bloomberg reports:

 

"Up to now, the Bank of Japan has tended to conduct bond-purchase operations -- known locally as “rinban” -- on the days following a government auction. Not this time. The Finance Ministry had sold about 400 billion yen ($3.8 billion) of Japanese government bonds with tenors of 20, 30 and 40 years on Friday, but come Monday, the central bank wasn’t buying.”

 

With yields on Japanese government bonds touching record lows last week, perhaps the BOJ is just holding off and letting the market ride for a bit? 

 

China, Yuan & Shadow Stimulus

According to China's state-owned media outlet Xinhua, the People's Bank of China is making strides toward "increas[ing] the investability of the renminbi." A seperate Xinhua article this week explains:

 

"The central bank has stressed that it will stick to market-oriented reforms and increase the yuan's exchange rate flexibility, according to the commentary 'Understand the yuan's fluctuations.'

 

'What needs to be avoided is not fluctuations but possible risks caused by them,' said the article, adding that while risks do exist, there is no basis for long-term depreciation of the yuan.

 

'We should make sound plans to respond to any risks, rather than hesitating over risk concerns,' it read."

 

Another interesting read on China, check out the FT's piece "China deploys state enterprises to economic stimulus effort." Here's the key takeaway from the chart below. Essentially, China's state-owned entities are doing the government's bidding to stimulate its slowing economy.

 

INSTANT INSIGHT: Massive Corporate Buybacks, BOJ Firepower & PBoC Central Planning - china investment

 


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