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Cartoon of the Day: Shot In The FTSE

Cartoon of the Day: Shot In The FTSE - Brexit Footsie cartoon 06.24.2016

 

The Brexit vote has set off a massive wave of selling in global equities. 


McCullough: "Risk Happens Slowly, Then All At Once"

Editor's Note: Below are Hedgeye CEO Keith McCullough's top three bullets from his Macro notebook in a note sent to subscribers earlier this morning.

 

 

1. POUND – not since Black Wednesday (1992) has the UK seen a FX move like this – down -7% vs. USD and one of our favorite ways to be positioned for what the central planners have to try next (devalue more?) remains long Gold +4.5% on the session to $1310 =+24% YTD

 

McCullough: "Risk Happens Slowly, Then All At Once" - gbp usd 

 

2. STOCKS – since the crash in European stocks was already in motion, this is really just an extension of what risk managers should have been proactively preparing for – reiterating the 0% asset allocation to Japanese, European, and Emerging market Equities with stock markets like Spain and Italy down 11%, on the day

 

Here's the FTSE:

 

 

... And the DAX:

 

 

3. BONDS – reiterating our all-time lows in the UST 10yr Yield call as the causal factor behind most of this is #GrowthSlowing – not new because The People rose up against the Establishment and/or being centrally planned by Eurocrats; 1.52% on the 10yr now with an immediate-term risk range of 1.49-1.72%

 

 

(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.)


Fed Rate Hike? Forget It. Rate Cut Probability Rising

Takeaway: Fed funds futures now show a 12% probability of a rate CUT in September.

Fed Rate Hike? Forget It. Rate Cut Probability Rising - rate hike cartoon 11.17.2015

 

The market is saying no Fed rate hike in 2016. In fact, rate cut probabilities just rose (even if just marginally). This is a complete breakdown in the central planning belief system.

 

Take a look at the implied probabilities in Fed Funds futures, 0% chance of cut through November and only 11% through February 2017. Meanwhile, rate cut expectations for September sit at 12%. Just yesterday, markets saw a greater than 50% probability of a hike in December. 

Today

 

Fed Rate Hike? Forget It. Rate Cut Probability Rising - fed prob rate cut

6/23/16

 

Fed Rate Hike? Forget It. Rate Cut Probability Rising - fed rate hike prob 6 24

 

But no worries, right? The Fed has got this. Here's the Fed's post-Brexit statement this morning:

 

"The Federal Reserve is carefully monitoring developments in global financial markets, in cooperation with other central banks, following the results of the U.K. referendum on membership in the European Union. The Federal Reserve is prepared to provide dollar liquidity through its existing swap lines with central banks, as necessary, to address pressures in global funding markets, which could have adverse implications for the U.S. economy."

 

What happens if the market no longer believes that central planners can save the day?

 

We've been saying that for a while now and reiterate that call today...

 

The central planning #BeliefSystem is breaking down.

 

(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.)


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[UNLOCKED] Keith's Daily Trading Ranges

We've made some new enhancements to Daily Trading Ranges - our proprietary buy and sell levels on major markets, commodities and currencies sent to subscribers weekday mornings by CEO Keith McCullough. Click here to view a brief video of McCullough explaining how to use it most effectively.

 

Subscribers now receive risk ranges for 20 tickers each day -  the last five of which are determined by what's flashing on Keith's screen and by what names subscribers are asking about. Click here to subscribe.

 

  • Bullish Trend
  • Bearish Trend
  • Neutral

INDEX BUY TRADE SELL TRADE PREV. CLOSE
UST10Y
10-Year U.S. Treasury Yield
1.72 1.49 1.74
SPX
S&P 500
2,039 2,113 2,113
RUT
Russell 2000
1,124 1,175 1,172
COMPQ
NASDAQ Composite
4,720 4,890 4,910
NIKK
Nikkei 225 Index
14,802 15,918 16,238
DAX
German DAX Composite
9,199 10,306 10,257
VIX
Volatility Index
16.40 30.99 17.25
USD
U.S. Dollar Index
93.08 95.80 93.53
EURUSD
Euro
1.10 1.13 1.13
USDJPY
Japanese Yen
102.18 106.11 106.03
WTIC
Light Crude Oil Spot Price
44.79 50.72 50.13
NATGAS
Natural Gas Spot Price
2.45 2.82 2.74
GOLD
Gold Spot Price
1,260 1,328 1,259
COPPER
Copper Spot Price
2.00 2.15 2.16
AAPL
Apple Inc.
93.07 97.03 96.10
AMZN
Amazon.com Inc.
690 724 722
MCD
McDonald's Inc.
118 123 121
NFLX
Netflix Inc.
87.11 94.18 91.66
GOOGL
Alphabet Inc.
675 728 714
FB
Facebook Inc.
109 115 115

 

***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.


Daily Market Data Dump: Friday

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 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.

 

CLICK TO ENLARGE

 

Daily Market Data Dump: Friday - equity markets 6 24

 

Daily Market Data Dump: Friday - sector performance 6 24

 

Daily Market Data Dump: Friday - volume 6 24

 

Daily Market Data Dump: Friday - rates and spreads 6 24

 

Daily Market Data Dump: Friday - currencies 6 24

 


[UNLOCKED] Early Look: A Courageous Vote

Editor's Note: Below is a complimentary Early Look written by Hedgeye CEO Keith McCullough this morning. Click here to learn more.

 

“Your heart is free – have the courage to follow it.”

-William Wallace

 

For many, today will not be easy. For many others, it will be one of their best. This is the path. This is life. Everyone doesn’t always get a sticker. There are winners and losers. This is democracy.

 

[UNLOCKED] Early Look: A Courageous Vote - Brexit cartoon 06.16.2016

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.

 

I realize that there were crazy people on both sides of this vote. There always are. People are crazy. But The People do have a right to vote against both the establishment of a highly-paid-political-life and being centrally planned from an office they didn’t elect.

 

What will the ECB and lord Draghi do next?

 

Will they opt for another currency devaluation? Or will they realize now that a debased currency undermines the legitimacy of the government trying to manipulate it? Will they “cut rates” from negative to negative-and-beyond? What happens to the banks?

 

I don’t know.

 

But do they? That remains The Question I have about the entire #BeliefSystem of central market-planning. That’s the question I have been asking myself ever since markets started pricing in that the probability of this not ending well was rising.

 

No, this is not a day for a victory lap.

 

Not for me. This isn’t my win. This is theirs. And don’t kid yourself – there are a lot of “they” out there who have been pounded by the confiscation of their purchasing power. That’s what’s in the value of a currency. And governments should never compromise its trust.

 

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.

 

If Americans don’t have this public conversation, is our stock market next?

 

Today’s market news might be that:

 

  1. Japan’s stock market closed down -8%
  2. Germany’s opened down -7%
  3. Spain and Italy’s are trading down -11% (on the day)

 

But the real story has been one that’s been priced in sometimes slowly – and now all at once.

 

This is partly a story of central market-planners having the arrogance to promise the world that they can bend and smooth economic gravity and that “there is no alternative to buying stocks.”

 

In 17 years, I’ve worked and lived through two major US stock market crashes. Today, I’m proud to say I worked and lived through another crash in European stock markets not having to make excuses to my clients on why “no one could see this one coming.”

 

Macro markets did see this coming.

 

I know you are not the consensus. You wouldn’t be reading this if you were. If you had the courage to follow your own research and risk management process, I sincerely hope that you and all that you’ve worked for in your life has a good day.

 

It’ll be a great day for democracy and what’s left of our free-market liberties.

 

[UNLOCKED] Early Look: A Courageous Vote - asset alloc 6 24

 

Our immediate-term Global Macro Risk Ranges are now:

 

UST 10yr Yield 1.49-1.72%

SPX 2039-2113

Nikkei 14802-15918

DAX 9199-10306

VIX 16.40-30.99 
USD 93.08-95.80 
EUR/USD 1.10-1.13 
Oil (WTI) 44.79-50.72

Gold 1260-1328

 

Best of luck out there today,

KM

 

Keith R. McCullough
Chief Executive Officer

 

[UNLOCKED] Early Look: A Courageous Vote - tlt


Daily Trading Ranges

20 Proprietary Risk Ranges

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