Crashy: These 4 Stock Markets Are Down Over 20%

Takeaway: Germany's DAX and Japan's Nikkei are still in crash mode while our #GrowthSlowing call, i.e. long the Long Bond (TLT), continues to pay off.

Crashy: These 4 Stock Markets Are Down Over 20% - euro crash


"Gotta love the decelerating-volume month and quarter-end markups – economic and profit cycle reality continues tomorrow," Hedgeye CEO Keith McCullough wrote this morning in a note sent to subscribers.


Here's more from McCullough:


"Germany's DAX is backing off its bear market bounce this morning with both IBEX (Spain) and MIB (Italy) backing off -0.3-0.5% - don’t forget that A) all of these economies were going to slow in 2H 2016 ex-Brexit anyway and that B) all of their stock markets remain in crash mode (DAX -23%, IBEX -32%, MIB -34%) from their 2015 economic cycle peaks."




Meanwhile in Asia...


"JAPAN: flat for the Nikkei post a few days of a centrally planned bear market bounce, still -25.4% since July 2015," McCullough writes.


Crashy: These 4 Stock Markets Are Down Over 20% - nikkei 6 30


But there's always a bull market somewhere...


We're the Bulls on #GrowthSlowing. Here's a look at our favorite Macro position, long the Long Bond (TLT) year-to-date:


  • TLT: +14.8%

  • S&P 500: +1.3%


CHART OF THE DAY: What Establishment Media Has Missed All Year Long

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


"... I get it. Instead of truly trying to understand how we got to now (causal factor analysis across durations), what establishment media needs to do is hurry up some headlines on how they get ad revs up tomorrow.




Nah. This is Wall Street. And while we think we can get away with more and more and more of this behavior, The People are telling us (see equity fund outflows, fee compression, redemptions, etc. for details) that they don’t trust us anymore."


CHART OF THE DAY: What Establishment Media Has Missed All Year Long - 06.30.16 EL Chart

Cartoon of the Day: Guru Wisdom

Cartoon of the Day: Guru Wisdom - central bankers cartoon 06.29.2016


This one speaks for itself.

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The BS Filter: Hedgeye's Take On Today's Financial News

The BS Filter: Hedgeye's Take On Today's Financial News - central banker house of cards


Below is a collection of interesting links and insights from today's news with analysis filtered through our macro lens. This installment discusses why the public have stopped paying attention to economists, an update on negative yielding government bonds, the BOJ's latest efforts to prop up their struggling economy, and Italy's plan to help their struggling banks.




Why We've Stopped Paying Attention to Economists

"The predictions from economists about the consequences of Brexit were widely ignored. That shouldn’t be surprising. In recent years the public has lost faith the in the economics profession," economist Mark Thoma writes in The Fiscal Times. Thoma recounts the disagreements among economists, who can't seem to agree on why productivity has fallen, declines in the labor force participation, and what is the cause of inequality.


Bottom Line: We are equally skeptical of linear economic forecasters (both at the Fed and on Wall Street). Watch Hedgeye CEO Keith McCullough in the video below, "The 3 Most Overrated Economists in the World." 



More NIRP...

According to Fitch Ratings, "Investors' flight to safe assets following the UK's EU referendum on June 23 pushed the global total of sovereign debt with negative yields to $11.7 trillion as of June 27, up $1.3 trillion from the end-May total." Japanese government bonds make up a staggering two-thirds of the negative yielding bonds ($7.9 trillion). 


The BS Filter: Hedgeye's Take On Today's Financial News - fitch neg yields


BOJ Bloviating

Reuters reports that Japanese government and BOJ officials met for a second time post-Brexit in which "Abe urged Bank of Japan (BOJ) Governor Haruhiko Kuroda to ensure the central bank provides ample funds to the market to prevent any credit squeeze."


"A sense of uncertainty and worry about risks remain in the markets," Abe told the meeting. Finance Minister Taro Aso is also closely monitoring currency moves and responding flexibly to market developments in coordination with other Group of Seven economies. In other central-planning news, Chinese Premier Li Keqiang won't allow "rollercoaster" markets following Brexit.


Bottom Line: Central planners are pulling out all the stops to stem the post-Brexit bleeding. For the time being, investors seem to be buying into all the bloviating.


Italy's Troubled Banks 

Apparently, the Italian government is considering injecting as much as 40 billion euros ($44 billion) to some of its banks, according to Bloomberg sources. "The government may support lenders by providing capital or pledging guarantees, said the person. The amount is still under discussion and no final decision has been taken, according to the people."


"Italian banks, hurt by 360 billion euros of non-performing loans, sluggish economic growth and record-low interest rates, are under pressure to clean up their balance sheets and restore investor confidence. The country was among the hardest hit by Friday’s market rout that wiped $2.5 trillion from global equity values, with some of Italy’s largest banks dropping more than 20 percent."


Bottom Line: With the ECB's negative interest rate policy, don't expect struggling Italian banks to be in the clear anytime soon. Avoid the region, #EuropeSlowing...

A Brief Primer On Our Bull Case For Long Bonds


In this excerpt from The Macro Show earlier today, Hedgeye Senior Macro analyst Darius Dale lays out the bull case for Long Bonds (TLT) and explains why consensus has completely missed it.


Subscribe to The Macro Show today for access to this and all other episodes. 


Subscribe to Hedgeye on YouTube for all of our free video content.

Capital Brief | Trump: "You're Hired" ... & Benghazi Blame

Takeaway: All The Right Moves; You're Hired; Benghazi Blame

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


Capital Brief | Trump: "You're Hired" ... & Benghazi Blame - JT   Potomac under 1 mb


"Whatever you are, be a good one."

-Abraham Lincoln


Donald Trump is back on Hillary Clinton’s heels and rallied the faithful delivering an anti-globalization speech in the highly contested rustbelt region. Trump aptly chose a former steel town in western PA for another prepared speech - trashing Republican-backed (and formerly Clinton) at policies promoting free trade (NAFTA, TPP, China), while highlighting the need for an economic renaissance.


In the most detailed economic address he has given to date, Trump slammed Clinton for her insider mentality and for rigging the system, and lamented the downturn working-class families have experienced given the decline in American manufacturing. His shift towards a policy speech has all the right moves, but will a change in style win over a divergence in substance?


Trump’s presidential campaign continues to surprise as he takes integral steps - baby ones - in the right direction. Trump’s campaign announced a handful of new hires in its communications operations as he aggressively tries to match the first-rate team backing Clinton. Better late than never - and more hires are expected to be announced soon - including state directors, surrogates, speech writers and convention advisors.


With Cleveland fast approaching, the unconventional Trump has been hard-pressed by Republicans to move towards a more conventional campaign - we’ll see if these veteran hires put the Trump train back on track.


Republicans delivered the final Benghazi Committee report that criticized the Obama Administration's handling of the 2012 terrorist attack, while Clinton's campaign continues to classify the findings as discredited conspiracy theories. Either way, there are no new significant revelations about the role played by Clinton.


So what’s all the fuss about? The 800-page report is concerning - yet somewhat vanilla - but it's sure to add fuel to the Republican fire throughout the election as they blame Clinton for security lapses leading to the tragic event.

Early Look

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