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McCullough: What Is Plunging 10-Year Yield Telling Investors?

In this brief excerpt from The Macro Show this morning, Hedgeye CEO Keith McCullough takes a look at U.S. bond yields sinking to record lows and what may lie ahead.

 

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What The Mainstream Media Missed About All-Time Lows For 10-Year Yield

Takeaway: All-time lows in the 10-year Treasury yield is continued vindication for our Macro team's #GrowthSlowing call.

What The Mainstream Media Missed  About All-Time Lows For 10-Year Yield - bond yields 

 

All-time lows in 10-year Treasury yields this morning.

 

Yup. 

 

Yet more vindication of our Macro team's global #GrowthSlowing call.

 

Here's brief analysis from Hedgeye CEO Keith McCullough in a note sent to subscribers earlier this morning:

 

"While “stocks” have these 1-week ramps, you have to take on a lot of volatility to time those returns – with the Long Bond and it’s proxies, both absolute and volatility adjusted returns have been awesome. All-time low this am for the US 10yr of 1.38% ahead of the Friday jobs report and the Q2 Earnings Recession season."

 

 

Macro tourists and the mainstream media missed an important callout in reporting fresh lows for sovereign bond yields this morning...

 

The 10s/2s Treasury yield spread (a rate of change proxy for US growth and bank earnings) hit a new low for #TheCycle of 80bps today:

 

What The Mainstream Media Missed  About All-Time Lows For 10-Year Yield - yield spread 7 5

 

That's why our favorite macro call, long the Long Bond (TLT), continues to outperform:

 

What The Mainstream Media Missed  About All-Time Lows For 10-Year Yield - tlt v spy 7 5

 

In short, the bond market has figured out what still puzzles most stock-centric investors...

 

Global #GrowthSlowing continues to rule the day


Daily Market Data Dump: Tuesday

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 TO ENLARGE

 

Daily Market Data Dump: Tuesday - equity markets 7 5

 

Daily Market Data Dump: Tuesday - sector performance 7 5 16

 

Daily Market Data Dump: Tuesday - volume 7 5

 

Daily Market Data Dump: Tuesday - rates and spreads 7 5

 

Daily Market Data Dump: Tuesday - currencies 7 5


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Vive la France! (Well, Not So Much)

Takeaway: It's a big, stinky mess in France and the rest of Europe. It's not going to get better any time soon.

In case you missed it ... France officially joined the laundry list of crashing equity market casualties this morning.

 

Some brief analysis from Hedgeye CEO Keith McCullough in a note sent to subscribers earlier this morning:

 

"European stocks had their bear market bounce last wk (EuroStoxx600 +3.2% on the wk), but have given back a large % of those gains already this week and mostly remain in crash mode, with France’s CAC40 re-entering that risk zone at -1.7% this am (-20.5% from the 2015 Global Equity #Bubble high); Spain -2% to -32% from its 2015 cycle high."

 

Vive la France! (Well, Not So Much) - Stocks crash test dummies cartoon 02.18.2016

 

 To be clear, we don't believe the worst is over. Not only in France, but across Europe.


CHART OF THE DAY: The March To All-Time Lows In Sovereign Yields

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. 

 

"... Whereas, both Long-term Sovereign Bonds and their equity market proxies did the following:

  1. US Treasury 10-year Yield dropped another -12 basis points on the week to 1.44% (down -83bps YTD)
  2. UK 10-year Yield crashed another -22 basis points on the week to 0.86% (down -110bps YTD)
  3. Germany’s 10yr Yield dropped back to negative, falling -8bps on the week to -0.13% (down -76bps YTD)
  4. Japan’s 10yr Yield fell another -8 basis points on the week to -0.25% (down -52bps YTD)
  5. Low Beta US Equities ramped another +3.7% on the week to +14.0% YTD
  6. High Yield US Equities added another +3.1% on the week to +7.4% YTD
  7. MSCI REITS Equity Index rose another +4.3% on the week to +11.5% YTD
  8. US listed Utilities (XLU) added another +3.7% on the week to +21.3% YTD

*for 5 and 6, that’s the mean performance of Top Quintile vs. Bottom Quintile SP500 Companies"

 

CHART OF THE DAY: The March To All-Time Lows In Sovereign Yields - 07.05.16 Chart


REPLAY! This Week On HedgeyeTV

Our deep bench of analysts take to HedgeyeTV every weekday to update subscribers on Hedgeye's high conviction stock ideas and evolving macro trends. Whether it's on The Macro ShowReal-Time Alerts Live or other exclusive live events, HedgeyeTV is always chock full of insight.

 

Below is a taste of the most recent week in HedgeyeTV. (Like what you see? Click here to subscribe for free to our YouTube channel.)

 

Enjoy!   

 

1. McCullough: Gold Loves Blowup of Central Planning Belief System (7/1/2016) 

 

 

In this excerpt from The Macro Show today, Hedgeye CEO Keith McCullough lays out the bullish case for gold and highlights some disconcerting central planning statistics in Europe.

 

2. McCullough: Shameful Big Bank ‘Buybacks’ (6/30/2016)

 

 

In this brief excerpt from The Macro Show this morning, Hedgeye CEO Keith McCullough exposes the ridiculousness of big bank stock buybacks and enablers at the Fed.

 

3. A Brief Primer On Our Bull Case For Long Bonds (6/29/2016)

 

 

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.

 

4. Global Brexplosion | About Everything with Neil Howe (6/29/2016)

 

 

In this complimentary edition of About Everything, Hedgeye Demography Sector Head Neil Howe discusses last Thursday's Brexit vote and the broader implications for investors. "By failing to tear down and rebuild such hapless and dysfunctional institutions as the European Union, political leaders have left electorates few options other than total disruption," Howe writes.

 

Click here to read Howe’s associated About Everything piece.

 

5. Fantasy Land! A Look at This “Final” GDP Report (6/28/2016)

 

 

In this brief excerpt from The Macro Show this morning, Hedgeye CEO Keith McCullough rips apart the government’s latest GDP calculation. “You couldn’t make this up if you tried,” said McCullough. “And you wonder why people are getting upset with the establishment and the making up of numbers.”

 

6. McCullough: Crash Goes The Pound (6/27/2016)

 

 

In this brief excerpt from The Macro Show this morning, Hedgeye CEO Keith McCullough weighs in with his unique take on the beleagured U.K. currency.


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