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Daily Market Data Dump: Thursday

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

 

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Daily Market Data Dump: Thursday - style factor 7 7

 

Daily Market Data Dump: Thursday - sector performance 7 7

 

Daily Market Data Dump: Thursday - volume 7 7

 

Daily Market Data Dump: Thursday - rates and spreads 7 7


Europe 'Regaining Ground'? Nope. #EuropeImploding Is More Like It

Takeaway: Implosion risk is rising across the pond.

We stumbled across a misleading MarketWatch headline this morning.

 

Europe 'Regaining Ground'? Nope. #EuropeImploding Is More Like It - mktwatch 7 7

 

Huh? 

 

Sure, most European stock indices are up between 0.8% and 1.6% this morning. But "regain ground"? That's a bit of a stretch. Many European equity markets are still in crash mode. Like Germany, Hedgeye CEO Keith McCullough writes in a note sent to subscribers this morning:

 

"How many bear market bounces of greater than +1% have European Equity bulls chased since the DAX topped 2015? A: too many; DAX +1.3% this am to 9493 with a risk range of 9208-9770; remains in #crash mode (-23.4% from 2015 Global Equity #Bubble high) and a great short selling opportunity at top-end of my range"

 

 

#EuropeImploding

 

That's right. Today, at 11AM ET our Macro team will be hosting our Q3 Macro Themes Call. #EuropeImploding is one of our top three themes. Here's additional analysis from McCullough: 

 

"Moving away from staring at yesterday’s news, I’ll spend time on our Themes call discussing the rising risk of #EuropeImploding from within; with all eyes on British Pound Devaluation, there’s a much bigger picture to discuss linking European #GrowthSlowing (from the 2015 cycle high) to political zeitgeist via this young currency experiment."

 

More to be revealed. 

 

(Email sales@hedgeye.com for access to our institutional Q3 Macro Themes Call.)


Déjà Vu: Stocks Higher On Bone-Dry Volume

Takeaway: Volume dries up on up days. Down days? An entirely different story.

A lack of conviction in stock "up" days? Yes.

 

Total U.S. market volume was bone dry yesterday. More specifically, it was down -12% versus the 1-month average and down -13% versus 3-month average. Contrast this with the post-Brexit selloff two weeks ago when total equity market volume ripped. It was up 65% versus the one month average.

 

Déjà Vu: Stocks Higher On Bone-Dry Volume - volume 7 7

 

Déjà Vu: Stocks Higher On Bone-Dry Volume - volume 6 27

 

Not a good sign for stock bulls.

Déjà Vu: Stocks Higher On Bone-Dry Volume - Volume cartoon 08.12.2014


Daily Trading Ranges

20 Proprietary Risk Ranges

Daily Trading Ranges is designed to help you understand where you’re buying and selling within the risk range and help you make better sales at the top end of the range and purchases at the low end.

We’ll be hosting our Q3 Macro Themes Call at 11AM EST:

Client Talking Points

Euro

Moving away from staring at yesterday’s news, I’ll spend time on our Themes call discussing the rising risk of #EuropeImploding from within; with all eyes on British Pound Devaluation, there’s a much bigger picture to discuss linking European #GrowthSlowing (from the 2015 cycle high) to political zeitgeist via this young currency experiment.

DAX

How many bear market bounces of greater than +1% have European Equity bulls chased since the DAX topped 2015? A: too many; DAX +1.3% this am to 9493 with a risk range of 9208-9770; remains in #crash mode (-23.4% from 2015 Global Equity #Bubble high) and a great short selling opportunity at top-end of my range.

OIL

WTI down -4% in the last month (vs. Gold +10%) and I’m still much more bullish on Gold than Oil – Oil’s volatility (OVX) backed up to 41 again yesterday and what I call my long-term TAIL support level remains 35-36; having missed the move off the 3yr low, I thought long and hard about getting long Oil/Energy for the Q3 Macro Themes call and decided no.

Asset Allocation

CASH US EQUITIES INTL EQUITIES COMMODITIES FIXED INCOME INTL CURRENCIES
7/6/16 60% 0% 0% 10% 26% 4%
7/7/16 58% 0% 0% 10% 27% 5%

Asset Allocation as a % of Max Preferred Exposure

CASH US EQUITIES INTL EQUITIES COMMODITIES FIXED INCOME INTL CURRENCIES
7/6/16 60% 0% 0% 30% 79% 12%
7/7/16 58% 0% 0% 30% 82% 15%
The maximum preferred exposure for cash is 100%. The maximum preferred exposure for each of the other assets classes is 33%.

Top Long Ideas

Company Ticker Sector Duration
TLT

Since equity markets peaked last summer, TLT has been a resilient and less volatile source of absolute alpha, and the good news is that spotting the opportunity requires a daily data grind and a wrestling with reality more than a sky-high IQ:

  • S&P 500: +0.1% Y/Y
  • TLT: +22.0% Y/Y

Brexit, Frexit, Yuan devaluation – whatever the story, investors are paying higher premiums for the safety and appreciation potential of the long bond, a source of long-standing outperformance in this #GrowthSlowing environment. Moving into 2015, net futures and options positioning shows that traders had the largest net short position in the 10-year Treasury of the entire cycle, as most were positioned for rate hikes and a “lift-off economy."

GLD

It was another week of all-time lows in long-term Treasury yields and YTD highs in Gold (GLD), Treasury Inflation-Protected Securities (TIP), and Long Bonds (TLT is at a new all-time high!) as the rotation out of volatile equity markets continues. 

TIP

See above update on TLT/GLD.

Three for the Road

TWEET OF THE DAY

Too Late to Buy Gold and Treasuries? app.hedgeye.com/insights/52167… via @KeithMcCullough $GLD $TLT #gold #markets #bonds pic.twitter.com/zdHGcIY3Mz

@Hedgeye

QUOTE OF THE DAY

“Freedom means the opportunity to be what we never thought we would be.”  

-Daniel Boorstin

STAT OF THE DAY

Bo Jackson played 8 seasons in the MLB, his career batting average was .250


JT TAYLOR: Capital Brief

JT TAYLOR:  Capital Brief - JT   Potomac banner 2

“We must adjust to changing times and still hold to unchanging principles.”

-  Jimmy Carter

 

AND THE BEAT GOES ON: Republicans believe charges should be brought against Hillary Clinton stemming from the FBI investigation of her private server as Secretary of State - at least they can unite behind something. House Oversight Committee Chairman Jason Chaffetz (UT) will hold a hearing later today featuring FBI Director James Comey. Chaffetz’s panel has been investigating Clinton's case parallel to the FBI, and up until now, Comey's office had not been forthcoming with the information as the investigation was pending. This has to be record time for arranging a hearing, which further demonstrates the intensity of Republicans when it comes to all things Clinton…looks like fireworks will continue for a few more days.

 

CLINTON HEADS DOWN THE SHORE: Not to gamble, but rather to bash Donald Trump in Atlantic City, NJ – the home of Trump’s many bankrupt casinos. Clinton hammered Trump’s promise to do for the nation what he did for his businesses – cautioning that it should be viewed as a warning, not an enticement. Trump’s legacy in Atlantic City is a rough one and Clinton made a killing. It includes four rounds of bankruptcy for the casinos he built there, costing workers, lenders, stockholders and contractors jobs and money. The verbal shots keep flying at the expense of falling credibility ratings for both – just sit back and enjoy the show.

 

TRUMP BUMP: For those of you keeping count, Trump raised $51 million in the five weeks through the end of June, collecting $26 million for his campaign and $25 million for the Republican party. Think back to just a few weeks ago when he had less than $1.3 million in the bank. The bump comes as a sign that his lagging fundraising efforts are finally starting to gain traction and should show Republicans on the Hill that he’s taking this more seriously and just in time for his meetings with them today.

 

KEEP THE FIRE BERNING: Clinton is now changing up her college-affordability plan in an effort to harvest Bernie Sanders supporters by proposing the elimination of public in-state tuition for students whose families make less than $125,000. This chalks up the second big win for the Sanders camp this week. Clinton’s shift toward Sanders’ proposal, which retains tuition-free college at public institutions, comes as she seeks to consolidate the senator’s backers in the last months of the election. Although Clinton has struggled with certain groups in the past (i.e. millennials), her recent shifts on healthcare and tuition may prove to help her case.

 

THE BACHELOR - TRUMP EDITION: Trump’s veepstakes has resembled a reality tv show as of late - he’s spent this week (it’s not even over yet!) with a different prospect each day. Senators Joni Ernst (IA) and Bob Corker (TN), Governor Mike Pence (IN), and former Speaker of the House Newt Gingrich have all split time with Trump as he traveled throughout the East Coast (we’re betting Governor Chris Christie is feeling a bit spurned right now). Although Corker and Ernst have all but withdrawn from consideration, we still expect the final rose ceremony – his veep selection announcement – to be sometime next week ahead of the convention.

 

BREAKING THE 11TH COMMANDMENT: The unwritten Reagan rule has been trumped by a number of stalwart Republicans; Trump has long been criticized for a wide range of his policy ideas, and his foreign policy stance has remained the most unpopular – so it must’ve hurt a little when news broke that several more Reagan and Bush foreign policy specialists announced they will support Clinton in November. The widespread skepticism within the Republican establishment toward Trump's ability to manage his campaign, let alone actual foreign policy, has made it difficult for Trump to attract both endorsements and campaign advisors.

 

 

 

 


CHART OF THE DAY | #ProfitCycle: Consensus Estimates Vs. Reality

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.

CHART OF THE DAY | #ProfitCycle: Consensus Estimates Vs. Reality - top three

 

CHART OF THE DAY | #ProfitCycle: Consensus Estimates Vs. Reality - 07.07.16 EL chart


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