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The Big Healthcare Themes - Institutional Call Today

Takeaway: We don't believe that the U.S. Medical Economy growth recovery of 2014 -2015 is durable.

The Big Healthcare Themes - Institutional Call Today - z hc

 

Hedgeye Healthcare analysts Tom Tobin and Andrew Freedman will provide a comprehensive overview of our #ACATaper and Healthcare Deflation themes with new datasets and analysis. 

 

The U.S. Medical Economy remains extended after the largest expansion in insured medical consumers in a generation.  Slowing growth in medical consumers, continued deterioration in affordability, aggressive payor reforms, company leverage at 15-year highs, and multiples at 10-year highs is a recipe for downside.  

 

We don't believe that the U.S. Medical Economy growth recovery of 2014 -2015 is durable, but rather a temporary boost in consumption driven by massive government stimulus.

 

The chart below is from our team's +100-slide deck.

The Big Healthcare Themes - Institutional Call Today - z xxc

 

We are also extremely pleased to announce that Emily Evans, Director of Health Policy at Hedgeye, will be joining the presentation and sharing her views on major policy initiatives including Alternative Payment Models, MACRA, and post-acute reform, among other topics that significantly impact our fundamental views.

 

**Email sales@hedgeye.com for access.


CHART OF THE DAY: Hubris? Tesla's Quest For The Driverless Car

Editor's Note: Below is a brief excerpt and chart from today's Early Look written by Hedgeye Managing Director Neil Howe. Click here to learn more.

 

"... As head of Hedgeye’s new Demographic Sector, on Monday I wrote a Hedgeye column called “Driverless Cars: Unsafe at Any Speed: Why Fully Autonomous Vehicles are Still a Long Way Off.” I won’t recap the piece here (you can read it yourself), but my basic argument focuses on (1) the absurd overconfidence in the ability of today’s AI and sensors to replace the higher-order thinking of human drivers; (2) the all-or-nothing contradiction of semi-automatic driving; and (3) the obvious revulsion with which people will respond to machines that kill them at random." 

 

CHART OF THE DAY: Hubris? Tesla's Quest For The Driverless Car - driverless 3


Cartoon of the Day: Clueless

Cartoon of the Day: Clueless - Fed  Haven t a clue  cartoon 07.13.2016

 

The Fed-induced bubble in financial markets has undoubtedly made the rich richer while its easy money policies have devalued the purchasing power of average Americans.


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Capital Brief: Who's On Trump & Clinton's VP Short List

Takeaway: Stronger Together...; Worth More Than A Bucket Of Warm Spit?; Trump Stump;

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: Who's On Trump & Clinton's VP Short List - JT   Potomac under 1 mb

 

“The ballot is stronger than the bullet.”

Abraham Lincoln

STRONGER TOGETHER...

In a long-awaited and highly-anticipated speech, Bernie Sanders delivered an impassioned endorsement of Hillary Clinton while she rallied the crowd with the message that Democrats are unified and ready to take on Donald Trump in the fall. In the end, Sanders has much to feel good about – he’s helped shape the most progressive platform in Democratic party history.

 

The remaining question is whether or not the Clinton-Sanders relationship will actually blossom, and if she will be able to fully win over his supporters - many of whom are still reeling that he left the race before the convention.

WORTH MORE THAN A BUCKET OF WARM SPIT?

This may be the year where the veep selections carry more weight than in years past - dating back to JFK’s critical pick of LBJ. Trump’s decision could be a make or break moment for legions of Republicans and undecided party leaders. The push to unify and reassure has Trump seriously considering Governors Mike Pence and Chris Christie, former House Speaker Newt Gingrich, and Senator Jeff Sessions.

 

Clinton on the other hand, faces a much different situation. Her progressive moves within the party platform have helped her make progress with the wing she would most likely need help from and appears to be shifting her focus to VA Senator Tim Kaine, Labor Secretary Thomas Perez, and now Admiral James Stavridis. Title courtesy of VP John Nance Garner.

TRUMP STUMP

Trump continues to surprise - now adding Senate Majority Leader Mitch McConnell to his growing list of convention speakers - all to be announced later today. McConnell, who will attend as a delegate and a speaker, endorsed Trump shortly after he clinched the nomination in early May, but has since kept his distance given the steady drumbeat of Trump’s controversies. McConnell’s participation is another step in the right direction for Trump, but he still lags in winning over other key party types - including his main primary rivals.


Consensus Is Crowding Into a Precarious Position | $SPY

Takeaway: A closer look at CFTC futures and options positioning reveals that consensus remains rather long the S&P 500.

Consensus Is Crowding Into a Precarious Position | $SPY - S P 500 cartoon 06.08.2016

 

Below is analysis from our Macro team in a note sent to subscribers earlier this morning:

 

"As we highlighted on The Macro Show yesterday, the CFTC net futures and options positioning in the S&P was already long 58K contracts moving into this week, or +1.68x on a TTM z-score basis (and that’s positioning through last Tuesday). With the low volume melt-up moves from Fri-Tues (S&P +2.6%) , expect an even longer consensus position at the end of this week.

 

Go ahead and buy all time-highs on peak cycle forward multiples (and that’s assuming the consensus expectation for a major corporate profit turnaround) in a crowded long position, but we’re going to sit it out."

 

Consensus Is Crowding Into a Precarious Position | $SPY - cftc net long pos


Banks on the Barbie: Four Short Ideas In Australia’s Housing Bubble

Takeaway: The housing bubble in Australia is bad news for the country's big banks.

Editor’s Note: For more information on how you can access our institutional research email sales@hedgeye.com.

Banks on the Barbie: Four Short Ideas In Australia’s Housing Bubble - Australia housing cartoon

Last week, Hedgeye Financials Sector Head Josh Steiner held an institutional call discussing Australia’s housing bubble, and why now is the time to short Australian Banks. 

 

The country’s big four banks: CommBank (CBA), National Bank (NAB), Westpac (WBC) and Australia & New Zealand Banking Group (ANZ) are holding the bag on this developing mess. With over 60% of their loan books in residential mortgages, there’s basically nowhere to hide.

 

Here are some noteworthy highlights from Steiner’s call:

 

Contrary to popular belief, the primary driver accounting for approximately 30% of the Australian GDP is building, selling, and financing property, not mining which only accounts for around 8% of GDP. 60-70% of the market being bought with interest-only mortgages; this model only works when property prices continue to go up, as Americans may painfully remember.

 

An important tenet of Steiner’s demand slowing call rests on the assumption that Chinese demand for foreign property investment will slow in 2016 vs 2015, and then slow further in 2017. Part of this has to do with the coming credit storm and pace of FX reserve drawdown.

 

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For more information on how you can access our institutional research email sales@hedgeye.com.


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