INSTANT INSIGHT: An Update On Our #CreditCycle Call

Takeaway: At the current default rate, 2016 is on track to surpass the 2009 all-time corporate bankruptcy high.

INSTANT INSIGHT: An Update On Our #CreditCycle Call - The Cycle cartoon 05.12.2016


As U.S. equity markets hit all-time highs, subtly simmering beneath the surface, the bond market is telling an entirely different story about the state of the U.S. economy.


According to the Financial Times:


"Global defaults hit the milestone century mark last week, a 50% jump from the number of delinquencies at the same point last year and the highest level since the US emerged from recession in 2009.


The number rose by four to 100 in the first full week of July, as defaults in the US oil and gas sector ratcheted higher, according to Diane Vazza of S&P Global Ratings.


That brings the amount that has been defaulted on to $154 billion."


(**S&P Global Ratings now predicts the default rate by junk-rated companies in the U.S. will climb to 5.3% by March 2017, up from 3.8% a year earlier.)


More disconcerting still, at the current default rate, 2016 is on track to surpass the 2009 all-time corporate bankruptcy high. 


INSTANT INSIGHT: An Update On Our #CreditCycle Call - global corp defaults



"The asymmetry between Rising Stars (potential for upgrade) & Fallen Angels (downgraded to Junk) in U.S. Credit continues," Hedgeye Financials analyst Jonathan Casteleyn wrote earlier today.


INSTANT INSIGHT: An Update On Our #CreditCycle Call - rising star fallen angel

More to be revealed.


**To read more of our #CreditCycle work check out:


Daily Market Data Dump: Monday

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, rates and bond spreads, and key currency crosses. 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




Daily Market Data Dump: Monday - equity markets 7 18


Daily Market Data Dump: Monday - sector performance 7 18


Daily Market Data Dump: Monday - volume 7 18


Daily Market Data Dump: Monday - rates and spreads 7 18


Daily Market Data Dump: Monday - currencies 7 18

QUICK TAKE: What's Ahead For Oil Prices

QUICK TAKE: What's Ahead For Oil Prices - oil cartoon 03.29.2016


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


"Stronger Dollar = weaker reflation returns… no follow through to Oil being +1.2% (WTI) last week as it’s still -5% in the last month and trading below @Hedgeye TREND resistance of $47.37/barrel."


Early Look

daily macro intelligence

Relied upon by big institutional and individual investors across the world, this granular morning newsletter distills the latest and most vital market developments and insures that you are always in the know.

CHART OF THE DAY: A Closer Look At Retail Sales

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. 


"... A few points on why we’ve been revising GDP higher throughout the quarter:

  1. The government has been understating “inflation” in both GDP and PCE Consumption reports
  2. When you understate inflation, you can overstate “real” consumption and GDP growth

A real-world example of this is Retail Sales. Because it’s reported nominally, lower gas prices actually drag on reported growth while higher prices – despite acting as a tax on real consumption – actually manifest as stronger reported growth."


CHART OF THE DAY: A Closer Look At Retail Sales - 07.18.16 EL 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.)




1. My Thoughts On a 'Heartbreaking' Healthcare 'Horror Story' (7/14/2016)



In this brief excerpt from The Macro Show this week, Hedgeye Healthcare Sector Head Tom Tobin answers a “heartbreaking” question from a subscriber on the collapse of ACA exchanges and the impact it’s having on American families.


2. Is Income Inequality Depressing Demand? (7/13/2016)



In this excerpt from The Macro Show this morning, Hedgeye Demography Sector Head Neil Howe answers a subscriber’s question on how whether income inequality in the U.S. is depressing aggregate demand.


3. About Everything | REPLAY: Driverless Cars: Unsafe at Any Speed? (7/12/16) 



In this complimentary edition of About Everything, Hedgeye Demography Sector Head Neil Howe discusses the future of driverless cars, assessing potential pitfalls that could ultimately delay the adoption of fully-autonomous vehicles.


"Yes, the 'low-hanging fruit' of semiautonomous driving has already been plucked," Howe writes. "But full autonomy requires infallible higher-order thinking, a golden apple which will prove difficult—if not impossible—to grasp anytime soon."


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


4. Penney: The 2 Most Important Things In The Restaurant Space (7/11/2016)



In this brief excerpt from The Macro Show earlier today, Hedgeye Restaurants analyst Howard Penney explains how slowing restaurant sales and traffic points to a slowing economy.



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.

This Week In Hedgeye Cartoons

Our cartoonist Bob Rich captures the tenor on Wall Street every weekday in Hedgeye's widely-acclaimed Cartoon of the Day. Below are his five latest cartoons. We hope you enjoy his humor and wit as filtered through Hedgeye's market insights. (Click here to receive our daily cartoon for free.)




1. Levitated (7/15/2016)

This Week In Hedgeye Cartoons - why so short 07.15.2016


Definition of levitate: "to rise or cause to rise and hover in the air, especially by means of supernatural or magical power."


2. Beta Bro (7/14/2016)

This Week In Hedgeye Cartoons - Beta Bro cartoon 07.14.2016


We present to you "Beta Bro." The defender of mediocrity in the active management community and all things S&P 500 beta.


3. Clueless (7/13/2016)

This Week In Hedgeye Cartoons - 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.


4. Central Banking 101 (7/12/2016)

This Week In Hedgeye Cartoons - negative interest rates cartoon 07.12.2016


According to the Fiscal Times:


"Japan's household sentiment soured and inflation expectations hit the lowest since the Bank of Japan adopted its massive stimulus program in 2013, a quarterly central bank survey showed... The ratio of households who said they trusted the Bank of Japan's policy management also hit a seven-year low, with more than half of the respondents doubting whether it was independent from government interference, the survey showed."


5. The Italian Job (7/11/2016)

This Week In Hedgeye Cartoons - Italian bank cartoon


Deutsche Bank’s chief economist said Europe's banks need a major recapitalization to the tune of €150 billion, as worries about Italian banks continue to make headlines. "And so Old Wall's begging for another bailout begins," Hedgeye CEO Keith McCullough wrote today.

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