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CHART OF THE DAY: Fed September Rate Hike Expectations Too Low

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.


"... Looking at the implied market probability of another hike, across durations:

  1. JUL meeting = 8%
  2. SEP meeting = 21%
  3. DEC meeting = 43%

For now, I think those SEP expectations are too low. If I’m right on that, rates will keep making a series of higher-lows and Fed funds futures will continue higher until we get another jobs report bomb (PS. don’t rule that out)."


CHART OF THE DAY: Fed September Rate Hike Expectations Too Low - 07.20.16 image

Technology Equity Research Veteran Ami Joseph Joins Hedgeye

Takeaway: Veteran analyst will provide best ideas on both the long and short side of Technology stocks.



STAMFORD, Conn., July 20, 2016 -- Hedgeye Risk Management, a leading independent provider of investment research and online financial media firm, announced today that industry veteran Ami Joseph has joined the company as a Managing Director to lead its Technology equity research platform. He joins Hedgeye from Joseph Capital Partners, a Boston-based research boutique that he founded which provided long and short ideas to institutional investors.


In his new role at Hedgeye, he will continue to provide his best ideas on both the long and short side of Technology stocks.


Technology Equity Research Veteran Ami Joseph Joins Hedgeye - Ami 7.19.16   Output 1 .mov.13 54 44 02.Still001


"Our rapidly growing team here is very excited to welcome Ami aboard during this important phase of our firm’s growth," said CEO Keith McCullough. “His insight and experience in the tech sector will be a key component of our strategy and success in this evolving space in the years to come."


Joseph comes to Hedgeye with almost two decades of buy-side and sell-side experience covering the technology sector. Before founding and managing Joseph Capital Partners, he was an equity research analyst at Putnam Investments where he led international equity research for technology stocks. Prior to that, he was a technology analyst at Fidelity Management & Research.


“Hedgeye is a truly unique research firm heading in a very positive direction,” said Joseph. “I’m thrilled to join such a talented team of analysts. In addition, having the advantage of being part of a growing media platform with greater resources will enable me to serve my clients that much more effectively going forward.”


Joseph graduated Magna Cum Laude from the University of Pennsylvania where he was a Benjamin Franklin Scholar and member of the Phi Alpha Theta Honors Society.




Hedgeye Risk Management is an independent investment research and online financial media firm. Focused exclusively on generating and delivering investment ideas in a proven buy-side process, the firm combines quantitative, bottom-up and macro analysis with an emphasis on timing.


The Hedgeye team features some of the world's most regarded research analysts, all with buy-side experience, covering Macro, Financials, Energy, Healthcare, Retail, Gaming, Lodging & Leisure (GLL), Restaurants, Industrials, Consumer Staples, Internet & Media, Housing, Materials, Technology and Washington policy analysis.



Dan Holland



Cartoon of the Day: Going Nowhere

Cartoon of the Day: Going Nowhere - helicopter money cartoon 07.19.2016


Rumors about helicopter money aside, Japan's Nikkei is still down 19.8%, inclusive of last week's 10% pop.

Hedgeye Statistics

The total percentage of successful long and short trading signals since the inception of Real-Time Alerts in August of 2008.

  • LONG SIGNALS 80.35%
  • SHORT SIGNALS 78.44%

No Nonsense | 2 Charts: The Japanese Equity Pop & Helicopter Money Musings

Takeaway: In the last seven days of trading, the Nikkei is up +10.7% and USDJPY +5.5% on helicopter money speculation. That's a mirage.

No Nonsense | 2 Charts: The Japanese Equity Pop & Helicopter Money Musings - Abenomics cartoon 02.25.2016


Last week was an undoubtedly good week for Japanese equity bulls.


Conflicting rumors from Japanese officials stoked "helicopter money" speculation and the bulls cheered. In the last seven days of trading, the Nikkei is up +10.7%. Unsurprisingly, the Yen weakened (USDJPY: +5.5%, over that same period). But hang on...


Take a deep breath.


Before dogpiling into Japanese equities, consider the broader trend not dictated by helicopter money hot air and speculation. The Japanese economy continues to slow. Today, the IMF lowered its 2016 estimate for Japanese growth to 0.3%, from 0.5% prediction in April. Not good. That also explains why the Nikkei is down -19.8% in the past year, inclusive of the recent pop.


No Nonsense | 2 Charts: The Japanese Equity Pop & Helicopter Money Musings - nikkei 7 19



The BOJ has been desperately trying to devalue the Yen in an effort to stimulate sluggish economic growth. That's the standard central planning playbook but it isn't working. In the past year, the yen has strengthened (USDJPY is down -14.6%), despite the ¥80 to ¥90 trillion in quantitative easing. That's roughly equivalent to 16% of Japan's gross domestic product. Again... not working.


No Nonsense | 2 Charts: The Japanese Equity Pop & Helicopter Money Musings - usdjpy 7 19

All things considered, it's worth asking yourself...


Can Japanese central planners actually stimulate economic growth or is helicopter money merely a mirage?

Housing: How A Stronger Dollar Is Influencing Foreign Buyers

Takeaway: A stronger dollar matters in the housing market because foreign demand makes up ~4% of total transaction volume and ~8% of dollar volume.

Editor's Note: Below is an excerpt from an institutional research note written last week by Hedgeye Housing analysts Josh Steiner and Christian Drake. To access our Housing team's institutional research email sales@hedgeye.com.


Housing: How A Stronger Dollar Is Influencing Foreign Buyers - Dollar cartoon 03.09.2015


According to the National Association of Realtors, International Homebuyers purchased $103bn of US real estate from April 2015 through March 2016. Five countries: China, Canada, India, The United Kingdom and Mexico accounted for 51% or $52.8bn. China was the largest buyer for the second year in a row, accounting for 27% or $27.5bn of all foreign home purchases during the survey period.


  • Foreign Buyer residential home purchases were up +3% YoY to 214,900 units
  • Foreign Buyer dollar volumes were down -1.3% YoY to $102.6B
  • Sales Volumes to non-resident foreigners fell -11% YoY to 88.5K
  • Dollar Volume of non-resident purchases fell -18.5% YoY to $44B
  • 50% of International Buyer residential home purchases were paid in all cash
  • Foreign Buyers paid on average 56% more for an Existing Home than Domestic Buyers

Strong Dollar Impact

The U.S. Dollar is up 23% since July 2014 and, while gains have been more muted over the 12 months, currency headwinds continue to pressure purchasing power across key demand countries.  


As shown in the chart below, the Strong Dollar has increased the Median Price of US Existing Homes in the local countries of the Top 5 countries anywhere from 10% to 22% YoY.


Housing: How A Stronger Dollar Is Influencing Foreign Buyers - housing josh


For more information on our institutional research email sales@hedgeye.com.

Capital Brief: An Unconventional Convention & Ditching To "Watch Dumpster Fires"

Takeaway: Unconventional Convention; Rules Ruckus; Rallying Republicans;

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: An Unconventional Convention & Ditching To "Watch Dumpster Fires" - JT   Potomac under 1 mb


“I have noticed that nothing I never said ever did me any harm.”

-Calvin Coolidge


The highly anticipated Republican convention kicked off last night with a solid celebrity B-list group of speakers and headlined by none other than Donald Trump’s wife, Melania - whose well-received maiden speech is now mired in controversy given stark similarities to Michelle Obama’s 2008 Democratic convention speech.


But this convention was supposed to be different – we all expected that - and instead of the usual emphasis on celebrities, the focus would then be centered on politicians who typically serve to give testimonials to the nominee and represent a passing of the torch for the party, but that is in short supply in Cleveland. Despite the, well, uneven start (more below), expect Donald Trump to grab the torch on his own and run with it.


The #NeverTrump crowd’s last-ditch effort to invite discord and derail Trump’s nomination was squashed after their attempt to force a roll call vote on the convention rules failed. The group submitted signatures from a majority of delegates in more than the required seven states to force a recorded vote from all 2,472 delegates. However, a number of delegates under pressure from the party reportedly removed their names, allowing the rules package to pass by a chaotic voice vote.


#NeverTrump hoped to unbind pledged delegates from voting according to their state’s primary or caucus result and allow them to vote independently. Despite its failure, the spectacle of #NeverTrump’s last stand exposed the lack of unity in the Republican party, embarrassing Trump and diverting media attention away from his message and primetime speeches.


The ten billion dollar question heading into this week’s events is: can the party survive the convention and emerge unified and enthusiastic while scores of Republicans refrain from endorsing (or even mentioning) the nominee? Speaking to the Wisconsin delegation, Speaker Paul Ryan intimated that the party still needed to come together without mentioning Trump’s name once and while TX Senator Ted Cruz is set to participate in the festivities, we understand he will not endorse.


Top that off with OH Governor John Kasich’s very public dissing of Trump and the convention in his own backyard - which happens to be a battleground state. In fact, the only former Republican presidential nominee to attend is former Senator Bob Dole – the nominee from 1996. We haven’t mentioned the litany of excuses Members of Congress are using to stay away - from hiking the Grand Canyon to cutting the grass or even taking their kids to watch dumpster fires.

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