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[From The Vault] Cartoon of the Day: Volcker To Yellen

[From The Vault] Cartoon of the Day: Volcker To Yellen - Fed Chairmen cartoon 02.03.2016

 

Our inimitable, in-house cartoonist Bob Rich is on a much-deserved summer vacation. While he kicks back and relaxes, we're going into the Hedgeye Vault and highlighting some of his best work. In light of the Fed's decision to hold rates steady today, we bring you another audience favorite


Fed Hawkish....

Takeaway: Dovish to Hawkish, Dovish to Hawkish

I couldn’t make this up if I tried, but in the last 6 months, the Federal Reserve has pivoted from Hawkish (DEC hike) to Dovish (on market down), to Hawkish (April), back to Dovish (May Jobs Report bomb), and now Hawkish again!

 

And I quote (because this is going to make them look really bad come the Q3 GDP report), “near term risks to the outlook have diminished”… ex-Durable Goods, ex-Capex, ex-Labor, ex-Profits… yes, until the next jobs report?

 

The Fed is shorter term now than a CT prop trader pounding 6 SBUX per day. If we’re right, Friday’s Q2 GDP report is going to be up big sequentially (we’re at +4.8% q/q SAAR), then down hard, sequentially, in Q3 (right before the election).

 

God Speed to them as they prepare to pivot back to Dovish (again). This is a professional and national embarrassment.

 

 

Fed Hawkish.... - Durable Goods

 

 


Why We’re Positive On Las Vegas Sands And Its Fat Dividend

In this brief excerpt from The Macro Show this morning, Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan explains why he likes Las Vegas Sands (LVS).


Under 60 Seconds: 3 Takeaways From Twitter's Earnings Report

Takeaway: Hedgeye Internet & Media analyst Hesham Shaaban shares three key conclusions from Twitter's worse-than-expected earnings report.


An Update On An (Ugly) Earnings Scorecard

Takeaway: Aggregate S&P 500 sales and earnings growth for the second quarter are +0.6% and -4.2% respectively.

An Update On An (Ugly) Earnings Scorecard - earnings 7 27

 

Remember the Old Wall consensus narrative that "earnings have bottomed"?

The key callouts:

  • A total of 182 of 500 companies have reported aggregate S&P 500 year-over-year sales and earnings growth for the second quarter of +0.6% and -4.2% respectively;
  • 4 of 10 S&P sectors reported negative year-over-year earnings so far;
  • Energy sales and earnings growth, -22.6% and -78.7% respectively;
  • Information Technology sales and earnings growth, -4.3% and -12.1% respectively;
  • Financials sales and earnings growth, -0.5% and -4.5% respectively;

Capital Brief: Sanders Revolution Runs Amok ... & Trump's Twitter Silence

Takeaway: Bernie or Bust; Omni-Bust?; Trump's Trusty Thumbs

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: Sanders Revolution Runs Amok ... & Trump's Twitter Silence - JT   Potomac under 1 mb

 

“You must pay the price if you wish to secure the blessing.”

-Andrew Jackson

BERNIE OR BUST

Bernie Sanders is certainly feeling the love from his supporters, but will it ever translate to Hillary Clinton and at what length are Sanders holdouts willing to continue their temper tantrums when they put the party at risk of losing the election? The jeering contingent of backers has been so insistent about never supporting Clinton that Sanders himself can’t even reel them in – his revolution is running amok.

 

Sanders formally nominated Clinton last night and his best shot to win them over is to build upon his role as Clinton’s chief surrogate now and for the remainder of the campaign. Democratic power brokers fear that these last-ditch holdouts are marring the convention, hampering unity and their general election chances; but should they be playing to the audience inside the Wells Fargo Center - or the much more critical audience of millions tuning in?

OMNI-BUST?

Congress longs for the day it can pass all 12 appropriations bills separately – but that will not happen this year…or anytime in the near future. The Appropriations Committees in both the House and the Senate have moved all 12 spending bills out of Committee, allowing for negotiations to proceed over recess. If successful, we could be looking at long-term funding for the government or more likely, an omnibus package – but don’t get your hopes up.

 

Congress could instead adopt a continuing resolution (CR) as an interim measure, providing funding for areas of the government for which specific appropriations are not adopted before the new fiscal year begins, but that would keep funding at the same level as the previous fiscal year. An omnibus package is better for economy and markets given the certainty that the government will be funded for a longer period of time, we can only hope something gets done before September 30.

TRUMP’S TRUSTY THUMBS

By day, Donald Trump is a campaigning machine – raising cash and swooping into swing states like NC and PA – but by night, he’s a twitter maniac. His blood pressure must be boiling watching primetime tv this week, because on the first night of the DNC, he lobbed insult after insult at every major speaker, with just one exception - Michelle Obama.

 

She didn’t mention him by name either, but she did criticize “the Manhattan businessman” for his rampant Twitter use. We thought the frequency of Trump’s 140 character games were going to diminish, and expected at least some sort of pivot from last week’s convention, but we were wrong.


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