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6 Charts: A Closer Look At Wall Street's Nonsense Narratives

Takeaway: Crashing global equity markets continue to trounce long held Old Wall narratives.

6 Charts: A Closer Look At Wall Street's Nonsense Narratives - global bear 12.11.2014 

"Near-term risks to the economic outlook have diminished."

-Federal Reserve, July 27, 2016

 

#NoWorries

 

Nothing to see here. It's fine. The S&P 500 is hitting all-time highs on no volume, earnings sucks, economic indicators continue to slide and there's this general economic malaise that's caused equity markets to crash globally. Forget all that.

 

But for posterity's sake consider a few evolving realities (with Old Wall narratives in italics).

 

Narrative #1: "European equities are really cheap."

1. Italy 

 

2. Spain 

 

 

"Stop talking about global equities we're long commodities..."

 

#Whoops

3. Commodities

 

 

"... But, but oil stocks."

4. OIL

 

 

"Come on now, the U.S. consumer is strong."

5. Ford

 

 

"Listen, the S&P 500 chart looks great. We broke above the all-time high."

6. no Volume

 

 

Stop believing Old Wall Fairy Tales.


Capital Brief | 3 Takeaways: Passing The Torch, Obama To Clinton

Takeaway: Passing The Torch; Mark of Kaine; Climbing Capital Hill;

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 | 3 Takeaways: Passing The Torch, Obama To Clinton - JT   Potomac under 1 mb

 

“Things don't turn up in this world until somebody turns them up.”

-James A. Garfield

PASSING THE TORCH

Day three was immensely important for Democrats as it signified a passing of the party torch from President Obama to Hillary Clinton. In his speech, Obama emphasized Clinton’s vast experience as a leader in public office, touting her ability to adapt to any situation, while imploring voters to defend his legacy by electing her as president. VP Joe Biden vouched for Clinton’s character, recalling weekly breakfasts with Clinton, where he learned her true passions, intellect, and toughness.

 

Both hit on Donald Trump for his lack of substance and reluctance – even inability – to expand his limited knowledge of policy and international affairs, despite the information being at his fingertips. But the most vital speaker of the night was veep pick Tim Kaine, who introduced himself to an unfamiliar nation and highlighted the reasons why he was the right choice to round out the ticket.

MARK OF KAINE

In a year when the veep choice matters so much, two questions remain – can Kaine make enough of a positive impact and is he liberal enough to woo leftist voters? Clinton took the safe route by tapping Kaine as her running mate, but it’s yet to be seen if he’s too safe of a pick. His style is anything but electric and he really doesn’t ignite progressives or other party factions.

 

The Wall Street crowd is pleased with him because he is not Warren, and his pros ultimately outweigh his cons since VA is a highly contested swing state, his moderate views can corral undecided voters, and he speaks fluent Spanish. However, the pick is still a direct slap in the face to progressives as they feel they are not adequately represented.

CLIMBING CAPITOL HILL

Veep pick Mike Pence, a former congressman with close ties to the Hill, has helped Trump and his campaign step up its courtship of wary Republicans - and the efforts appear to be fruitful. The charm offensive comes after months of Trump picking on other Republicans and is aimed at rewarding surrogates who make the case for him around the Hill.

 

Pence is working hard to reel in Republicans who’ve kept an arm’s length – even extending an olive branch to those once against Trump. If this is any indication of how Pence will perform in the future, Trump has made the right decision in choosing him. It’s imperative he grows his army as he will need all the backup he can get in the coming months.


UUP: Adding PowerShares DB US Dollar Index Bullish Fund to Investing Ideas (Long Side)

Takeaway: We are adding the US Dollar to Investing Ideas today.

Editor's Note: Please note that our Macro team will send a full report outlining our high-conviction long thesis next week. Below is a brief summary of our new idea from Hedgeye CEO Keith McCullough.

UUP: Adding PowerShares DB US Dollar Index Bullish Fund to Investing Ideas (Long Side) - strong dollar

 

"There's the very short-term (which I was waiting for a pull back on and, luckily, just got one). Then there's the long-term (we've been bullish on the US Dollar since 2013).

 

Short-term, you get the GDP "is back, baby" (tomorrow). Long-term, you have #EuropeImploding (bearish Euro) and Japan going for a 28 TRILLION Yen fiscal stimulus...

 

Oh, and not that perma bulls need to be consistent on the prior narrative... but both the Chinese Yuan and Oil are breaking bad again (that's been the TREND) too.

 

Buy Red,

KM


Attention Students...

Get The Macro Show and the Early Look now for only $29.95/month – a savings of 57% – with the Hedgeye Student Discount! In addition to those daily macro insights, you'll receive exclusive content tailor-made to augment what you learn in the classroom. Must be a current college or university student to qualify.

Special "Super Show" Friday Morning at 9:00AM ET

a Must-see show Friday ... 9:00AM ET

 

 

 

 

In light of big economic news and recent market developments, Hedgeye CEO Keith McCullough is hosting a special Super Show Friday morning exclusively for subscribers. Keith will review the investing implications of the Q2 GDP report, discuss the "Top-3" things in his macro notebook, and update his current signals in Real-Time Alerts.

 

As always, he will answer your questions live. 

 


EVENT | Return of Short CAT To Best Ideas List, Last Leg?

Thursday, August 4th at 11:00AM ET

CLICK HERE to access the audio-only replay.

Watch the replay below:

 

 

 


EVENT | Restaurants Speaker Series: "Wall Street Meets Main Street"

Monday, August 8th at 11:00AM ET

Watch a replay below.

CLICK HERE to access an audio-only replay.

CLICK HERE to access the associated slides.

 

 


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