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Capital Brief: Trying Times For Trump & The Growing List Of GOP Defectors

Takeaway: A Party Dividing?; Trump Econ 101; Unanswered Questions

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: Trying Times For Trump & The Growing List Of GOP Defectors - JT   Potomac under 1 mb

 

“The bud of victory is always in the truth.”

-Benjamin Harrison

A PARTY DIVIDING?

Following one of his campaign’s worst weeks yet, Donald Trump claims he won’t change his strategy or alter his temperament even slightly. His Second Amendment comments were beyond the pale - overshadowing yet another headline on Hillary Clinton’s State Department emails and influence from the Clinton Foundation - and will likely cost him more party members and donors as some are now making their support of Hillary Clinton very public. The list continues to grow - this time including ME Senator Susan Collins saying she would not vote for Trump. In addition to Collins, and other high-profile former Bush Administration defections, a letter signed by 50 senior Republican national security officials warned that a Trump presidency would “risk our country’s national security and well-being.”  

TRUMP ECON 101

Amid protesters’ interruptions, Trump’s economic speech to the Detroit Economic Club was a mix of the good, the bad, and the ugly. The plan stitched together old ideas from the left and the right, including a large dose of tax cuts mixed with outdated protectionism, reformed conservative social policy and a deregulation plan that would make Wall Street cheer. Will the unusual mix of policy captivate those outside of Trump’s constituencies and stall his recent slide in the polls and recapture the momentum that led him to the nomination? Clinton is expected to lay out her rebuttal later this afternoon.

UNANSWERED QUESTIONS

It’s hard to dismiss the fact that Clinton is leading by double digits in most national polls and now with just 90 days until election day, Trump still has not spent a dime on television advertising, even as Clinton continues to flood the airwaves with more than $50 million in ad spending. It's not for lack of money as the Trump campaign raised $80 million in July and finished the month with $37 million cash-on-hand. We’re stymied that he hasn’t tried to make up any lost ground not even posting during the Olympics as Clinton drops $5.5 million on prime time ads.


PREMIUM INSIGHT

[UNLOCKED] Early Look: Inhaling All-Time Highs?

[UNLOCKED] Early Look: Inhaling All-Time Highs? - obama smoking

This is a complimentary Early Look written by Hedgeye CEO Keith McCullough on July 11th. "When I grew up in the hedge fund business, my bosses only cared about generating alpha," McCullough wrote. "Rather than inhale every little wiggle in the SPY for the last year (chasing up moves and freaking out on down ones), we just have to stay with our winners. Ride them. And breathe."


#GrowthSlowing: Did You Miss The Move?

Takeaway: Global 10-year sovereign bond yields are down across the board this morning.

I see plenty of email traffic (after the move) on the recent backup in yields, but will I get any emails this morning on the same as 10-year Yields around the world A) fail @Hedgeye TREND resistance and B) fall in unison as Global #GrowthSlowing data continues? UK 10yr -6bps to 0.52%.

 

But, but… “they’re expensive” (Old Wall PM speak for I didn’t and don’t own them) and “eventually” the bubble in bonds “has to pop” (but in “stocks”, never – always room to go higher)…

 

That’s what’s been filling up my inbox for the past few weeks. And that’s primarily because long-term bond yields, globally, bounced off their all-time lows. The widely watched widow-maker (for Long Bond Bears) – Japanese Government Bonds – sold off 22 basis points!

 

So if you nailed it (instead of being nailed for the last year shorting “expensive” bonds and their proxies) and shorted JGBs, Bunds, and Treasuries at the all-time lows in yields, I say you book those gains before the Gold Bond Bulls run you over.

 

 

Editor's Note: The snippet above is from a note Hedgeye CEO Keith McCullough wrote for subscribers this morning. Click here to learn more. 


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Daily Market Data Dump: Wednesday

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, key currency crosses, and commodities. 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

 

CLICK TO ENLARGE

 

Daily Market Data Dump: Wednesday - equity markets 8 10

 

Daily Market Data Dump: Wednesday - sector performance 8 10

 

Daily Market Data Dump: Wednesday - volume 8 10

 

Daily Market Data Dump: Wednesday - rates and spreads 8 10

 

Daily Market Data Dump: Wednesday - currencies 8 10

 

Daily Market Data Dump: Wednesday - commodities 8 10


CHART OF THE DAY: The Widely Watched Widow-Maker (for Long Bond Bears)

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.

 

"... But, but… “they’re expensive” (Old Wall PM speak for I didn’t and don’t own them) and “eventually” the bubble in bonds “has to pop” (but in “stocks”, never – always room to go higher)…

 

That’s what’s been filling up my inbox for the past few weeks. And that’s primarily because long-term bond yields, globally, bounced off their all-time lows. The widely watched widow-maker (for Long Bond Bears) – Japanese Government Bonds – sold off 22 basis points!" 

 

CHART OF THE DAY: The Widely Watched Widow-Maker (for Long Bond Bears) - 08.10.16 chart


Cartoon of the Day: Twilight Zone

Cartoon of the Day: Twilight Zone - Euro Zone cartoon 08.09.2016

 

One of our top three 3Q16 Macro Themes is #EuropeImploding.


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