In this brief excerpt from The Macro Show, Hedgeye CEO Keith McCullough explains how to trade an environment in which volatility continues “shocking people to the upside.”
Takeaway: Trump's Taxing Issue; Clinton's FBI Interview Fallout; Tangled Ties
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 firstname.lastname@example.org.
TRUMP’S TAXING ISSUE
Trump’s unprecedented refusal to release his tax returns could ultimately shatter the transparency of the democratic process for future generations in presidential and down-ballot races, even as his running mate, Mike Pence, is set to release his own. Demands to release his tax returns will only grow as his opponents will hammer the issue to undermine his campaign, but his obstinacy will have many more consequences in the end, as it adds more uncertainty in a time when undecided voters are finding it hard to connect with his candidacy. Though he’s claimed that he’s been advised against releasing his returns while “under audit,” it’s essential he makes some sort of concession to prove his trustworthiness to voters.
CLINTON'S FBI INTERVIEW FALLOUT?
Despite Clinton’s massive lead in NY (as much as 30 points!) and growing lead nationally, her campaign is on edge as they brace for the impact of the Clinton-FBI interview notes (not a recorded interview or transcript, but notes) that will be delivered to the House Oversight Committee sometime this week. The matter, which has been progressing since early July, was formally requested by Committee Chair Jason Chaffetz who has acted as lead investigator for Republicans in the controversy. No expectations have been set for what's in the notes, but the Clinton campaign would rather it disappear altogether.
The Trump campaign finds itself tangled in Eastern European politics yet again – this time with campaign chairman, Paul Manafort, being linked to a handwritten ledger showing his acceptance of $12.7 million in undisclosed cash payments. The accusations have sparked another controversy as relationships and ties to foreign entities are always hot button issues in a presidential campaign - from Trump’s statements about Vladimir Putin and the Russian hacking of Democrats’ emails to ties between the Clinton State Department and the Clinton Foundation. Whatever the case, the alleged compensation is still a mystery and its overall impact on the election - or more importantly, Trump’s poll numbers and public image - could be negative.
Introducing Hedgeye Technology Sector head Ami Joseph. In this excerpt from a recent HedgeyeTV video presentation, Joseph lays out why Intel (INTC) is his first Hedgeye Best Idea on the long side.
The total percentage of successful long and short trading signals since the inception of Real-Time Alerts in August of 2008.
LONG SIGNALS 80.52%
SHORT SIGNALS 78.70%
Takeaway: Year-over-year industrial production numbers declined for the 11th straight month.
Today's year-over-year industrial production number came in at -0.5% marking the 11th consecutive month of contraction. (The vertical red bars in the chart above mark recessions and anything below the red line indicates a contractionary reading.) For context, and a bit worrisome, it's worth noting how long industrial production contractions lasted during the last two economic recessions:
- Recession, December 2007 - June 2009: Industrial production declined for 12 straight months (y-o-y)
- Recession, March 2001 - November 2001: Industrial production declined for 16 straight months (y-o-y)
Takeaway: Nikkei back in crash mode as the BOJ didn't buy stocks last night.
Dollar Down, Yen Up …. And the Nikkei smoked right back into crash mode (-1.6% overnight and -21% from the 2015 Global Equity #Bubble peak) as the BOJ did the un-thinkable and didn’t “buy stocks” into the bell… (this should all end well). The JGB 10yr Yield fell 2bps to -0.11%.
Meanwhile, Nikkei Asian Review reports that Japan's stalling growth is adding fuel to the GDP measurement debate between the Bank of Japan and the Cabinet Office. Funny how these debates always heat up when output sucks.
Editor's Note: The snippet above is from a note written by Hedgeye CEO Keith McCullough and sent to subscribers this morning. Click here to learn more.
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 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.