prev
PREMIUM INSIGHT

Allscripts: Short More | $MDRX

Allscripts: Short More | $MDRX - mdrx

This is an institutional research note on Allscripts (MDRX) written by Hedgeye Healthcare analysts Tom Tobin and Andrew Freedman on August 5th. Shares of MDRX are down -14.5% since our Healthcare team wrote "Short More." But this short still has juice left. Continue reading to understand why Tobin and Freedman see an additional -35% downside from here. 


PREMIUM INSIGHT

[UNLOCKED] Fund Flow Survey | The Hits Keep Coming

[UNLOCKED] Fund Flow Survey | The Hits Keep Coming - dollar

This is a complimentary research note originally published August 11, 2016 by our Financials team. If you would like more info on how you can access our institutional research please email sales@hedgeye.com.


No Gold Medals Here: Italy Leads Europe's Equity Market Losers

Takeaway: Outside the UK's FTSE, in the past year, European equity market drawdowns range from the German DAX's -3.4% to -28.98% for Italy's FTSE MIB.

Italy is getting smoked by the UK at both the Olympics and in real stock market returns – Italy’s MIB Index leads losers again this morning -1.1%, taking its crash back down to -30.8% from the 2015 peak in the Global Equity Bubble… #EuropeImploding (economically) remains a Top 3 Macro Theme @Hedgeye.

 

Meanwhile, in Germany...

 

It's been a rough year for European equity markets.

 

No Gold Medals Here: Italy Leads Europe's Equity Market Losers - europe 8 17

 

Outside the UK's FTSE, in the past year, European equity market drawdowns range from the German DAX's -3.4% to -28.98% for Italy's FTSE MIB.

 

No Gold Medals Here: Italy Leads Europe's Equity Market Losers - europe 8 17 2

 

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.


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 17

 

Daily Market Data Dump: Wednesday - sector performance 8 17

 

Daily Market Data Dump: Wednesday - volume 8 17

 

Daily Market Data Dump: Wednesday - rates and spreads 8 17

 

Daily Market Data Dump: Wednesday - currencies 8 17

 

Daily Market Data Dump: Wednesday - commodities 8 17


CHART OF THE DAY: Global Bond Yields Crashing ... Weird, Eh?

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. 

 

"... I hate to remind non-Global Macro investors on this, but for posterity I will this morning:

  1. European Bond Yields have crashed alongside GDP growth expectations – and European stocks have too
  2. Japanese Bond Yields have crashed alongside GDP growth expectations – and Japanese stocks have too

Weird, eh?"

 

CHART OF THE DAY: Global Bond Yields Crashing ... Weird, Eh?  - 08.17.16 EL Chart


Lone Rider

“I have been a lone rider so often for so long that I’m not even bothered by it anymore.”

-Benoit Mandelbrot

 

That’s a great quote from one of the greatest books I’ve ever read on risk management, The (Mis)Behavior of MarketsA Fractal View of Financial Turbulence, by Benoit Mandelbrot and Richard Hudson.

 

While sometimes I wish I could be harder core and say I’ve been a lone rider, I really can’t. The last 8 years of my career has really been a story of collaboration. Since 2008, without my teammates and clients pushing our every assumption I think I’d be as mediocre as many “macro” hedge fund returns and consensus growth forecasts have been.

 

As a firm, it’s never bothered us to be the lone rider. Instead of trying to be validated by an establishment of academics, strategists, and economists, we’ve had a lot more fun beating down their Old Wall. There’s a passion and perseverance to this. God willing, I have it in me to help my team carry on for years to come.

 

Lone Rider - 10 yr yield cartoon 08.10.2016

 

Back to the Global Macro Grind

 

Yeah, I get a little reminiscent at this time of the year. I get to sleep in for a few weeks (until 5-6AM which is huge!), write a few less Early Looks (as the sun is rising over Lake Superior – love that), and spend time with my family and friends.

 

Two weeks of this ends on Sunday. And I’ll be ready to crank back into top-gear for the final run of the season.

 

In some ways, this time of the year reminds me of the summer of 2007. That was a time when it was as clear as it is today that both the economic and profit cycles were slowing… but “stocks” wouldn’t go down.

 

I, being the inexperienced macro moron back then, was “too early” shorting US Equities from AUG-OCT … and I got fired on November 2nd, 2007 for being down less than 4%. The SP500 was down over 6% that month. And the rest is history.

 

This summer is different in that the latest “bear case” isn’t that #GrowthSlowing continues, equity multiples compress, and stocks crash (again).

 

No, no, no.

 

This time the bears are still the same bears you could have dialed up a year ago. The “valuation” bears on both bonds and their Safe-Yield proxies. These are the bears that are still clinging to their caves hoping for bond yields to “break-out.”

 

But how, precisely, do bond yields break-out if both US and Global Growth continues to slow?

 

Send me an email. I’d love to print a differentiated view on this macro matter. For now, everything I get sent on the topic is pretty much the same thing. “It’s crowded, expensive, unsustainable….”

 

Sounds like the bear case on stocks too, doesn’t it?

 

  1. “Stocks can’t make all-time highs every other day”… (they did in 2007, until OCT)
  2. “Stocks are super expensive, especially on GAAP earnings” … (true at all 3 bubble highs, 2000, 2007, 2016)
  3. “Everyone is long” … (true, from a net positioning perspective, in both stocks and bonds right now)

 

If the bond bears are wrong, can the perma US Equity bulls be wrong?

 

A) Sure, anything can happen

B) If Europe and Japan are leading indicators, yes

 

I hate to remind non-Global Macro investors on this, but for posterity I will this morning:

 

  1. European Bond Yields have crashed alongside GDP growth expectations – and European stocks have too
  2. Japanese Bond Yields have crashed alongside GDP growth expectations – and Japanese stocks have too

 

Weird, eh?

 

Not really. And this is the punch-line on why the USA is different (for now). When US GDP was tracking sub-1% in Q1, plenty of crashing in equity prices was happening into the FEB 2016 lows. Bond yields were crashing too.

 

When everything “bottomed” (allegedly in Q2) and GDP was barely > 1%, stocks and bonds ramped to all-time highs in sync. I called this American Goldilocks in an Early Look note last week.

 

But what happens if/when US GDP falls back below 1% again? What happens if Oil can’t recapture $51-52? What happens to the US #ProfitRecession in Q3 and Q4 and into 2017? How about credit spreads? Long-term Yields? Unicorns? Helicopters?

 

Oh boy.

 

Instead of buying bad companies like Hain Celestial (HAIN) “because they’re gonna be bought, bro” (before they have to report their real numbers) prospective buyers of “everyone can buy everyone” might actually do some accounting due-diligence…

 

Lord knows that those PE and Hedge funds who levered up long at this stage of the cycle in 2007 didn’t. In many ways, I guess they thought they were the smartest lone riders in the room back then too.

 

Our immediate-term Global Macro Risk Ranges are now:

 

UST 10yr Yield 1.47-1.61%

SPX 2165-2195

NASDAQ 5130-5269

Nikkei 16033-17105

VIX 11.02-14.65
USD 94.51-96.53
Oil (WTI) 40.08-46.92

 

Best of luck out there today,

KM

 

Keith R. McCullough
Chief Executive Officer

 

Lone Rider - 08.17.16 EL Chart


get free cartoon of the day!

Start receiving Hedgeye's Cartoon of the Day, an exclusive and humourous take on the market and the economy, delivered every morning to your inbox

By joining our email marketing list you agree to receive marketing emails from Hedgeye. You may unsubscribe at any time by clicking the unsubscribe link in one of the emails.

next