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It Ain't Over Till The Fed Lady Sings But...

It Ain't Over Till The Fed Lady Sings But... - Fed lady cartoon 06.25.2016

 

It ain't over 'til the Fed lady sings (at Jackson Hole on Friday) but it seems like a hawkish consensus if emerging on the FOMC.

 

In a speech at the Aspen Institute in Aspen, Colorado on Sunday, Federal Reserve Vice Chairman Stanley Fischer told reporters “we are close to our targets” in the jobs market and inflation. Not growth, though. On that front, the Fed's long-run GDP estimates have been consistently revised to the downside.

 

It Ain't Over Till The Fed Lady Sings But... - 2 dj

 

No matter, Fischer says, everything's great. In the footnotes to Sunday's speech, the vice chairman writes, “Looking ahead, I expect GDP growth to pick up in coming quarters, as investment recovers from a surprisingly weak patch and the drag from past dollar appreciation diminishes.” 

 

Fischer's comments are generally in-line with his colleagues. Last week, New York Fed head Bill Dudley also laid out a case for ignoring lackluster growth and hiking on "strong" labor market data. (We question just how strong the labor market is here.) On that, the market has bid up rate hike probabilities for December back to pre-Brexit levels. 

 

It Ain't Over Till The Fed Lady Sings But... - fed hike brexit

What do you do with that?

 

Here you go. 

(Buy Long Bonds)


PREMIUM INSIGHT

About Everything: Credit Cards Lose Their Charge

About Everything: Credit Cards Lose Their Charge - cards

In this complimentary edition of About Everything, Hedgeye Demography Sector Head Neil Howe discusses the future of the credit card industry. Howe breaks down the key takeaways and explains the broader implications for investors.


The Jackson Hole Jawbone: A Good Spot To Be Buying Long Bonds

Takeaway: The world will be reminded of reality on Friday when US GDP comes in at 1%.

The Jackson Hole Jawbone: A Good Spot To Be Buying Long Bonds - Fed bunny cartoon 08.19.2016

 

In case you missed It...

 

BREAKING: Fed’s Fischer Signals Close To Targets On Jobs and Inflation (ex-GDP)

 

Yeah. Definitely. As a central-planning smoother of the US economy, you definitely have to back out 1% GDP if you’re going to proclaim to have nailed it. Reminder: if they actually use their “target” (+2% as the Deflator) real GDP will fall closer to 0% than rise to +2-3%.

 

But have no fear, the latest Fed forecast is here! Fischer “expects GDP to accelerate in the next few quarters”… which is almost mathematically impossible if inflation continues to rise (in rate of change terms) and real consumption slows from its cycle peak.

 

Good luck with that!

 

That's why this is a good spot to be buying bonds (and stocks that look like bonds) ahead of Jackson Hole, as the world will be reminded of the 1% USA GDP reality on Friday (GDP report). The risk range on the 10-year US Treasury is 1.48-1.61%.

 

The Jackson Hole Jawbone: A Good Spot To Be Buying Long Bonds - GDP cartoon 02.29.2016

 

*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.


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Daily Market Data Dump: Monday

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: Monday - equity markets 8 22

 

Daily Market Data Dump: Monday - sector performance 8 22

 

Daily Market Data Dump: Monday - volume 8 22

 

Daily Market Data Dump: Monday - rates and spreads 8 22

 

Daily Market Data Dump: Monday - currencies 8 22

 

Daily Market Data Dump: Monday - commodities 8 22


CHART OF THE DAY: Dispelling The Myth That Everyone Is Bearish

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.

 

"... 'Bearish positioning' means the 1-year z-score is A) negative and/or B) really negative (i.e. when it’s more negative than a -2.0x). US Dollar and British Pound have 1-year z-scores of -0.8x and -2.5x, respectively, as of last week.

 

So what the heck does it all mean? At 11 VIX can stocks never go down as long as GDP isn’t greater than 2%, but not less than 1%? How about long-term bonds and their “safe-yield” proxies – is it over for them, but never for high-beta-low-quality?"

 

CHART OF THE DAY: Dispelling The Myth That Everyone Is Bearish - 08.22.16 chart


REPLAY! This Week On HedgeyeTV

Our deep bench of analysts take to HedgeyeTV every weekday to update subscribers on Hedgeye's high conviction stock ideas and evolving macro trends. Whether it's on The Macro ShowReal-Time Alerts Live or other exclusive live events, HedgeyeTV is always chock full of insight.

 

Below is a taste of the most recent week in HedgeyeTV. (Like what you see? Click here to subscribe for free to our YouTube channel.)

 

Enjoy!   

 

1. Why Target Shares Have 20% Downside From Here (8/20/2016)

 

 

In this excerpt from The Macro Show on Friday, Hedgeye Retail analyst Alec Richards explains why Target shares have significant downside from today’s levels.

 

2. Can The ‘Let Trump, Be Trump’ Strategy Beat Clinton In Election 2016? (8/19/2016)

 

 

In this Capital Brief video Q&A, Hedgeye Potomac Chief Political Strategist JT Taylor the recent shakeup in Donald Trump’s campaign team and a shift in strategy for Hillary Clinton.

 

3. Is The Healthcare Bubble About To Burst? (8/18/2016)

 

 

In this brief excerpt from The Macro Show, Hedgeye CEO Keith McCullough and Demography Sector Head Neil Howe respond to a subscriber’s question about whether the healthcare sector is a bubble that’s about to pop.

 

4. About Everything | Augmented Reality: Better Than Virtual? (8/17/2016)

 

 

In this complimentary edition of About Everything, Hedgeye Demography Sector Head Neil Howe discusses the media hype surrounding virtual reality versus "the next big thing [that] may already be sitting in your pocket: augmented reality." Howe breaks down the key takeaways and explains the broader implications for investors.

 

Click here to access the associated About Everything slides.

Click here to read Howe’s associated About Everything piece.

 

5. McCullough: Don’t Hyperventilate, Buy Protection (8/16/16) 

 

 

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.”

 

6. Intel: This Is As Good As It Gets In The Hardware Space (8/16/2016)

 

 

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.

 

7. Australia’s Housing Bubble Is A Massive Powder Keg (8/15/2016)

 

 

In this brief excerpt from The Macro Show, Hedgeye Financials analyst Josh Steiner discusses some disconcerting new developments related to Australia’s housing bubble. 

 

Click here to subscribe for free to our YouTube channel.


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