Takeaway: Who will you choose? An intoxicated monkey versus Steve Liesman, Mark Zandi, Janet Yellen & Jose Canseco.
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.
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Takeaway: A new addition to our (very short) list of countries added to the Global Equity long side: Taiwan.
Yep. Long Taiwan (TAIEX Index or EWT). We added that to our Global Equity LONG list while I was away last week. Standard Hedgeye GIP Model process reasoning as Taiwan moves into what we call Quad 1 (or 2) in the back half of 2016. Not many countries are…
Here's the brief breakdown of Taiwan, as it looks in our GIP (Growth, Inflation, Policy) model via Senior Macro analyst Darius Dale:
- Growth: generally trending higher across the preponderance of key high-frequency data
- Inflation: generally trending higher across the preponderance of key high-frequency data
- Policy: getting easier at the margins
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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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.
"... The productivity point is one that one of the world’s largest asset managers made to us in recent meetings in California. The PM asked whether all this “Fed Watching” was distracting companies from investing in real things as opposed to the next frontier of rumors…
Even if you go Ex-Energy, Ex-GAAP-Earnings, Ex-GDP with your narrative that everything ZIRP, NIRP, TWIRP is good, you’ll still have a very hard time convincing a rational human being who isn’t bought and paid for by the system that US Productivity at generational lows is…"
Year-to-date Fed policy:
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Takeaway: The bottom just dropped out of Vancouver, as the home sales Y/Y growth rate fell from +0.6% in June to -18.9% in July.
Editor's Note: Below is a brief excerpt from the second edition of our Hedgeye Canada Tracker research product. Spearheaded by Josh Steiner, the goal is to help investors understand the trends and spot inflection points in the Canadian housing market by tracking 10-12 different housing data series across Canada and 8 different series at the metro level in Toronto, Vancouver, Calgary and Montreal, and presenting them in a hyper-simple format. Email firstname.lastname@example.org for more info and how you can subscribe.
As Steiner writes:
“We track Chinese FX reserves as a proxy for foreign real estate demand. The view is that $2.75 Trillion is the threshold above which China needs to maintain its FX Reserves in order to prevent a disorderly devaluation of the Yuan. As those FX reserves converge on that threshold, the pace of money leaving the country -- our proxy for foreign real estate demand -- will slow out of necessity as China clamps further down on loopholes and avoidance of the $50,000/per person/per year limit.”
Why does this matter?
According to recently released Canadian economic data for the month of May, real estate has emerged as the third largest component of the Canadian economy, accounting for half of all GDP growth.
As such, housing sector weakness could negatively impact growth.
And it’s happening. “Vancouver home sales put up a massive deterioration, as the bottom dropped out of the Y/Y growth rate,” Steiner writes. “The Y/Y rate went from +0.6% in June to -18.9% in July. Importantly, this decline occurred even before the August implementation of a 15% foreign buyer tax, which should further drag down sales.”
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