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McMonigle: Sell the OPEC Oil Production Freeze Nonsense

Does the OPEC rumormongering have you confused? Hedgeye Energy Policy analyst Joe McMonigle sifts through the rumors and speculation on The Macro Show today. He provides clarity on what's really going on and what likely lies ahead for oil prices.

 

Subscribe to The Macro Show today for access to this and all other episodes. 

 

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In Honor Of #NationalWaffleDay...

We can't confirm the rumor yet. But word on the street is Waffle House has officially named Janet Yellen its national spokesperson. According to unnamed sources, regional Fed Heads including San Francisco's John Williams and St. Louis' James Bullard have been offered similar positions at Denny's and IHOP, but are waffling on whether to accept their respective offers.

 

Happy Waffle Day amigos.

 

In Honor Of #NationalWaffleDay... - fed waffle


Sarcasm Alert: The U.S. Economy Is Absolutely Killing It! (A Peek Inside Existing Home Sales)

Takeaway: Existing Home Sales were down 1.6% year-over-year for the month of July.

Sarcasm Alert: The U.S. Economy Is Absolutely Killing It! (A Peek Inside Existing Home Sales) - existing home sales 8 24

 

Today's Existing Home Sales data showed July down -1.6% year-over-year. That's the worst level of demand since November. That matters because EHS makes up 90% of total transaction volume.

 

We're not surprised by this month's EHS downside and were largely expecting a July slowdown. Here's what Hedgeye Housing analysts Josh Steiner and Christian Drake in an institutional research note on July 21 following the much ballyhooed June data (which was largely the result of a holiday distortion):

 

"In aggregate, growth in EHS slowed to +3.0% YoY but made a new cycle high at 5.57M units. The gain wasn’t particularly surprising given the trend in PHS and noise in the relationship between the two series (PHS vs EHS) stemming from the March Easter distortion.  We’re more interested in next week’s Pending Home Sales data for June. Absent a moderate pickup and/or positive revision to May, the risk to EHS for July is to the downside."

In other words...

 

 

Additional thoughts...

 

QUESTION: How does declining Existing Home Sales fit into the hawkish Fed's rate hike calculus? Could they raise rates with 90% of the U.S. Housing market down 1.6% year-over-year?

 

ANSWER: Sure. They've been known to obfuscate the truth before.


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Volatility: How To Trade This #WickedChop

Takeaway: Trading US equity markets takes patience. I like to wait on selling equity Beta around VIX 11-11.5.

Volatility: How To Trade This #WickedChop - Volatility cartoon 09.02.2015

 

Volatility has been smashed (on the front end) alongside US Equity Volume (-26% yesterday vs. 1yr avg). There have only been 5 trading days in the last 30 with a VIX move of +/- 0.5%, but I like to wait on selling US Equity Beta around VIX 11-11.5. #Patience. #TradeTheChop

 

Speaking of Volatility...

 

#WickedChop continues w/ Oil Volatility (OVX) tracking higher (again) this morning off 34-35 support. WTI failed @Hedgeye TAIL risk resistance of $52.12 (again); our Energy Policy analyst Joe McMonigle had a very timely note up intraday yesterday saying fade the Iranian “freeze” noise. (Read McMonigle's "Oil/Iran: Sell The News!")

 

 

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Editor's Note: Here's Hedgeye CEO Keith McCullough explaining how to trade an environment in which volatility continues “shocking people to the upside.”

 


PREMIUM INSIGHT

REPLAY: About Everything | Q&A with Neil Howe - Credit Cards Lose Their Charge

REPLAY: About Everything | Q&A with Neil Howe - Credit Cards Lose Their Charge - AE thumbnail

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.


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 24

 

Daily Market Data Dump: Wednesday - sector performance 8 24

 

Daily Market Data Dump: Wednesday - volume 8 24

 

Daily Market Data Dump: Wednesday - rates and spreads 8 24

 

Daily Market Data Dump: Wednesday - currencies 8 24

 

Daily Market Data Dump: Wednesday - commodities 8 24


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