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Bond Bear Beat Down

Takeaway: In the past year, JGB 10yr yields are down 38bps on the most causal factor in all of macro right now, #GrowthSlowing.

Plenty of clever questions in the @Hedgeye inbox on why “JGB yields might rip” (higher)… and they just went lower (again) instead, back down to -0.07% on the JGB 10yr this morning w/ no support to -0.27-0.28%.

 

As Hedgeye Senior Macro analyst Darius Dale wrote earlier this morning:

 

"Investor consensus is far too focused on the risk of policy action (or inaction) out of the BoJ perpetuating a potentially violent backup in bond yields globally and not nearly enough on the underlying drivers of “lower-for-longer” and negative-yielding debt securities – drivers that are set to remain in place for quite some time."

 

In the past year, JGB 10yr yields are down 38bps on the most causal factor in all of macro right now, #GrowthSlowing.

 

Bond Bear Beat Down - japan gov bond 9 20

 

So why in God’s good name would you “invest” at this stage of the #GrowthSlowing cycle as the #BeliefSystem that the Fed, ECB, BOJ, PBOC, BOE, etc. breaks down?

 

Bond Bear Beat Down - central bankers cartoon 06.29.2016

 

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.


Daily Market Data Dump: Tuesday

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: Tuesday - equity markets

 

Daily Market Data Dump: Tuesday - sector performance

 

Daily Market Data Dump: Tuesday - volume

 

Daily Market Data Dump: Tuesday - rates and spreads

 

Daily Market Data Dump: Tuesday - currencies

 

Daily Market Data Dump: Tuesday - commodities


CHART OF THE DAY: A Chance To Buy Long Bonds ... Again

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.

 

"... In my own 7 game series, this is game 6… and I’m down by a goal going into the 3rd period. As you can see in the Chart of the Day, since this is the 6th “rates are gonna rip” scare in the last 16 months, my team has already won 5 games in a row and now we’re just playing for fun."

 

CHART OF THE DAY: A Chance To Buy Long Bonds ... Again - 09.20.16 EL Chart


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Cartoon of the Day: The Great Debate

Cartoon of the Day: The Great Debate - Deflation v reflation cartoon 09.19.2016

 

In today's Early Look, Hedgeye CEO Keith McCullough took the Fed to task for it's use of the word "transitory" in describing anything that doesn't fit its narrative, namely deflation. He writes, "Why are crashing inflation expectations (Oil prices for example from $105/barrel) “transitory”, but bear market bounces not equally transient?"


Beware of Fed’s ‘Blunt Instrument To The Face’

In this excerpt from The Macro Show today, Hedgeye CEO Keith McCullough responds to a subscriber’s question on monetary policy and the investing impact of a Fed rate hike.


7 Reasons Market Risk 'Significantly Exceeds' Reward

Takeaway: We think the "risk-reward" of the U.S. stock market is tilted decidedly to the downside.

7 Reasons Market Risk 'Significantly Exceeds' Reward - S P 500 cartoon 06.08.2016

 

Hedgeye Financials analyst Josh Steiner listed the many reasons why we think the "risk-reward" of the U.S. stock market is tilted decidedly to the downside.

 

Here's a brief recap from a recent edition of The Macro Show

 

  1. You’ve got small business loans and credit quality deteriorating, an enormous part of the economy.
  2. You’ve got the rest of the lending complex beginning to tighten.
  3. You’ve got the Fed in a position in which it's not able to do much about it.
  4. You’ve got a broad swath of economic indicators getting worse.
  5. You’ve got market valuation up on a rope.
  6. You’ve got the duration of the labor cycle very extended.
  7. And then there's this curious case of significant decline in maternity rates taking hold across America.

 

As Steiner summarized:

 

"To me, it all paints a very fascinating picture of risk versus reward in the marketplace right now, where I think it's pretty plain that risk significantly exceeds what’s being priced into stocks and it's not that uncommon an occurence. In October 2007, it should have been pretty plain to many people that things were going to go from bad to worse when the market was at an all-time high. And so the fact that the market hit a very high level is not a defensible argument for why we shouldn’t be concerned about all of this deterioration. It's actually exactly the opposite."


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