CHART OF THE DAY: Another Ugly Economic Indicator... Should The Fed Raise Rates?

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.


"... Got the latest “transports” data?

  1. Class 8 new truck orders at the lowest level since August 2010 in both absolute and rate of change terms (-56% y/y)   
  2. NA total commodity carloads originated continues tracking down over -5% Y/Y since March 2015 – no bounce whatsoever
  3. Commodity carloads down -11% y/y. Largest commodity carload declines in Petroleum products (-22%) and Coal (-27%) which are obvious. Other areas of weakness are forest products (-7.5%), Metals (-6.1%), minerals (-3.6%), Farm/Food products (-3.4%)"

So maybe the Fed should “raise rates” today. That’s neither an empty nor a clever theory. That would just be dumb.


CHART OF THE DAY: Another Ugly Economic Indicator... Should The Fed Raise Rates? - 09.21.16 EL Chart

Pandora: 2 Reasons Why We’re Now Bullish (But Still Dislike The Company)

Hedgeye Internet & Media analyst Hesham Shabaan recommended shorting Pandora Media (P) from December 2014 until earlier this year. Recently, he’s flipped to the long side. For now. Shabaan explains why in this excerpt from The Macro Show yesterday.


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So Much For The Ackman Pop ... Next Stop For Chipotle? $250

Takeaway: The Chipotle shareholder carnage continues as investors fade disclosure of Bill Ackman's 9.9% stake.

So Much For The Ackman Pop ... Next Stop For Chipotle? $250 - chipotle ackman 

Hours after Hedgeye Restaurants analyst Howard Penney hosted his Chipotle (CMG) short call on September 6th, Bill Ackman's Pershing Square Capital disclosed a 9.9% stake in Chipotle. The stock jumped on the news. 


But then, as it often does, reality set in... Chipotle's shares are down -9% from the peak of the Ackman hype.


Just as Penney predicted hours after the news...


And to be clear, he's reiterating the call today.


hungry for more?


For a good overview of Penney's short call on the company see the CNN Money story, "Why Chipotle could crash another 50%." To read Penney and analyst Shayne Laidlaw's response to Ackman's Chipotle stake after it was disclosed read, "Pershing Has Stepped In Front of a Ticking Time Bomb."


Finally, below is short video in which Penney responds to an institutional client's question about the "smoking gun" that will ultimately take down Chipotle.



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Cartoon of the Day: Hawkish or Dovish?

Cartoon of the Day: Hawkish or Dovish? - Fed hawkish dovish cartoon 09.20.2016

Incessant Fed flip-flopping from hawkish to dovish (6x in 8 months!?) is simply insane. What will they do at Wednesday's FOMC meeting? Tell us what you think by casting your vote in our Poll of the Day here.


Best Idea Long: Why Expedia Holds All The Cards

Best Idea Long: Why Expedia Holds All The Cards - HETV macroshow thumb expedia 9.20.2016

In this excerpt from The Macro Show, Hedgeye Internet & Media analyst Hesham Shaaban lays out our Best Idea Long call on Expedia and why the company’s HomeAway acquisition is a “considerable opportunity” relative to Wall Street’s expectations.

Did The Buyback Boom Just Go Bust?

Takeaway: After hitting a post-recession high, S&P 500 company share buybacks fell -6.8% y-o-y in the second quarter.

Did The Buyback Boom Just Go Bust? - bull1

is the tide turning?


Consider this. After hitting a post-recession high in 2Q16, FactSet reports today that S&P 500 buyback activity tumbled -6.8% year-over-year in 2Q16. 


Here's the key excerpt and chart from the FactSet data:


"Companies in the S&P 500 spent $125.1 billion on share buybacks during the second quarter, which marked the smallest quarterly total since Q3 2013. This comes after a first quarter that saw buybacks for the index hit a new post-recession high. Aggregate buybacks in Q2 represented a 6.8% decline from the year-ago quarter, which was the largest year-over-year decrease since Q1 2015. This Q2 decline came during a quarter that saw the S&P 500 index hit record-high price levels. On a trailing twelve-month basis, shareholder buybacks amounted to $592.9 billion at the end of the second quarter. This was a 6.8% increase from the same time period a year ago. The TTM buyback total at the end of Q2 marked the fourth largest amount going back to the start of 2005, despite this quarter’s decline."


Did The Buyback Boom Just Go Bust? - buyback 9 20


This dour question mark is a far cry from the headlines we saw just two months ago when the buyback boom was cited as justification for why the S&P 500 was hitting all-time highs. Indeed, as the Wall Street Journal wrote, "There's No Need To Fear the Buyback-Boosted Stock Market." 


We advised otherwise, here(Note: The S&P 500 is down -0.9% since then.)


***To understand why we think buybacks, corporate profits, consumer confidence, the labor market etc, etc, etc, are all past peak and U.S. growth continues to slow, watch this 6-second animated clip Hedgeye CEO Keith McCullough in "An Animated History of U.S. #GrowthSlowing" below.


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