Takeaway: What do you think? Cast your vote. Let us know.
Takeaway: Low-beta continues to beat high-beta. We're sticking with the call.
Editor's Note: This is a complimentary excerpt from today's Early Look. Click here to subscribe for $1 a day.
WHILE IT MAY SEEM LIKE EVERYONE ON OLD WALL TV NAILS IT
...in Dow Bro terms every time the Fed is forced to pivot back to dovish on #GrowthSlowing data, your returns have been higher being longer of Long-term Bonds, Utilities, REITS, and Gold.
That’s right. Both the absolute and relative returns are higher, but so are the risk adjusted (volatility adjusted) payouts. Not to be mistaken for “bad (data) = good” weeks, on days (like today) when bad = bad, Down Rates, Down SP500 happens.
Another way to express a lower-volatility, higher return portfolio in 2016 has been buying low beta, safe-yielding, stocks. If you look at the mean performance of the top quintile vs. bottom quintile of SP500 companies, here’s that story:
- Low-Beta Stocks were up +2.3% last week to +11.8% YTD
- High-Beta Stocks were up +0.8% last week to +6.2% YTD
Again. You get it. Everyone was a winner last week, but being long High-Beta lost to those of us who are long Low-Beta. This is called making a conscious portfolio bet that #GrowthSlowing will pay-out Low-Beta, as an investing Style Factor, over the sexier stuff.
Takeaway: Risk continues to rise around the world.
Looking at a global defaults tally from S&P, there were 5 new defaults last week. That brings the global tally to
127 Year to date
That's up +61% Y/Y. The sustained weakness in the energy patch isn’t only hurting energy companies – Investors who sank money into a rebound are also under water.
A very active PE fund in Texas is now asking investors to fork over hundreds of millions of dollars to bolster the troubled funds ... or risk losing the billions they have already invested.
Editor's Note: The snippet above is from a note written by our Macro team and sent to subscribers this morning. Click here to learn more.
The total percentage of successful long and short trading signals since the inception of Real-Time Alerts in August of 2008.
LONG SIGNALS 80.43%
SHORT SIGNALS 78.37%
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.
"... There was literally no other call to make heading into last week’s FOMC interest rate decision, other than that Janet Yellen’s Fed would fade. The US Dollar went down on that – rates did too. Stocks, Bonds, Commodities ripped.
Why? On a short-term basis here are some current 30-day inverse correlations vs. the US Dollar Index:
- SP500 -0.44
- Oil -0.70
- CRB Index -0.73
- Gold -0.74"
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 Show, Real-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.)
1. Aronstein: Here’s How Every Bull Market Always Ends (9/24/2016)
Industry veteran and portfolio manager Michael Aronstein, CIO of Marketfield Asset Management, has made a career out of making the big, contrarian macro calls that no one else saw coming. In this brief excerpt from a longer “Real Conversations” interview, Aronstein sat down with private investor Buddy Carter and Hedgeye CEO Keith McCullough to discuss why the markets and economy look increasingly vulnerable.
2. How Trump & Clinton Can Win Monday’s ‘Super Bowl’ Debate (9/23/2016)
In this video edition of the Capital Brief, Hedgeye Potomac Chief Political Strategist JT Taylor discuss Monday’s Presidential Debate between Donald Trump and Hillary Clinton.
3. Replay | About Everything with Neil Howe (9/22/2016)
In this complimentary edition of About Everything, Hedgeye Demography Sector Head Neil Howe discusses what he calls the Homeland Generation, America's youngest generation of kids coming after Millennials. Howe explains the investing implications of this new generation.
Click here to read Howe's associated About Everything written piece.
4. Real Conversations: Michael Aronstein ‘Unplugged’ on the Biggest Market Risks (9/22/2016)
Industry veteran and portfolio manager Michael Aronstein, CIO of Marketfield Asset Management, sits down with private investor Buddy Carter and Hedgeye CEO Keith McCullough in this edition of “Real Conversations.” The trio discusses critical developments facing investors right now and why the markets and economy look increasingly vulnerable.
5. Pandora: 2 Reasons Why We’re Now Bullish (But Still Dislike The Company) (9/21/2016)
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.
6. Best Idea Long: Why Expedia Holds All The Cards (9/20/16)
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.
7. Beware of Fed’s ‘Blunt Instrument To The Face’ (9/19/2016)
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.
8. Emerging Markets: 4 Countries To Buy & 3 To Sell (9/19/2016)
In this brief excerpt from The Macro Show earlier today, Hedgeye CEO Keith McCullough and Senior Macro analyst Darius Dale discuss the emerging market countries they like and don’t like.
Click here to subscribe for free to our YouTube channel.
Our cartoonist Bob Rich captures the tenor on Wall Street every weekday in Hedgeye's widely-acclaimed Cartoon of the Day. Below are his five latest cartoons. We hope you enjoy his humor and wit as filtered through Hedgeye's market insights. (Click here to receive our daily cartoon for free.)
1. NIRP (9/23/2016)
Japan is the world's monetary policy playground.
2. Janet In Wonderland (9/22/2016)
"Asset valuations are not outside of historical norms," Fed head Janet Yellen said at yesterday's FOMC press conference. Is Yellen living in Wonderland?
3. Hangin' On (9/21/2016)
LOL. "In general, I would not say that asset valuations are out of line with historical norms," Janet Yellen said at today's FOMC press conference.
4. Hawkish or Dovish? (9/20/2016)
Incessant Fed flip-flopping from hawkish to dovish (6x in 8 months!?) is simply insane.
5. The Great Debate (9/19/2016)
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?"
Click here to receive our daily cartoon for free.
daily macro intelligence
Relied upon by big institutional and individual investors across the world, this granular morning newsletter distills the latest and most vital market developments and insures that you are always in the know.