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This Indicator Hits Level Not Seen Since Recession

The TED spread has our attention. With the market pricing in a drastic sudden increase in counterparty risk, the TED rose by 6 bps two weeks ago and by another 11 bps last week to 69, surpassing the 2011 spike and moving to levels we haven't seen since May 2009. 

 

This Indicator Hits Level Not Seen Since Recession - ted spread 9 26

 

Editor's Note: This is a brief excerpt from a research note written by Hedgeye Financials analyst Josh Steiner. To learn more about our institutional research ping sales@hedgeye.com.


Poll of the Day: Who Will Lose Tonight's Presidential Debate?

Takeaway: What do you think? Cast your vote. Let us know.


Why We're Sticking With Low-Beta

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 LookClick here to subscribe for $1 a day.

 

Why We're Sticking With Low-Beta - Growth cartoon 06.03.2015

 

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:

 

  1. Low-Beta Stocks were up +2.3% last week to +11.8% YTD
  2. 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.


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All Good? Global Defaults Up +61%

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

 

(Drumroll please)

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.

 

All Good? Global Defaults Up +61% - default

 

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.


CHART OF THE DAY: Fed Fade

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:

  1. SP500 -0.44
  2. Oil -0.70
  3. CRB Index -0.73
  4. Gold -0.74"

CHART OF THE DAY: Fed Fade - 09.26.16 EL Chart


REPLAY! This Week On HedgeyeTV

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 ShowReal-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.)

 

Enjoy!   

 

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)

 

REPLAY! This Week On HedgeyeTV - AE thumbnail 

 

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.


Hedgeye Statistics

The total percentage of successful long and short trading signals since the inception of Real-Time Alerts in August of 2008.

  • LONG SIGNALS 80.45%
  • SHORT SIGNALS 78.38%
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