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PREMIUM INSIGHT

Twitter: Betting On The Delusions Of An ‘Eccentric Billionaire’

Twitter: Betting On The Delusions Of An ‘Eccentric Billionaire’ - Screen Shot 2016 10 05 at 12.19.56 PM

Twitter's fundamentals may be irrelevant. It may only need one eccentric billionaire who isn’t scared of his fans to make this happen.


David Stockman Unplugged: ‘Casino Capitalism Fueling Mutant Markets’

Outspoken former Reagan budget director and bestselling author David Stockman chats with Hedgeye CEO Keith McCullough in this no-holds-barred discussion about his new book, “Trumped.” Stockman pulls no punches on what believes is an out-of-control Federal Reserve, mutant markets and a vulnerable economy. According to Stockman, “The Fed has fallen so far down the Keynesian rabbit hole, it can’t see daylight.”


Why Winter Is Coming For Bond Bears...

Takeaway: Europe's Bond Bears get paid if the continent's growth accelerates. That ain't happening.

Why Winter Is Coming For Bond Bears... - draghi bear

 

Yesterday, rumors were floated that the ECB would wind down ("taper") its €80 billion per month bond-buying stimulus. European bond yields backed up on the news (see chart below). As Hedgeye CEO Keith McCullough wrote in a note to subscribers earlier this morning:

 

"It wasn’t just a U.S. Dollar/U.S. Treasury ramp yesterday, it was another bounce (to lower-highs) in European Yields too on some ridiculous rumor that “the ECB is going to taper” – the ECB denied that, obviously, this morning but there are plenty of 2016 Bond Bears out there looking to get Fed. Winter is coming. And they’re starving…"

 

Bond Bears get fed if European growth accelerates. That ain't happening. (Note: One of our 3Q16 Macro themes is #EuropeImploding.)

 

Maybe the Bond Bears should go back into hibernation...

 

Why Winter Is Coming For Bond Bears... - global 10yr bonds


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Buy Long Bonds (Another Opportunity To Fade The Fed)

Takeaway: We say keep buying Long Bonds (TLT) and ignore hawkish chatter from regional Fed heads.

Buy Long Bonds (Another Opportunity To Fade The Fed) - ust 10 5 2

 

The market is giving you another opportunity to buy LONG BONDS ($TLT).

 

Yesterday, Richmond Fed head Jeffrey Lacker said he sees a "strong case" for raising interest rates. He even suggested rates could rise a lot. The market took him at his word. The 10-year Treasury yield is at 1.69% today. 

 

As you can see in the chart below, with every rate hike freakout (rising yields) it's been a great call to buy bonds. In other words, the Fed has wanted to hike rates all year but we continue to get #GrowthSlowing data. As a result, the Fed takes rate hikes off the table and bond yields fall. (TLT is up 12% year-to-date versus 5% for the S&P 500)

 

In short, stop hyperventilating. Stick with what's worked all year.

 

More from Hedgeye:


Early Look: Golden Opportunity

Takeaway: This is a brief (complimentary) excerpt from this morning's Early Look note.

“You should acquire physical gold now and put your mind at ease.”

-Jim Rickards

 

Technically speaking (and oh boy do those “technicals” drive emotion), yesterday was the biggest buying opportunity in Gold in the last 3 years. But why the panic in something that has generated such tremendous returns during the #GrowthSlowing panic of 2016?

 

And why is it that everyone in perma bull SPY space understands the concept of buying dips in Amazon (AMZN) but can’t quite wrap their head around the investing exercise when it comes to buying either Long-term Bonds or Gold?

 

As Jim Rickards advises in The New Case for Gold: “Don’t try to time the panic; by the time it’s visible it will already be too late, and the small investor will not be able to get physical Gold. The prudent course is to buy Gold now, have it in a safe place, and when the Gold buying panic comes, you’ll be fine.” (pg 151)

 

Back to the Global Macro Grind

 

Panic? Uh, yeah. Not that memories for the Old Wall and its manic media extend beyond the most recent macro tourist headline, but I assume that the prudent Global Macro investors recalls how Gold did when most US stock market bulls panicked in JAN-FEB 2016.

 

That’s when Gold broke out...

 

Click here to continue reading (subscribe to the Early Look).

 

Early Look: Golden Opportunity - z gold


CHART OF THE DAY | Gold: Buy Or Panic?

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.

 

"... Not that memories for the Old Wall and its manic media extend beyond the most recent macro tourist headline, but I assume that the prudent Global Macro investors recalls how Gold did when most US stock market bulls panicked in JAN-FEB 2016.

 

That’s when Gold broke out."

 

CHART OF THE DAY | Gold: Buy Or Panic? - 10.05.16 EL Chart


Early Look

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