• run with the bulls

    get your first month

    of hedgeye free


All Aboard the Trump Train! Consumer, Homebuilder & Business Confidence Rising

All Aboard the Trump Train! Consumer, Homebuilder & Business Confidence Rising - confidence


Whether you look at Consumer Confidence, Homebuilder Confidence or Small Business Optimism, the American people are riding an unparalleled post-Election Day wave of euphoria. Let's call it "Trumphoria." The question now is, will will it hold?


We think so (at least until GDP is reported for the first quarter of 2017, but that's not until April).


Here's a brief recap of recent economic exuberance via Hedgeye U.S. Macro analyst Christian Drake in this morning's Early Look

1. Homebuilder Confidence

The National Association of Homebuilder HMI jumped +7pts to a fresh cycle high of 70 in December, Builder Confidence is no exception. 


The +7 pt increase in the headline reading marks the largest sequential increase in 4 years while the +9 pt levitation in the Expectations series was the largest since the inflection off the housing market trough in 2012. As can be seen in the chart below, historically, sequential increases of similar magnitude have typically been confined to early, post-recession bounces off of confidence troughs and are a particular rarity in late-cycle, rising rate environments. 


All Aboard the Trump Train! Consumer, Homebuilder & Business Confidence Rising - CoD1 HMI Expectations

2. Consumer Sentiment

The University of Michigan’s Consumer Sentiment index popped to 98.0 in early December vs. 93.8 in November.


All Aboard the Trump Train! Consumer, Homebuilder & Business Confidence Rising - 12.12.16 EL Chart  2

3. Consumer Confidence

The Conference Board’s November Consumer Confidence reading of 107.1 was +8.6% higher than the October reading of 98.6. That’s a new cycle and year-to-date high


All Aboard the Trump Train! Consumer, Homebuilder & Business Confidence Rising - 12.02.16 EL Chart

4. Small Business Optimism

Small business optimism, as relayed through the NFIB Outlook/Expectations Index, was up the most, sequentially, since 2009!


All Aboard the Trump Train! Consumer, Homebuilder & Business Confidence Rising - small biz opt

So, Central Bankers Bought $24 Trillion in Assets… What Exactly Did We Get?


For those of you counting at home, the world’s top 50 global central banks have cut interest rates (drum roll please) almost 700 times since the collapse of Lehman Brothers.


That’s a lot of cuts. Combine that astounding figure with almost $24 trillion worth of asset purchases, and then ask yourself the following question:


What exactly did we all get from this unprecedented amount of stimulus?


Not much according to economist and author Daniel Lacalle. Here in the United States, the economy has continued to slow down, from a 3.3% year-over-year growth rate in the first quarter of 2015 to 1.6% today. This happened despite a ballooning in the Federal Reserve’s balance sheet to an historic, eye-popping $4.4 trillion.


Here’s what Lacalle had to say on this subject with Hedgeye CEO Keith McCullough in the video excerpt above:


“There’s a concept that we as investors need to think about, especially when we’re doing global macro. What we’re talking about here is return on invested capital. If you’ve spent $24 trillion fiscal/monetary stimulus, and you get 1.6% economic growth, my friend, if that isn’t an economy slowing down I don’t know what you’re talking about!”


Want more? Click here to watch the entire interview of Lacalle and McCullough, “HedgeyeTV Exclusive: Italy’s Banking Crisis & What it Means for Europe.”

Cartoon of the Day: Financial Market GPS

Cartoon of the Day: Financial Market GPS - Recalculating market cartoon 12.15.2016


Click here for a brief recap of the post-Election Day changes in financial markets and a closer look at our 'Trump Tracker.'

investing ideas

Risk Managed Long Term Investing for Pros

Hedgeye CEO Keith McCullough handpicks the “best of the best” long and short ideas delivered to him by our team of over 30 research analysts across myriad sectors.

5 Things Investors Should Watch Ahead of Inauguration Day

5 Things Investors Should Watch Ahead of Inauguration Day - trump white house


In a little over a month, Donald Trump will be inaugurated and take control of the White House. As an exuberant stock market and new record highs reveal, investor expectations are very high for our new president. For example, since Election Day, the Russell 2000 has rallied almost 15%.


Can Trump deliver? He has promised to make a number of significant changes -- from tax policy to rolling back Obamacare -- but a lot can happen in between Trump's tweets today and when a bill ultimately gets passed. Here's what all investors should keep a close eye on.


#TaxReform #Taxes


While the main post-election tax focus has centered mostly around cutting the corporate tax rate, corporations are now pushing back against talk of a proposal to tax imports. The argument is that the border tax adjustment tax will hurt global supply chains and affect U.S. companies that import everything from oil to coffee.


And, corporations feel the tax will distort markets and increase consumer prices creating an uneven playing field between companies with overseas supply chains and those that only use American made inputs. It isn’t all bad for U.S. companies though as export revenues would be excluded from company tax bases essentially giving exporters a subsidy.


#RexTillerson #ExxonMobil


5 Things Investors Should Watch Ahead of Inauguration Day - trex


Despite pressure from Democrats and some Republicans, Trump named ExxonMobil CEO Rex Tillerson as the nation’s chief diplomat in a shot across the Senate’s bow reminding them that he won’t be denied. Some Senators who initially cast doubt over the pick are starting to soften their rhetoric saying they will keep an open mind. We’ll soon see if Republican Senators continue to talk a big game, but buckle when faced with the threat of the towering Trump.


#Obamacare #Scotus


The Trump Team is looking to take on a Herculean task in his first 100 days with goals to move a budget (FY 2017), reverse course on a number of Obama-era regulations and repeal the ACA with their first “performance review” on April 30th.  Don't forget Senate confirmation of Trump's cabinet and potential SCOTUS picks. On top of that both the president-elect and Congress will face more daunting deadlines than those that are just self-imposed.


Following a year with very few legislative milestones, the 2017 calendar will be jam-packed with other deadlines continuing with raising the debt-limit -March, a second budget (FY 2018) and don’t forget that in the fall, Children’s Healthcare Insurance Plan, FAA, and National Flood Insurance Program all expire. After coasting for most of 2016, Congress will have their work cut out for them and Republicans are scheduling more days in session than in any years since their 2011 takeover.


#Ivanka #FirstLady


While Melania Trump may technically be the first lady-in-waiting, the president-elect’s daughter, Ivanka, will hold the role in all but name. Ivanka is expected to occupy the office historically reserved for the First Lady in a move that shows just how much power she will wield in the Trump presidency allowing her to advance her pet policies  - climate change and gender equality.


Moveover, Majority Leader McConnell and wife/Transportation Secretary-designate Elaine Chao, it’s looking more and more like Ivanka and husband Jared Kushner will be the first power couple in DC come January 20.


#PaulRyan #GOPFuture


5 Things Investors Should Watch Ahead of Inauguration Day - paul ryan images


Trump took his victory tour to Wisconsin, home of his biggest steal of the Election 2016. With him were former rival and Governor Scott Walker as well as Wisconsin native and Speaker Paul Ryan. The Trump/Ryan relationship was on full display and gave us a preview of how their newfound alliance will play out given that they need one another to succeed. Trump praised Ryan comparing him to a fine glass of wine, but then sheepishly warned the comparison only lasts as long as Ryan doesn’t play against him.

McCullough: ‘If You Want To Repeat the Same Mistakes, Go Be A Cleveland Browns Fan’


There are a number of good reasons why Hedgeye is the fastest-growing financial services company of its kind. One of them is that since our firm’s inception over eight years ago, we’ve embraced a rigorous, non-consensus approach to analyzing the markets and economy. In other words, we ignore the crowd and march to the beat of our own drummer. Our process, while not perfect, is correct far more than not.


Take bonds for example. As many people know, we were the bond bulls (since August 2014). The call worked out very well for us and our subscribers. But then the data changed. And so we changed (thankfully well before 10-year Treasury yields hit today’s 2.60%).


“We do not wake up every day making the same mistakes over and over and over again,” says Hedgeye CEO Keith McCullough. “If you want to do that, you can go be a Cleveland Browns fan.” McCullough continues.


“It’s been a great year from a personal return perspective, even though I had a very bad air pocket after the Election, but a great year. An even greater year for the firm. I’d put what we do here up against anyone in financial services this year.”


Some quick history.


In July of 2008, we said move 85% of your portfolio to cash. We said buy equities in March 2009. And again in January 2013. This is our process. We measure and map the economic cycle. When the data changes, we change.


That’s why when U.S. economic data, from Retail Sales to Industrial Production, turned the corner following Donald Trump’s presidential victory, we made the pivot and advised subscribers to sell bonds and buy U.S. equities (see our virtual asset allocation below).


It was a 180 degree change for us, from U.S. #GrowthSlowing to #GrowthAccelerating. But it was justified by the economic data. It also happened to be a good call. Here’s financial market performance since Election Day:


  • S&P 500: +5.7%
  • Russell 2000: +13.7%
  • 10-year Treasury yield: went from 1.857% to 2.60% today


The fact is, McCullough says, “We will not grow unless we are truthful and objective about the process that we have built. We also are communicating and hopefully commercializing this for all of you so that you can use it to augment what it is that you do.”


Don’t take our word for it. We invite you to take a closer look.


McCullough: ‘If You Want To Repeat the Same Mistakes, Go Be A Cleveland Browns Fan’ - asset alloc 12 15


Athenahealth: Why It’s Up 20% Today (And Why 40% Upside May Remain)

Athenahealth: Why It’s Up 20% Today (And Why 40% Upside May Remain) - Healthcare ATHN AF No TEXT

Athenahealth is up +20% today. After the close last night, Athenahealth announced strong 2017 guidance and added an actual number for bookings guidance that should bolster its standing among sell-side analysts. Here's why our analyst still thinks there's upside.

the macro show

what smart investors watch to win

Hosted by Hedgeye CEO Keith McCullough at 9:00am ET, this special online broadcast offers smart investors and traders of all stripes the sharpest insights and clearest market analysis available on Wall Street.