The U.S. economy and inflation are both accelerating. That’s critical knowledge for understanding how to position your portfolio. It dictates which sectors will outperform. Incidentally, this framework explains why our analysts are bullish on the U.S. Dollar, cyclical stocks and bearish on bonds.
In the video above, Hedgeye CEO Keith McCullough and Macro analysts Darius Dale and Ben Ryan break down our proprietary trading ranges, how we interpret stock market volatility and our Growth, Inflation, Policy model (GIP).
The basic framework is pretty simple. As Hedgeye Senior Macro analyst Darius Dale says:
“A lot of our competitors view the world in absolute terms, but at Hedgeye there’s no such thing as a good or bad economic statistic. It's either getting better or worse. It could be really bad and getting less bad. That’s good. It could be really great, but going to good. That’s bad. And that’s the only way we think about the world.
So when you’re looking for companies on the long side, you want to see revenue growth accelerating and margin growth expanding. We take that same framework and use it to apply to different countries. From a country perspective, you want to see GDP growth accelerating and inflation decelerating.”
