“If you are planning more than 20 minutes ahead in this environment, you are wasting your time.”
-Jeff Bezos
I’m surprised Bezos and Trump aren’t buds.
That quote came from Amazon’s founder and chief disruptor “during the crunches of 1998 and 1999… he was a man in a hurry. No wonder why he created such an almighty mess.” (Messy, pg 127)
Messy is what some Generals, CEOs, and Presidents are (believe me!). When your enemy and/or competition is deliberate, dogmatic, and slow… sometimes all it takes is the disruption, rather than the details.
“The German word that Rommel used to describe the leadership qualities of the British Army was “schwerfallig.” That means ponderous, or “a reluctance to change positions as swiftly and readily as situations demanded.” (Messy pg, 135)
Sounds liked Congress, MSM (Mainstream Media), and The Old Wall to me.
Back to the Global Macro Grind…
Beating up on MOWM (Mainstream Old Wall Media) on Twitter is kind of mean (and too easy), so I do less and less of that these days. As Hedgeye’s disruptive business model moves towards its 10th year, I’m getting kind of busy running the company!
The next 20 minutes are critical for me (that’s all the time I have left to finish this note).
But, as anyone who runs money and/or a company knows, the next 20 minutes are all about learning from the last 20 minutes, 20 days, 20 months, etc. There is nothing tidy about this. We live and die by virtue of our ability to adapt.
How many of you adapted (changed) your positioning before 2017 started? Did you stay with the changes you made to your portfolio? Are you still making changes this morning?
Yesterday was what timestampers call “month-end.” In US stock market terms, here was the score for January:
- SP500 +1.9%
- Nasdaq +5.2%
- Materials (XLB) +4.6%
- Consumer Discretionary (XLY) +4.2%
- Energy (XLE) -3.2%
Most of those “sector style” scores reflect the obvious reality that US #GrowthAccelerating was a dominant factor in the NOV-DEC data (that was released in JAN). Energy’s underperformance (losses actually) reflected the reality that Oil and Natural Gas were down for the month. I’m not betting that continues in February.
Now that the Nasdaq has ramped the FANG bears a new one, I’m interested in selling some of the frothier/overbought Tech and Consumer names and rolling that growthier tilt into more of an inflation accelerating one. That is not to say I am bearish on QQQ or SPY (remember, I wrote “Sell Some” at the high last week). That’s just to say what I just said.
Sell-some. Buy-some back. That’s a lot different than saying “short it… and short more – it’s overvalued, dammit.” Newsflash: unless you’ve been shorting Gold, Long-term Bonds, Utilities (all the #GrowthSlowing exposures) since Trump’s win, life as a high-beta US equity growth bear has been brutal since November the 8th.
What about the Dollar?
- It did not have a good JAN, correcting -2.5%
- Prior to that correction, it had a +6% run to higher 3 year-highs
- Now it’s all about Trump’s Tweets (fear) vs. The Data
The growth and inflation data, that is.
So, having been a long-term #StrongDollar bull since 2013 (see our long-term Demographic work that is summarized in the Chart of the Day), I kind of like this Tweeter in Chief vs. Rate of Change Data game.
Yep, you can play the game too. In the next 20 minutes, anything can happen really… as long as Trump is awake.
Contrary to his current lack of #StrongDollar, Strong America rhetoric, Trump can’t control time and space. As you can see in the chart, the US will increasingly become the best house in an aging neighborhood, from a demographic perspective.
President Trump, this chart (growth rate of the 35-54 year-old US population) is enormously huge and massive:
- After bottoming, in rate of change terms, during your boy Obama’s reign, it just went POSITIVE on an absolute basis
- Big time, absolutely, a hugely huge hockey stick breakout, really. Believe me.
- By the time you’re 1st term is up, America’s top spending cohort, really is going to be great again!
What’s super astronomically great about this long-term USA vs. Europe/Japan call (in both absolute and relative long-term growth prospect terms), is that you can explain mostly why both Bush and Obama failed with their “demand” based QE policy.
While both of those Presidents empowered Bernanke and Yellen to devalue the dollar and cut the rate of return on American savings to 0% in order to create the illusion of growth (asset inflation, in US Dollars), both failed to create real 3-4% GDP growth.
If Trump truly, tremendously, and toweringly wants to make America great again (in real GDP terms), he needs to get Millenials long US Dollars and have them #Like it, every 20 minutes, all-day, every day… from now until 2020.
Our immediate-term Global Macro Risk Ranges (with TREND views in brackets) are now:
UST 10yr Yield 2.40-2.56% (bullish)
SPX 2 (bullish)
NASDAQ 5 (bullish)
VIX 10.00-12.85 (bearish)
USD 99.25-101.55 (bullish)
EUR/USD 1.05-1.08 (bearish)
YEN 112.50-116.10 (bearish)
Oil (WTI) 52.00-53.92 (bullish)
Nat Gas 3.15-3.51 (bullish)
Gold 1180-1222 (bearish)
Copper 2.56-2.74 (bullish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
