There's Always A Bear Market Somewhere... - bears

Below is an excerpt from today's Early Look written by Hedgeye CEO Keith McCullough:

"If you want to be bearish on something that’s actually been making you money for the last 3 months, stay with Reflation’s Rollover:

 

  1. CRB Commodities Index (19 commodities) is down -3.8% in the last 3 months
  2. Energy Stocks (XLE) are down -6.0% in the last 3 months
  3. WTI Crude Oil is still down -7.8% in the last 3 months
  4. Silver is down -5.2% in the last 3 months
  5. Copper is down -7.0% in the last 3 months
  6. Soybeans are down -7.7% in the last 3 months

 

I’m not cherry picking. If I was I’d have started with Coffee prices being down -17.3% in the last 3 months and Starbuck’s (SBUX) investors who are long the other side of inflation expectations falling (i.e. real consumption growth accelerating) being +7% in the last 3 months."

As you can see in the Chart of the Day below, reflation popped in the first quarter of 2017 as the year-over-year percent change in commodities spiked. Basically, oil, copper and aluminum rallied off last year's lows, when these commodities were down -52%, -24% and -19% respectively. These commodities popped and now they are off first quarter highs.

Reflation continues to rollover...

There's Always A Bear Market Somewhere... - 05.24.17 EL Chart