The Sector Scorecard: Hedgeye Nails Long Tech versus Short Energy

06/30/17 07:49AM EDT

The Sector Scorecard: Hedgeye Nails Long Tech versus Short Energy - money growth

We said buy the stock market's dip yesterday, U.S. growth is accelerating.

Here are some facts: US GDP Growth peaked at +3.3% year-over-year growth in Q1 of 2015, slowed for 5 straight quarters, to +1.3% year-over-year in Q2 of 2016 then accelerated, to +2.1% year-over-year growth in the first quarter. (Below is a video laying out our call for growth to continue to accelerate to 3%.)

https://youtu.be/47LqWxOSM4A

Unsurprisingly, financial markets have rallied on the acceleration in U.S. growth, as Hedgeye CEO Keith McCullough writes in this morning's Early Look:

So, as GDP was slowing, -200 basis points, for 5 straight quarters… you crushed it being long #GrowthSlowing macro and sector exposures. And, you’ve been crushing it being long #GrowthAccelerating exposures during the most recent +100 basis point acceleration in GDP from last year’s all-time lows in US bond yields (i.e. when GDP bottomed in Q2)... On every single pullback in the Nasdaq since November, I have been signaling buy-more.  

Since November, we've signalled buy Technology (XLK) and sell Energy (XLE) on U.S. growth accelerating and inflation slowing down. (Note: Tech shares are up +13% year-to-date and Energy is down -14%.)

The Sector Scorecard: Hedgeye Nails Long Tech versus Short Energy - 06.30.17 EL Chart

© 2021 Hedgeye Risk Management, LLC. The information contained herein is the property of Hedgeye, which reserves all rights thereto. Redistribution of any part of this information is prohibited without the express written consent of Hedgeye. Hedgeye is not responsible for any errors in or omissions to this information, or for any consequences that may result from the use of this information.