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