Earlier today the Hedgeye Macro Team, led by CEO Keith McCullough, hosted its quarterly Macro Themes conference call in which it detailed the THREE MOST IMPORTANT MACRO TRENDS it has identified for 3Q17 and the associated investment implications.
- For the video replay CLICK HERE
- To access the presentation materials CLICK HERE
Q3 2017 MACRO THEMES OVERVIEW:
- Real Growth #Accelerating: We remain well above consensus on U.S. economic growth with respect to the intermediate term and are keen to detail the positive impact of disinflation, rising asset prices and elevated confidence readings are likely to have upon the real economy here in the U.S. in the face of receding base effects for GDP. Pro-#Quad1 sectors and style factors should continue to lead the way higher within the domestic equity market.
- #EuropeSlowing?: Contrary to our positive outlook in the U.S., our model is prospectively signaling a concomitant deceleration in both economic growth and inflation across the Eurozone economy. This view is very counter to consensus that remains extremely complacent on the long side of the euro and European equities. We think the appropriate play for 2H17 is to be short of the former and rotating into defensive exposures within the latter (i.e. long “R.U.S.T.”/short banks and long Germany/short Spain and Italy).
- #ChinaSlowing: We continue to think the nascent inflection in the “Old China” economy is likely to develop into a negative trend throughout 2H17 amid tighter policy, insurmountable base effects and a myriad of structural headwinds that have yet to be meaningfully addressed. This outcome has dire implications for commodity-oriented reflation broadly.
Kind regards,
-The Hedgeye Macro Team