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 4Q17 and the associated investment implications.
- CLICK HERE for the video replay, presentation materials, and audio-only replay
Q4 2017 MACRO THEMES OVERVIEW:
- USA Quad 1 or 2? Quad 1 allocations have had an epic run alongside Reflation’s Rollover, four consecutive quarters of accelerating growth and synchronized global momentum. Now, with reflation again percolating, trough growth and profit comps now rearview, the Fed moving incrementally hawkish and a more divergent global growth outlook emerging, can the conspicuous YTD outperformance in #RealGrowthAccelerating exposures persist? We’ll detail our near-term outlook for domestic growth and inflation and the strategy for traversing the chop associated with the reflationary bounce, weather related distortions and prospective policy and geopolitical catalysts.
- Profits vs. Tax Reform: After 5 consecutive quarters of negative Y/Y earnings growth in the aftermath of the commodity bubble from Q2 2015 – Q2 2016, the easiest comps are officially in the rearview after four consecutive quarters of earnings growth for S&P 500 constituents. Without the corporate profit tailwind, what has been 11 months of speculation as to whether or not the Trump administration can get tax reform done now matters in a big way for prolonging this bull market run. We’ll walk through the key scenarios.
- Synchronized Global #Divergences: The much ballyhooed “synchronized global recovery” which began in earnest in Q1 of 2016 appears to be petering out with noteworthy divergences emerging across key economies. We refresh our GIP Models for each and provide clues as to which countries and regions are likely to provide the highest risk-adjusted returns from here.
Kind regards,
-The Hedgeye Macro Team
