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To help contextualize this morning's market moves around the world, below are insights and analysis from our research and Hedgeye CEO Keith McCullough's Twitter feed.
WHY ARE U.S. STOCKS AT ALL-TIME HIGHS?
Part of the answer has to be five consecutive quarters of earnings growth. It looks like we'll have another quarter of growth in the third quarter. So far, 48 of S&P 500 companies have reported year-over-year earnings and sales growth of 12.5% and 6.6% respectively.
https://twitter.com/KeithMcCullough/status/920584443911397377
A Simple Visual of U.S. Growth Accelerating
The US Treasury 2-year yield rips to a five year high of +1.56%. This is what you'd expect to see in an environment in which both US growth and inflation accelerate sequentially.
https://twitter.com/KeithMcCullough/status/920583202745606145
Loving Strong Dollar
The U.S. dollar index has been up for five of the last six weeks. With the Euro down, European equities (generally) like that (not Spain and Italy, though, which are facing serious economic headwinds). The U.S. dollar index is up +2.5% from the September lows. Since then, the German DAX is up +6%.
https://twitter.com/KeithMcCullough/status/920578573433532416
https://twitter.com/KeithMcCullough/status/920579110996463616
Road Kill
Japanese equities also love a stronger dollar. Here you go: Yen ↓ = Nikkei ↑. From the U.S. dollar index's September low, the Nikkei is up +10.8%.
https://twitter.com/KeithMcCullough/status/920576446745194496
A 'New Era' for China?
Chinese president Xi Jinping proclaimed a "new era" of Chinese politics and power to kick off the 19th national congress of the Communist party of China. Xi also said he would significantly ease market access, further open service sectors, and protect the rights of foreign investors. There would also be zero tolerance for corruption. We reiterate our call that China's economy is slowing. Here's why.
https://twitter.com/KeithMcCullough/status/920577488434188288
A Big Breakout
Oil volatility (see below) continues to make lower lows. That's obviously bullish for the price of Oil, which is up +9.4% in the past three months.
https://twitter.com/KeithMcCullough/status/920580283090571264
You're Invited...
Join us for exclusive Q&A with iconoclastic, best-selling author Jim Rickards. He will join Hedgeye CEO Keith McCullough one-on-one to discuss their divergent market and economic outlooks.
We will open up their discussion to viewer questions.
…Rickards says the U.S. economy is slowing
…McCullough says the U.S. economy is accelerating
CLICK HERE or the tweet below to attend today’s free event.
https://twitter.com/Hedgeye/status/920622345399697408
Want to better understand the big picture macro market developments? Get a free month of our newly launched weekly newsletter Market Edges.
