We’ve spared no digital ink in detailing the dynamics surrounding domestic growth accelerating over the past year and a half.
Organic (& globally harmonized) acceleration combined with trough industrial/profit recession comps conspired to drive perhaps the finest protracted stretch of growth and risk adjusted returns of the cycle.
But macro, of course, remains an exercise in successfully front-running Better/Worse and, from a slope-of-the-growth-line perspective, organic improvement and base effects aren’t mutually exclusive.
To be clear, our near-term outlook remains growth and asset price positive, but marked accelerations and all-time highs eventually become the comp and as good as those cycle highs look against recessionary compares can be as challenging as they become after those trough comps are fully annualized.
The objective of this note is simple:
Below we’re simply cataloguing the recent and forward comp dynamics across a selection of high frequency domestic fundamentals.
Green Line in the Chart = TTM/2017 Comps
Red Line in the Chart = the NTM/2018 comp setup.
There’s nothing conceptually groundbreaking in visually cataloguing reported reality, but degree of difficulty doesn’t (necessarily) count and simply identifying gravity doesn’t indemnify one from its effects if you’re not also proactively prepared for it.
After all, the post-crisis market reality remains one where everything is obvious and nothing is what it seems ....
Christian B. Drake
@HedgeyeUSA
