Editor's Note: Below is a brief excerpt from today's Early Look written by Director of Research Daryl Jones. Click here to learn more about the Early Look.
As many of you know, the Hedgeye #Process adheres to combining macro with individual level security analysis. In our macro models, three things percolate to the surface every morning. Keith is on the road this morning, but below are the top three things in his macro notebook:
1. EUROPE
The economic data continues to slow from its multi-year cycle peak with Dutch Consumer Spending slowing to +1.2% y/y (that would be very bad if we had that in the USA!) and FEB PMI readings in the red (slowing vs. JAN) across the board as Reflation Rolled Over in FEB – European Stocks and 10yr Yields Down again, diverging vs. US Treasuries again
2. OIL
Confirming my signal of lower highs vs. Reflation’s recent JAN peak with WTI down -0.8% this morning and am immediate-term @Hedgeye Risk Range of $58.43-62.95 so I don’t have that $65-67 level in play, for now
3. US Treasury 2-YeaR YIELD
The 2-year Treasury yield spikes to 2.26% this morning which is divergent from the Oil and European Bond Yield moves – part of this is headline news that consensus economists are taking their rate hike forecast to 4 in 2018 (market expects 3 – and I expect those expectations to fall if headline reflation data rolls over in FEB-MAR)
