Editor's Note: Below is an excerpt from today's Early Look written by Hedgeye CEO Keith McCullough. Click here to learn more about the Early Look.
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With the end of March comes the end of the 1st quarter of 2018. It was a quarter marked by massive reversals in the aforementioned two things in particular. Facebook (FB) and the UST 10yr Yield peaked in FEB and got smoked in March. Smoked? Really? Is the 10yr Yield dropping -20 basis points a good ole fashioned smoking? On an absolute basis, obviously not. But think about what that move in bond yields did to US Equity Sector Styles that were getting smoked in JAN-FEB like Utilities: A) For the month of March Utilities (XLU) are up +2.5% absolute and +6.5% relative to the SP500 While Reflation’s Rollover wasn’t much in basis points of headline “inflation” either, being long of “reflation” from the peak of inflation expectations with the UST 10yr yield at 2.96% in FEB was a terrible portfolio position to take. Our job as your Global Macro Risk Manager is to try to help you avoid getting smoked. |
