Editor's Note: Below is a brief excerpt transcribed from today's edition of The Macro Show hosted by CEO Keith McCullough. This is transcribed from the Q&A portion of the show in which McCullough responds to a subscriber question about buying bond yields. Click here to learn more about The Macro Show.
Subscriber: There’s been a lot of ink spilled about the massive short squeeze that has propelled the market higher in the context of a bullish trend. Does it matter who is doing the buying? Does short covering mean that the bid will dry up?
McCullough: People have whinned or spilled ink about being a loser in this market for years now. We’ve been bullish on U.S. stocks, particularly growth stocks, going back to Q3 of 2016. Of course, we were super bullish in 2009 and 2013.
There were fundamental reasons why the U.S. stock market has been bullish, including 8 consecutive quarters of year-over-year growth.
It’s a fact: 8 consecutive quarters of year-over-year growth has never happened in the history of the U.S. economy.
Why did stocks get squeezed? Because U.S. growth is accelerating. If you’ve been shorting growth stocks with high short interest you deserve to get squeezed.
Now, you’ve got a lot of these Old Wall types that are whining all the time. That means they missed it so they blame a bunch of different things, like a short squeeze, when the number 1 most causal factor in macro is growth, closely followed by inflation.
We’ve had growth and inflation accelerating at the same time.That’s why stocks are at all-time highs.
The short squeeze is just complimenting the rise in growth and inflation. If you’ve been losing money for eight quarters in a row, no wonder why you’re whining.
(The chart below does not reflect the year-over-year GDP growth acceleration in 1Q18. It's official. The U.S. economy has accelerated for 8 straight quarters, the longest streak ever.)