***Webcast today at 11am ET***
2018 marks the 10th consecutive year in which we have been publishing our quarterly investment themes, which are three top-down catalysts our models suggest are increasingly likely to drive investment returns that our proprietary sentiment indicators suggest investors are not yet broadly positioned for. We’ve had an excellent run prospectively identifying the various investable pivots in growth, inflation and policy – both domestically and internationally – and look to summon those same repeatable processes to continue the streak in 2H18.
CLICK HERE to access the webcast and associated slides, which will become available shortly prior to the start of the presentation (refresh this link for access).
3Q18 Macro Themes:
- #StrongDollar: A U.S. Dollar Index +7% off its YTD lows has already inflicted some major pain in consensus macro views that were observably long of things like commodities and emerging market financial assets heading into Q2. Moreover, our proprietary GIP-modeling process for all of the world’s major economies signals that the global trend of decelerating growth is just getting started – an outcome that is likely to increasingly drive inflows into dollar-denominated assets. We will dig into the wide-reaching implications of further USD strength that investors can’t afford to miss, from emerging market USD-denominated credit risk to corporate profit deterioration.
- #HaveRatesPeaked?: With a peak in domestic headline inflation pending in Q3, 4 hikes out of the FOMC now priced in for 2018, DM sovereign yields retreating alongside the more discrete manifestation of #GlobalDivergences (i.e. broad slowing across Europe, China and EM) and both 10Y Yields and Ag all signaling lower-highs, the consensus “bond bear market” thesis is likely to find itself under increasing scrutiny as we progress throughout 2H18. We’ll review prevailing conditions, detail emerging dynamics and discuss how we’ll be risk managing rates and rate-sensitive equity exposure in the upcoming months.
- #ShortEM: The first half of 2018 saw a tremendous pickup in cross-asset volatility – albeit from at/near all-time lows – throughout the emerging market investment universe. With explanations of what caused this market event as numerous as the number of strategists who didn’t see it coming and as bountiful as those that are calling for it to end purely as a function of “attractive valuations”, we don’t believe our bearish bias on EM is fully priced in. As such, we will anchor on the findings of our proprietary, repeatable and robust processes to detail to investors why EM assets are likely to continue to be a drag on fund performance with respect to the intermediate term.
Dial-In Participation Instructions:
- Toll Free:
- UK: 0
- Confirmation Number: 13677995
As always, our prepared remarks will be followed by a live, anonymous Q&A session. Please submit your questions to . Also, for those of you who cannot join us live, we will be distributing a replay video of the presentation shortly after it concludes.
-The Hedgeye Macro Team