Global #GrowthSlowing, Data Secured

“Three principle ways to lose your money: wine, women, and engineers.”
-Baron Rothschild 

Ole Baron is dead now. So is talking about wine and women that way. I personally love the vino – it drives money making ideas! And oh do I love my wife and three beautiful daughters. God Bless America!

But maybe Rothschild is still right on the engineers part. Musk? Many of your great grandmothers and grandfathers crushed it shorting storytelling railway execs in the 19^th and 20^th centuries, so I’m sure glad we stayed the course with Tesla in the 21^st.

I’m also super hugely glad I don’t wake up in the morning navel gazing at the latest Trump, Trade, Tarriff  headlines before I make my next risk management decision. The principle way to lose your money in modern day macro is to be a Macro Tourist.

Back to the Global Macro Grind… 

Got Global #GrowthSlowing this morning or are you reading about Mexico and my homeland (Canada)?

1. CHINA – the NDRC’s own chief economist is saying the economy faces rising risks in the 2^nd half of 2018
2. TURKEY – the central bank just doubled banks’ borrowing limits for overnight lending
3. ITALY – the government is allegedly reaching out to the ECB for a new round of QE!

Fair e nuff. The alleged Italian “news” may or may not be fake. A simple truth we can tell you about Italy is that her economy is #slowing on a trending basis from its 2017 cycle peak. Italian stocks are down -6.5% in the last month too. 

Aha. But what you don’t know, KM, is that ‘Trump is going to do a bigly trade truce deal’ (which he allegedly already did) with the Europeans … and have the US buy Italian debt.’ 

#Cool

All I have to say about that… is that even if it becomes hoped-for-news, I’m going to make and save money keeping my clients out of these damn Italian, French, and Greek stocks relative to my USA REITS (VNQ) equity exposure in the meantime.

Got European #GrowthSlowing data to support that positioning and staying with Short Euros?

1. GERMANY – unlike USA’s yesterday, German Consumer Confidence ticked down (again) in SEP to 10.5
2. FRANCE – Consumer Spending #slowed to +0.2% year-over-year in JUL from +0.3% in JUN
3. SWITZERLAND – Credit Suisse Survey Expectations just collapsed to -14.3 in AUG from -4.0 in JUL

Ok. Fair e nuff again. I realize Ed might have a “survey” that trumps the Swiss one that assures you that client dinners in Paris and Frankfurt were friggin fantastic back in Q4 of last year.  

Oh, and “European Stocks are cheap”… got that too.

But can you imagine if US Consumer Spending slowed to even +2.0%, never mind +0.2%, like the French have seen? Omg, what’s left of the precious yield curve would be so inverted that even the former JPM dude with the $100,000 Bitcoin price target would see it.

In other Mr. Market (real-time prices) news this morning: 

1. Chinese stocks dropped for the 2^nd day in a row confirming Bearish TREND @Hedgeye
2. Singapore’s stock market dropped as well, failing at both TRADE and TREND levels of @Hedgeye resistance
3. The FTSE (London’s barometer on Global Growth Expectations) dropped another -0.4% and remains RED for 2018 YTD
4. Greek stocks fell another -0.6% and are down -2.5% in the last month alone
5. Spanish stocks fell another -0.7% and are down -3.4% in the last month too
6. Copper failed @Hedgeye TRADE and TREND resistance, resuming its crash down a full -1% this morning
7. Corn prices remain Bearish TREND @Hedgeye as the Ag complex breaks down in kind
8. CRB Commodities Index made yet another lower-high at 191 yesterday and remains Bearish TREND @Hedgeye
9. UST 10yr Yield ticks back down to 2.87% this morning after making another lower-high within a Bearish @Hedgeye TREND
10. REITS (XLRE) led yesterday’s US stock market Sector Style gainers at +1.2% on the day and +8.6% in the last month

Good luck reading about any of that in Old Wall media today. I think they’re still on Mexican auto production and Manafort.

Our immediate-term Global Macro Risk Ranges (with intermediate-term TREND views in brackets) are now: 

UST 10yr Yield 2.78-2.90% (bearish)
SPX 2 (bullish)
NASDAQ 7 (bullish)
Utilities (XLU) 53.00-54.77 (bullish)
REITS (VNQ) 82.51-84.66 (bullish)
DAX 12105-12594 (bearish)
VIX 11.51-14.49 (neutral)
USD 94.25-96.90 (bullish)
EUR/USD 1.13-1.17 (bearish)
Copper 2.58-2.76 (bearish)
Corn 3.51-3.71 (bearish) 

Best of luck out there today,

KM 

Keith R. McCullough
Chief Executive Officer