We hosted a complimentary edition of The Macro Show this morning. Click here for free access to this entire 40-minute webcast. Below is a brief excerpt.
Keith McCullough: I’ll give you a free tip. Don’t do what CNBC has told you to do for the last year. Now if you just bought stocks, no wonder you have feelings. I would feel a lot of bad feeling too. The Russell 2000 after yesterday’s close made a lower low versus the lows it saw prior in May.
Remember when people got body slammed in May? Or in Q4 of last year when the cycle peaked and all of this started? Or even this month? The Russell 2000 made a lower low. That’s really bad, mathematically, euphemistically or otherwise. And now it’s down -16.3% versus the peak in August when you could have chased the chart and technicians said it looked fantastic.
So at the end of the day you’d have to be up almost 18% to get back to break-even from that peak. And if you shorted the Russell 2000 and other style factors outside of small cap stocks like high beta stocks you’re crushing it on the short side with those core QUAD 4 exposures.
McCullough: Autodesk (ADSK) is going to get a lot of chit chat today, and I’ll be damned! Autodesk surprised the Old Wall and all its followers last night because they reported a ‘Great quarter, guys’ but then they guided down in Q3.
I wonder why?
CapEx is now negative on a year over year basis. This is an IT spending company that was a recipient of tax reform when U.S. growth was accelerating and we were bullish for two whole years.
Now Autodesk is guiding down cause CapEx is negative. I’ll be damned. The stock is down 25% from where you could’ve chased the chart back in early April.
And yet everyone still wants to talk about “Oh but you don’t have a view on a recession!” If you bought Autodesk at its peak that’s a recession in your portfolio. Don’t do that. Negative CapEx is a major risk. You want to be on the other side of the CapEx cycle. We haven’t even lapped the most difficult comparisons for the U.S. economy yet.
McCullough: Here’s the point. Try to open your mind.
I know for a lot of you a lot of this is new. I know we do it differently. But I think that’s a good thing. I don’t think anyone would accuse Wall Street of nailing it at every single economic cycle turn for the last 20 years and that’s precisely why I built this place. I was just sick and tired of watching people get obliterated by people that are completely full of shit on TV or pushing their own way to get compensated which is even worse.
We want you to engage, learn, empower yourself to do this on your own.
