Below is a brief excerpt transcribed from today's edition of The Macro Show hosted by Hedgeye CEO Keith McCullough.
I had a LOADED inbox this morning.
A number of hedge fund managers emailed me following the bloody higher lows for REITs, Utilities, and Treasuries.
“That curve is steepening bro! I got to get out of the way! This is it, Quad 2!"
Well... that’s just wrong this morning, bros and bro-settes.
The curve just got pancaked. You’re lying flat on your back like if Darius Dale ran into me in the middle of a football field.
The 5s/2s is dead flat this morning. There is no steepness. The 10 YR Yield minus the 2 YR Yield is down to 16 basis points heading back toward flat.
And what comes after that? What if we re-invert the curve?
Who’s prepared for that?
The people who bought the low end of the range in the Quad 3 exposures which would include, you guessed it…Utilities, REITs, and Treasuries.
Stick with the process.