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Below is a brief excerpt transcribed from Thursday's edition of The Macro Show hosted by Hedgeye CEO Keith McCullough.

McCullough: "This Is Late Cycle Consumer Slowing" - 1 16 2020 10 32 29 AM

Lets talk about earnings.

The inflection point is down. Not only do we have consumer slowing, we also have earnings slowing. At this point we have 24 companies in the S&P 500 have reported an aggregate earnings decline of almost 5%

McCullough: "This Is Late Cycle Consumer Slowing" - 1 16 2020 10 20 41 AM

“But Keith! It's still early!”

Actually, the energy companies haven’t reported their negative earnings yet, so it could very well get worse.

Don’t forget that we think that earnings are going to be down. Wall Street thinks that earnings are going to be up. Wall Street's expectations for the quarter are up 3 to 4%.

Well down -4.8% is obviously not up.

That’s important when companies like Target (which everybody owns) implode. I'm telling you that instead of same store sales being up 3% to 4%, Target sales were up 1% and they don’t think that their earnings are going to be up anywhere near what Wall Street thought was going to happen.

That’s what happens to a stock like that.

What could possibly go wrong? Until it goes wrong.

Lately, you’ve had a lot of trumping, you had a lot of tweeting, and you had a lot of expectation on no World War III. But we do have to go through the GDP report and the companies reporting their earnings within the same environment.

I think this is late cycle consumer slowing, because the data does.