“Boring, it’s what we do.”
- Elon Musk
Boring, not as in not interesting or tedious, as in The Boring Company. “I’m actually going to do this” @ElonMusk, December 17th, 2016. Didn’t happen then, but it was obviously #cool.
Obviously having a vaccine for this nightmare would be very cool too. The execs at Moderna (MNRA) who sold into last night’s 17.6M share deal at $76/share are feeling ultra-cool this morning.
Since we don’t have a “V-shaped recovery” happening anytime soon (see my Real Conversation with David Rosenberg @HedgeyeTV yesterday), the FOMO crowd is more inclined to believe in something bigger than that – and they need it now!
Back to the Global Macro Grind…
If you want to get all bulled up about profitless companies, the aforementioned Musk quotes are part of a chapter called “Convergence” that I cited last week from a great futurist book that I’m just finishing called The Future Is Faster Than You Think.
“In the minutes before a Hyperloop pod arrives at a Boring Company-Drilled Station, the AI behind Uber’s aerial ride-sharing service and the AI behind Waymo’s driverless ridesharing fleet will dispatch a swarm of vehicles to that station in order to take passengers onto the next leg of their trip…” (pg 19)
Beyond #cool, that is. And I mean that sincerely. But what’s the timing on that? Who’s going to fund it?
If all of those things happen by the time of the US Eelection, Pump won’t have to bailout Airline companies anymore. We’re going to be zipping around in single passenger pods underground!
That, too, would make the expectation for a V-shaped anything completely wrong. It’s going to be a P-shaped Ramp. P for Parabola, baby! Hopefully our Quads pick up on those P’s just prior to takeoff.
Enough about all of that. Fortunately, I still have to do my job this morning and bean-count the economic cycle data alongside measuring and mapping my fractal-based market signals.
Hedgeye’s view of the future of an Independent Research/Content platform is happening faster than the Old Wall thought too.
Yesterday’s V-Shaped Vaccine hopes delivered what we call a #Quad2 Day where:
A) US Dollar is down
B) US Treasury Yields are up
C) Gold is down
D) Oil and Energy Stocks are up
E) Financials and Bank Stocks lead the rally
F) Junk Bonds fly like an aerial ride-share
All of that, of course, is called a Counter @Hedgeye TREND move or just a very noisy immediate-term TRADE.
If you just want to talk about the “stahks” part of the that move at the Factor Exposure level:
- HIGH BETA stocks were +9.1% on the day, taking their 3-month crash to -35.8%
- HIGH DEBT stocks were +7.2% on the day, taking their 3-month cash to -30.8%
- HIGH SHORT INTEREST stocks were +7.2% on the day, taking their 3-month crash to -27.1%
Yeah, forget The Boring Company. You needed to be long of United Airlines (UAL) and Avis Car Rental (CAR) which were up +20% and +24%, respectively, in a dead heat with Moderna (MRNA) by the time Old Wall was going to plug you with their EOD (end of day) secondary.
Double Bubble (profitless, but cool, companies + levered profitless companies) be damned!
You’d think the Europeans would ride-share some FOMO stahks after a move like that, eh? Nope. Why though? Aren’t they going to get the vaccine and hyperlooping pods?
European Stocks opened down and have since gone lower this morning after France’s 10yr Yield dropped to NEGATIVE -0.03%, joining Swiss and German NEGATIVE rate policy. They’re still hoping that solves for the latest European #Recession, I guess.
Meanwhile, re-boring for US Shorts? That’s what we do in bear markets. I re-shorted the Russell Train Wreck (IWM), Private Equity Bubbles (PSP), and Junk Bond Bubbles (JNK) on green yesterday. Patience is part of the future too.
Immediate-term @Hedgeye Risk Range with TREND signal in brackets:
UST 10yr Yield 0.59-0.75% (bearish)
SPX 2 (bearish)
RUT 1211-1356 (bearish)
Healthcare (XLV) 97.98-102.02 (bullish)
Financials (XLF) 20.35-22.63 (bearish)
DAX 105 (bearish)
VIX 26.31-37.26 (bullish)
USD 99.21-100.86 (bullish)
Oil (WTI) 22.76-33.09 (bearish)
Gold 1 (bullish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
