Below is a brief excerpt transcribed from Wednesday's edition of The Macro Show hosted by Hedgeye CEO Keith McCullough.
Lets talk about Financials.
It’s unequivocally a bear market. You won’t hear anything about that on CNBC though. Take a look at this chart.
This is a terrible looking thing. It was down -2.4% yesterday. Down over -30% since February.
But you hear, “Bro, it’s not a bear market. We bounced X% off the lows, blah, blah blah.” And the stuff you used to hear was "J.P Morgan is cheap and I really like Bank of America…”
If you didn’t know cheap could get cheaper, now you know.
Park that FOMO, and go talk about what everybody actually does, which is a bunch of tech stocks and FANG stocks fully loaded. Financials look a lot like the inverse of that. If you look at the earnings update, don’t forget that Financials earnings were down -35% year-over-year pre-virus. Tech earnings were up +6.3% year-over-year.
Bottom line, Financials have been a fantastic thing to sell on FOMO days. That’s a fact. Facts are important.
Fiction however, is that it’s the next bull market. It's going to be hard to have the next bull market without the Financials.
