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Below is a chart and brief excerpt from today's Early Look written by Macro Analyst Christian Drake. 

Let’s indulge in the following macro procession:

Current conditions cultivate a backslide in activity into year-end but also setup an even easier base effect dynamic, both sequentially and Y/Y in 2021 → A bipartisan stimulus “down payment” helps assuage the more acute concerns around the impending income cliff and a negative macro spiral → realized vol continues to drift lower, supporting flows and further re-leveraging from vol sensitive strats in a virtuous, self-referential loop → The Fed announces WAM extension, constraining the threat of a more meaningful backup in nominal long-rates, maintaining pressure on real rates and helping to sustain record easiness in financial conditions → the Biden/Yellen inauguration is chased by the vaccine inauguration → paving the way for a further step function increase in employment, a prospective easing in supply chain bottlenecks and a reversion lower in pandemic related goods inflation → easy comps and an acceleration in aggregate private sector income growth associated with employment gains drive an acceleration in collective consumption capacity → the organic acceleration in income growth is further amplified by a decrease in the savings rate and a drawdown in the cumulation of excess savings resulting in a domestic household spending juggernaut.  

Wow, that is some sirenic sh*t right there!  

You could almost imagine the bullish seduction serving to drive some crazy market dynamics …. Like all-time high valuations, all-time high call option activity, or a macabre surreality like simultaneous ATH’s in equities and Covid related deaths.

CHART OF THE DAY: A 2021 Consumption Story - CoD Savings