Below is a chart and brief excerpt from today's Early Look written by Hedgeye CEO Keith McCullough.
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On the greenest of Irish Greenlights today, the most important OODA Loop observation in my notebook is this: BIG HIGHER-LOWS and new HIGHER-Cycle-HIGHS for Oil, UST 10yr Yield, and the Russell 2000 (IWM). Why? A: #Quad2. Mr. Market is exceptionally good at discounting the future. Yesterday’s “disappointing economic data” sets the table for way “better than expected” data in March (reported in April). Why? A: Base Effects. US Retail Sales was just reported at +6.3% year-over-year growth for FEB vs. a +4.7% comp in FEB of 2020. The comps (base effects) for March and April of 2020 collapse to -5.6% and -19.9%, year-over-year, respectively. Whether it’s the “why” and/or The Signal that you choose to care about, that’s completely up to you. Or, as the Irish like to say, “never scald your lips with another man’s porridge.” |
