Dear Investor,
Did you listen?
On the morning of October 4th, the 10-Year Treasury yield was at 3.18%. That same morning, at 7:46am ET, Hedgeye CEO Keith McCullough sent “Early Look” subscribers the following (prescient) insight:
“We’re forecasting Quad 4 in Q4.
The US labor market remains classic #LateCycle, but if you’re looking for pending headline-tourist-news that gets consensus to believe their record net SHORT position in the 10yr Treasury, this should be a big part of that short-term narrative.
That’s the short-term. If you’re an intermediate-to-long-term investor who is trying to pivot from Quad 2 (long either US or Global Growth) into long duration (low beta Fixed Income), this is a better time and price to do so than any other time in the last 3 years.”
A lot of people thought Keith and our macro team were crazy.
In fact, just the week before (and shortly after) McCullough issued his contrarian call on bonds, DoubleLine Capital CEO Jeff Gundlach, the “Bond King” himself, was all over the news warning people that US Treasury yields were heading higher—much higher—to around 3.6%.
Fast forward to today. The 10-year has fallen below 3.00%. It is sitting around 2.87% as of this writing. Quad4 is unfolding our eyes.
And to be clear, our call remains the same for now.
Below is some smart Weekend Reading to keep you proactively prepared for the next big market move.
- [MACRO INSIGHT] Early Look: Still Quad Four
- [RISK MANAGEMENT VIDEO] “The Macro Show” with Keith McCullough: 12/6/18
- [MACRO VIDEO INSIGHT] How We Model the U.S. Economy
- [RISK LEVELS] Risk Ranges: Friday December 7th
- [PROCESS] Hedgeye's "Understanding" Videos
- [NEW PODCAST] IN THE ARENA
Happy reading and have a great weekend!
