McCullough: We're Starting To Get Cautious

by: Hedgeye

Summary

After eight consecutive quarters of U.S. growth accelerating, Mr. Market is beginning to front run a new setup with inflation beginning to slow.

The data continues to suggest a significant move towards Quad 4 – growth and inflation slowing – later this year.

“The market is having a lot of schizophrenic action between [Quad 2 and 4],” Hedgeye CEO Keith McCullough explains. “Now we’re starting to get cautious in the U.S.”.

After eight consecutive quarters of growth accelerating, Mr. Market is beginning to front run a new setup with inflation beginning to slow. Where will the market end up?

Hedgeye CEO Keith McCullough walked subscribers through various scenarios on a recent edition of The Macro Show using Hedgeye’s proprietary Growth, Inflation & Policy (GIP) Model.

After seeing growth and inflation accelerate for the last five quarters (that’s Quad 2 in our model), the data continues to suggest a significant move towards Quad 4 – growth and inflation slowing – later this year.

“The market is having a lot of schizophrenic action between [Quad 2 and 4],” McCullough explains. “Now we’re starting to get cautious in the U.S.”

There will be plenty of more subtle moves on the way to Quad 4, so stay with Hedgeye to keep you focused on the big picture.

Watch the full clip above for the entire explanation.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.