We are pleased to share with you our Quarterly Investment Outlook for 2Q 2021.

In the video below, Hedgeye CEO Keith McCullough and Financials analyst Josh Steiner lay out our three essential Macro Themes we believe will drive market returns in the coming months. Below the video is a brief summary of each theme with supporting charts.

(Click here to view slides included in the presentation.)

Each theme forms the foundation of our current investment conclusions and will augment your own investing process.

Best Regards,
Team Hedgeye

https://youtu.be/lOmgQ-cm49Y

1. USA Still #Quad2

The U.S. is poised to enter its fourth consecutive #Quad2 quarter in Q2 with some of the easiest economic comparisons we’ve seen in our lifetimes. These base effect dynamics are aided by ongoing Fed-Fiscal support and promise a continuation of the historic reflationary environment that has already been on discrete display across cyclical, rate and inflation sensitive assets. We'll detail how much juice remains in Quad 2 exposures and how we'll risk mange the prospective inflection towards Quad 4. In addition, we’ll look at vaccine roll-out in the U.S., which is easing the concern of increased Covid-19 restrictions on mobility.

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2. Macro signals and divergences

There have been a lot of price noise in the markets in recent weeks, especially with rates breaking out and various #Quad2 exposures taking a breather.  We will review what our Trade / Trend / Tail model is saying in aggregate from quantitative perspective as it relates to where we are in the cycle.  Spoiler alert: not a lot of changes despite recent “noise”.

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3. Rates & housing... Peak Cycle?

As they typically do, rates have been rising as the #Quad2 economic rate of change data accelerates. The question of course is: what will this ultimately mean for the cycle? In particular housing, which has been en fuego.  Our colleague Josh Steiner will be on the call to discuss his 50 basis points rule of thumb on rates as it relates to housing, as well as his longer term views.

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As always, if you have any additional questions please email support@hedgeye.com.