“What if the “experts” have gotten everything about the future of energy wrong?”
Key Takeaways
- If you didn’t know that Oil (WTI) is up another +1.4% this morning to fresh 3-month highs, now you know.
- We have the USA’s INFLATION re-accelerating (again) in March with a MONTHLY #Quad3 (Stagflation)
- India GDP print comes in at +8.4%
The big picture
What if the price of Oil continues to breakout on my TRADE and TREND Signals? If you didn’t know that Oil (WTI) is up another +1.4% this morning to fresh 3-month highs, now you know.
If you didn’t know that I don’t know jack about climate change, well now you know that too.
One of the most thoughtful Institutional Investors I know (leads part of a big Chicago firm but he’s a Cleveland Browns fan?) gave me Esptein’s book, Fossil Future, so if you’re triggered by today’s lead-in quote, blame him.
Macro grind
No matter what your thoughts are on Fossil Fuels, I am going to be Long of them if they’re signaling Bullish @Hedgeye TREND heading into a Global Industrial Economic Acceleration.
As you can see in today’s Chart of The Day (slide 35 of our Macro Themes deck):
- The Global Economic Slowdown/Recession ended in Q4 of 2023
- China is the last major Cyclical/Industrial Economy to “bottom” (should happen here in Q1)
- The Mean/Mode of the World = #Quad2 by Q4 of 2024
For the “Rate Cut” fans who are still out there, #Quad2 means that both GROWTH and INFLATION are re-accelerating at the same time. Rate Cuts will only fuel that fossil fuel fire. So good luck to PE Powell on that!
Come to think of it, I might send my old partners at Carlyle a note on this over the weekend (because they’re boys with Powell, hence the nickname), because this is some top-secret Nowcasting stuff:
A) We have the USA’s INFLATION re-accelerating (again) in March with a MONTHLY #Quad3 (Stagflation)
B) We have a high and rising probability of back-to-back MONTHLY #Quad2s for the USA in May and June
I know, I know. The PE guys don’t do The Quads like I do. But they do math. They’ll get it.
They need to get their ole Partner Powell to not become Arthur Burns here and be the catalyst for a US Dollar Devaluation and reaccelerating inflation!
Btw, did you see India’s GDP report yesterday?
O
M
G!
Look at that +8.4% print!
While we made one of our best Global Equity Asset Allocations ever in getting Long India (via INDA and SMIN) back in June of 2023 (while uniquely American retail investors were still chasing Small Cap Traps)…
And India’s Stock Market (BSE Sensex) was up +1.6% on the “news” to a new Cycle High…
I can’t help but ask you the most fundamental of “demand” questions: what does that mean, on its own, for the price of Oil? How about China’s GDP re-accelerating from a #Quad4 Deflation Recession to #Quad2 at the same time?
Do you think human beings who live in abject poverty in China, India, Turkey (we added TUR to our new Portfolio Solutions product on red this week too as they exit a recession), etc. care about Al Gore’s climate change video?
Again, I’m not trying to engage in a political debate. I’m trying to make money. And these poor people who live on less electricity than you have in your refrigerator demand CHEAP accessible energy.
Looking forward to seeing all the climate-change heli-skiers in Tahoe this weekend (they’re getting 12 feet of snow)!
Our levels
Immediate-term Risk Range™ Signal with @Hedgeye TREND signal in brackets
UST 10yr Yield 4.19-4.36% (bullish)
High Yield (HYG) 76.81-77.56 (bullish)
SPX 4976-5150 (bullish)
NASDAQ 15,684-16,271 (bullish)
RUT 1984-2070 (bullish)
Tech (XLK) 201-210 (bullish)
Nikkei 38,055-40,098 (bullish)
BSE Sensex (India) 72,204-73,901 (bullish)
VIX 12.55-15.64 (bearish)
USD 103.60-104.50 (bullish)
Oil (WTI) 76.46-79.98 (bullish)
Copper 3.79-3.93 (bullish)
Uranium (URA) 26.45-28.97 (bearish)
Bitcoin 53,186-65,228 (bullish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
