Have Investors Learned Nothing From 2008 Global Financial Crisis?
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Misguided investors will assess the economy based solely on the CPI number announced today. Keith McCullough says that’s like flying a fighter jet and looking only at the fuel gauge.
“When a real pro looks at their risk management screens, they have U.S. credit default swaps, bank credit default swaps, high-yield spreads, copper and Treasury yields,” explains Hedgeye’s Risk Manager in Chief in this clip from The Macro Show.
Previous recessions should have taught us that one data point doesn’t override the broader mosaic of economic and market factors that tell us something different.
“There’s a widening disconnect between what’s being signaled in the fixed income markets and what’s happening in the equity markets,” Macro and Financials analyst Josh Steiner adds. “It’s just this sort of willful suspension of disbelief. It’s not like we haven’t seen it before, if you go back to 2007, as an example, you were getting signals loud and clear from the fixed income markets.”
Watch the full clip above.