In case you’re not familiar yet with Hedgeye’s Quad model framework, the current setup in China is textbook Quad 4.
“It’s a perfect example of Quad 4 playing out: growth slowing when inflation slows,” Daryl Jones explains in this clip from The Macro Show. “You can see what’s happening in the stock market. That’s a fundamental case study.”
“China GDP is going from 5.5% growth to 3%,” Keith McCullough adds. “China’s never reported a 3% growth rate or a 4%. So, it’s the lowest level of Chinese growth.”
As a reminder:
Quad 1 = Growth Accelerating, Inflation Decelerating
Quad 2 = Growth Accelerating, Inflation Accelerating
Quad 3 = Growth Decelerating, Inflation Accelerating
Quad 4 = Growth Decelerating, Inflation Decelerating
Watch the full clip above.
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