In this clip from The Macro Show, Hedgeye CEO Keith McCullough delivers a reality check for anyone prematurely calling a shift to Quad 1.
“If the U.S. market had exited Quad 4, the Russell 2000 wouldn’t be getting smoked,” McCullough says, pointing to continued weakness in small caps—especially value names that typically outperform in a real Quad 1 environment.
“Yesterday was not a Quad 1 day from a small cap factor exposure perspective,” he adds. “We haven’t been long the Russell. It was down 0.7% yesterday while the S&P was up 0.2%. It’s still down over 14% from where it peaked in Quad 4.”
As always, McCullough sticks to the data—and pokes fun at those who don’t.
“There are people on X/Twitter who are only fans of people who talk about recessions,” he quips. “But the reality is Q1 is still a Quad 4 quarter, and earnings season will reflect that.”
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