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    MARKET EDGES

    Identify global risks and opportunities with essential macro intel using Hedgeye’s Market Edges.

Yesterday was the first day of trading in 2016. It wasn't pretty. In case you missed it, there was a broad selloff in global equity markets.

INSTANT INSIGHT | Central Planning, China, & the Russell 2000  - China cartoon 01.05.2015

First up on our red data radar screen, China's Shanghai Composite Casino. It dropped as much as 7% on the day. In response, the Communist politburo responded with a full-court press. Here's what Hedgeye CEO Keith McCullough had to say about it in a note to subscribers this morning:

"The communists did everything they could to centrally plan China’s markets overnight – stopped the Yuan at 6.516 and the State bought stocks! Lol – that went over as well as it did in AUG didn’t it? #GrowthSlowing and #Deflation remain the gravity point."

Oh, and let's toss in the Russell 2000... 

"Liquidity-traps and US domestics slowing remain great reasons to be out of or underweight small caps – RUT -2.3% yesterday (vs. SPX -1.5%) and is now -14.4% from the all-time #Bubble high we called in July. We're reiterating sell on bounces." 

 

INSTANT INSIGHT | Central Planning, China, & the Russell 2000  - Russell cartoon 12.02.2014

We'll conclude with a parting thought to Wall Street consensus which was screaming "buy the dip!" yesterday:

"Buying the dip" has only worked in a narrow group of momentum stocks. The rest of the market is crashing.