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INSTANT INSIGHT | Russell 2000, China & Financials   - China cartoon 01.07.2016

So, Chinese stocks made lower-lows overnight, closing down another -5.3%. Meanwhile, the Russell 2000 is down -19.2% since July.

No worries. Right?

Earnings season starts this week with JPMorgan (JPM) reporting this Thursday. There’s no irony that the Financials (XLF) -7.3% were one of the worst S&P Sector exposures last week; with both #Deflation and a #Recession in Industrial/Cyclical terms, long-term yields fall, no matter what the omnipotent central planners at the Fed think they can do.

INSTANT INSIGHT | Russell 2000, China & Financials   - xlf

If you thought that cyclical "PMIs bottomed" when the employment/consumption/profit cycle peaked (at the end of Q2 2015), and you bought the Financials on that, you’re down -13.6% since the July high.

Beats being long Apple from there (down -26.5% since S&P 500 top)!