CHART OF THE DAY: Reality Bites In Beijing

08/01/18 08:11AM EDT

Editor's Note: Below is an excerpt and chart from today's Early Look written by Hedgeye CEO Keith McCullough. Click here to learn more about what it means for your portfolio.

What would be a big catalyst for a Credit Cycle (*hint, The Cycle #slowing)? I can tell you what the catalyst wasn’t: 

A) The USA being in a record 8 straight quarters of year-over-year growth #accelerating, which started with
B) The Shanghai Accord of 2016 …
C) And Zero Edge articles generating ‘end of the world’ click-bait all the while 

On A), anyone with an 11th grade education (who wasn’t bearish on US Growth for the last 1-2 years) can readily show you the 8 consecutive quarters of economic growth accelerating. 

On B), The Shanghai Accord, is now 2.5 years old and it warrants a refresher. 

As you can see in our Chart of The Day, the art of the deal was very straightforward: 

  1. The Fed rhetorically eased significantly into the lows of the 2015-2016 Industrial Recession
  2. Which allowed the Chinese to unleash a wave of liquidity never seen to man, woman, or child 

Did the largest central market planning event in Chinese history matter to the subsequent “globally synchronized recovery?” Uh… yes. Big time. And that, my data-dependent-rate-of-change friends, is why we have #GlobalDivergences (slowing) in 2018. 

CHART OF THE DAY: Reality Bites In Beijing - Chart of the Day

CHART OF THE DAY: Reality Bites In Beijing - market brief

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