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"World markets shuddered on Monday, as Turkey’s worsening currency crisis persuaded investors to dump equities and emerging markets and flee to safer assets such as government bonds and the dollar." -An article in Reuters today |
We think we know exactly what's going on here. Our Quarterly Investment Outlook themes for Q3 of 2018 are driving these financial market returns: So, is it Turkey? Trump's trade war? Or something else causing the selloff this morning...
- #StrongDollar
- #HaveRatesPeaked?
- #ShortEM
Investors are watching grains of sand accumulate on an unstable sandpile. Escalating risks underlying this emerging markets selloff have been in place for some time now. Our subscribers were proactively prepared.
So, while the "Day Late, Dollar Short" media can wake up investor consensus to these realities, the underlying economic data has been crystal clear for some time now: Global growth is slowing.
Here are a few videos we've released recently laying out these broader Macro research calls from earlier this year...
McCullough: Why the Dollar Has Strengthened (6/18/18)
When emerging markets slow and the currencies in those countries become devalued, investors flock to the U.S. dollar, driving up the value of the greenback. The opposite was true when the world was in a globally synchronized recovery from 2016 through 2017.
It’s really that simple. “When the world slows, or you have global divergences, the world flows away from what they were speculating on,” McCullough explains in the clip above. “And when there’s a globally synchronized recovery, the number one loser is the U.S. dollar.”
McCullough: The Market Is Getting Ready To Rotate (6/20/18)
“This is why the market is starting to signal lower highs on the 10-year yield,” Hedgeye CEO Keith McCullough explains in the clip above from The Macro Show. “The market is getting ready to rotate.”
McCullough discusses where we are now with respect to Growth and Inflation, and more importantly, where we are heading. He is joined by Senior Macro Strategist Darius Dale. The two explain some of the key investing implications for investors as we head into the second half of the year.
McCullough: Emerging Markets Are In Serious Trouble (5/24/18)
"What is the probability of an emerging market crisis emanating from Turkey or elsewhere?"
That's what a subscriber asked Hedgeye CEO Keith McCullough in the video above, an excerpt from The Macro Show on May 24th 2018.
To be clear, we've been warning about Emerging Market risks long before they became headline news. In fact, we said beware Emerging Markets exposure at the beginning of the year. Markets like Argentina, Poland, Turkey, Indonesia and others have seen sharp declines since.
