Editor's Note: Below is a brief excerpt and chart from today's Early Look written by Hedgeye Macro analyst Christian Drake. Click here to learn more about the Early Look.
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On the fundamental front it’s a congruous story. Brazil GDP printed negative, Italy GDP printed negative, South Korean and Japanese Industrial production growth remained negative and China’s Manufacturing PMI missed as New Orders re-breached 50 to the downside, Export Orders fell to an increasingly contractionary 46.5 while factory employment printed a fresh cycle low. On the geopolitical front, the latest policy by tweet decree vis-à-vis Mexico is only serving to amplify growth angst that was already in crescendo. Not to put too broad a stroke on it, but at some point, the market becomes overtly disabused of the notion that quantifying or otherwise reasonably discounting the derivative effects of a multi-front trade war is a tractable exercise and just punts... particularly when a stubbornly persistent drip of Quad 3/Quad 4 (growth slowing) high frequency, global fundamental data continues to confound green shoot enthusiasts, price momentum is corroborating those fundamental trends and the first order effects of the latest trade escalation haven’t even hit yet. |
