Below is a brief excerpt transcribed from Thursday's edition of The Macro Show hosted by Hedgeye CEO Keith McCullough.
A complete smackdown in the Chinese stock market.
Every macro tourist on the planet is apparently now an expert on the Coronavirus. In particular, how the outbreak is going to end the world. Not withstanding that the world could end, what we’re going to do here at Hedgeye is execute on the process.
What you saw was that the locals in China diverge materially versus not only the rest of Asia, but the rest of the world in terms of their equity market reactions.
So what happened in the Shanghai Comp as an index? Look at the chart.
Straight down with a 2.8% material decline. Thankful we’re not long that.
“But Keith you’re long EM!”
Well, it's got two big stocks named Alibaba and Tencent which don’t look like the Shanghai Comp as an index. Moreover, we didn’t tell you to buy the Shanghai Comp as an index because it has industrial exposures which we would not want to be long.
Let’s all remember, "there’s no crying in macro risk management."
I’m not trying to channel my inner Tom Hanks here, what I’m trying to tell you is that the locals diverge. So what you had on the other side of the Shanghai Comp is India. India was up 70 basis points overnight and remains bullish trend. Taiwan was up +0.2%.
So if you are a Macro Tourist or you are trialing our product, and you’ve spent a lot of time jumping from CNBC to Fox over headlines, wake up. You’ve probably lost a lot of hair, gained a lot of weight, and lost a lot of money.
Please don’t do that. Be data dependent and go on with your day.
