Up 17% YTD On Bearish China Bet, Crescat Global Macro Predicts The Pain Will Spread To The S&P 500

Up 17% YTD On Bearish China Bet, Crescat Global Macro Predicts The Pain Will Spread To The S&P 500

From Crescat Capital’s latest update to investors

China equity and yuan shorts worked well for Crescat’s hedge funds in July although US equity shorts and the gold longs held back the performance. We expect US equity shorts and gold longs to be changing soon in our favor. The S&P 500 is re-testing its January 26 high, but there are many bearish divergences that indicate it will fail soon. Since the Chinese economy, currency, and stock market are crashing, it is doubtful the S&P 500 can break out to new highs now. With record valuations of US equities, peak earnings growth, peak margins, and peak US economic growth all hitting in the first half of 2018, what is left to drive the S&P 500 higher going forward? Nothing. We think China and our own looming deficits will drag it all down.

Collapse of China Yuan Foreshadowing Coming Collapse of S&P 500

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S&P 500 Index Re-test Looks Set Up to Fail

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July estimates:

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August estimates, off to a good start:

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Crescat Capital

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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

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