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Stocks pulled back on Monday, and although the decline was modest, the catalyst has given some traders cause for concern. China cut its GDP target for this year to 7.5 percent, which would represent the slowest economic growth in eight years.The development triggered chatter that China’s decade-long run as the world's growth engine may be over — along with unprecedented demand for commodities and ultra-cheap labor and parts for manufacturers.To make the situation all the more delicate Credit Suisse put out a note that said the commodity super-cycle underpinned by China had peaked.
How should you position now?
Trader Brian Kelly says don’t panic. “This doesn’t mean the world is over,” he says. Credit Suisse simply said the super-cycle had peaked not ended.However, Kelly does suggests taking a hard look at your portfolio. "It's probably time to decrease exposure to anything that’s highly tethered to Asia growth." “For me I sold EWA” he says. Decline in demand for commodities from China will hurt Australia. And he sold EWY . South Korea is a heavily export dependent economy.
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