After briefly turning negative in April of this year, South Korean export growth – described by BofA’s Josh Hartnett as “a notoriously good global cyclical indicator” – just collapsed, flashing bright red warning signals for global profit and economic growth.

In April Korean exports dipped modestly negative…

But tonight the September print came in at -8.2% YoY – dramatically worse than the 5.5% drop expected) with exports to US plunging:

  • Exports to China at $14.59b, +7.8% y/y

  • Exports to US at $5.82b, -11.8% y/y

  • Imports from China at $7.89b, -6.5% y/y

  • Imports from US at $4.31b, +5.8% y/y

And while Semiconductor exports soared, autos and ships/vessels plunged…

  • Semiconductor exports at $12.43b, +28.3% y/y

  • Steel exports -43.7% y/y

  • Automobiles exports at $2.97b, -22.4% y/y

  • Ship/Vessel exports at $1.39b, -55.5% y/y

And, as a further reminder, the last time South Korean export growth turned negative in the downward direction was just around the time of China’s devaluation in the summer of 2015, when global markets were on the verge of a 20% bear market, and only the Shanghai Accord of February 2016 prevented a free fall in risk assets.

If the South Korean “advance indicator” is as accurate as it has always been, forget about soaring earnings for the coming quarters: an earnings depression is just around the corner!

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