South Korean Growth Surprises to the Downside (10/25): Comping up against its most difficult comparative base of the current cycle, South Korean Real GDP growth slowed -80bps to a 9-year low of 2.0% YoY. Our GIP Model has the South Korean economy effectively hugging the line between #Quad2 and #Quad1 here in 4Q18E, followed by the always-precarious #Quad1/#Quad4 straddle in 1H19E. Ahead of this “less bad” outlook, we closed our EWY short admittedly a bit early back on 10/5, but with market signals having turned increasingly bearish since (e.g. recent new lows in the KOSPI and KRW), we’re keen to wait this one out prior to turning bullish. If the SMH chart is any indication, it’s going to get worse before it gets better for global cyclicals. We’re not in a rush to lose money – and our willingness to obey market signals is the #1 reason we haven’t yet hit the “buy” signal on a factor exposure like U.S. Homebuilders despite having a positive fundamental bias.