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A Shanghai Surprise Of Another Kind?

Like so many of this year's biggest market rallies and selloffs, the action began in China.

Investors bid commodities higher after new data showed that nation’s purchasing manufacturing index or PMI rose to a 7 month high in November, beating expectations, with output and export orders fueling the rise.

Investors considered the trend bullish; interpreting results to mean that Chinese demand for materials and resources was getting stronger.

However Fast Money resident contrarian Steve Cortes isn't buying the Shanghai comeback.

China faces the opposite problem that the US faces, he says – we’re worried about deflation and they’re worried about inflation; sharp inflation especially in food prices .

Because those higher food prices could trigger unrest Cortes thinks Beijing will raise rates - even though they might not want to.

And "Chinese tightening will likely have impact globally. Raising interest rates won’t only temper their hot growth it will really put the brakes on their economy. I don’t see a soft landing," he adds.

As a result Cortes suggests betting against China related assets. "I’m skeptical of resources, energy as well as the rails," he says.



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Trader disclosure: On December 1, 2010, following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Pete Najarian owns (WFT) call spread. Pete Najarian owns (MEE) call spread. Pete Najarian owns (F) bonds. Pete Najarian owns (GDXJ) call spreads. Pete Najarian owns (GRS) calls. Pete Najarian owns (TCK) call spread. Pete Najarian owns (C), (PFE), (CNI) and (DOW). Karen Finerman owns (AAPL) and (BAC). Joe Terranova Owns (FCX), (UPL), (C), (PEP), (VRTS), (OXY), (AXP), (GS), (POT), (AAPL), (NKE) and (OIH). Adami owns (AGU), (BTU), (NUE), (C), (GS), (INTC) and (MSFT). Stephen Weiss owns (VZ), (MEE), (UPS), (JWN), (QCOM), (TBT), (COP) and (DVN). Steve Cortes is short (UNP). Steve Cortes owns (GS), (MS), (BAC) and (CME). Steve Cortes is short German DAX. Steve Cortes is long U.S. Dollar vs. Mexican Peso, Euro, Australian Dollar Steve Cortes is long U.S. 2-year treasury notes.

KAREN FINERMAN
Finerman’s firm owns (BKS)
Finerman & Finerman’s Firm owns (JPM)
Finerman & Finerman’s Firm owns (MSFT)
Finerman’s firm is short (IJR)
Finerman’s firm is short (MDY)
Finerman’s firm is short (SPY)
Finerman’s firm is short (IWM)
Finerman’s firm owns S&P 500 and Russell 2000 puts

JOE TERRANOVA
Terranova is Chief Market Strategist of Virtus Investment Partners, LTD
Virtus Investment Partners Owns More Than 1% Of (ABAX)
Virtus Investment Partners Owns More Than 1% Of (ALK)
Virtus Investment Partners Owns More Than 1% Of (AMKR)
Virtus Investment Partners Owns More Than 1% Of (CCG)
Virtus Investment Partners Owns More Than 1% Of (CASS)
Virtus Investment Partners Owns More Than 1% Of (CSVI)
Virtus Investment Partners Owns More Than 1% Of (EPR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (FCFS)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (KRC)
Virtus Investment Partners Owns More Than 1% Of (LDR)
Virtus Investment Partners Owns More Than 1% Of (LPHI)
Virtus Investment Partners Owns More Than 1% Of (MGRC)
Virtus Investment Partners Owns More Than 1% Of (NRCI)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (XLE)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (XLK)
Virtus Investment Partners Owns More Than 1% Of (XLU)
Virtus Investment Partners Owns More Than 1% Of (SUBK)
Virtus Investment Partners Owns More Than 1% Of (WDFC)
Virtus Investment Partners Owns More Than 1% Of (YDNT)
Virtus Investment Partners Owns More Than 1% Of (CLB)
Virtus Investment Partners Owns More Than 1% Of (DRYS)

GUY ADAMI
Adami’s wife works at Merck

MIKE KHOUw
Cantor Fitzgerald makes a market in (AAPL)
Cantor Fitzgerald makes a market in (ALTR)
Cantor Fitzgerald makes a market in (ANR)
Cantor Fitzgerald makes a market in (ARMH)
Cantor Fitzgerald makes a market in (BAC)
Cantor Fitzgerald makes a market in (C)
Cantor Fitzgerald makes a market in (CSCO)
Cantor Fitzgerald makes a market in (DDAIF)
Cantor Fitzgerald makes a market in (F)
Cantor Fitzgerald makes a market in (FCX)
Cantor Fitzgerald makes a market in (FDX)
Cantor Fitzgerald makes a market in (GM)
Cantor Fitzgerald makes a market in (JPM)
Cantor Fitzgerald makes a market in (LLTC)
Cantor Fitzgerald makes a market in (MEE)
Cantor Fitzgerald makes a market in (MOT)
Cantor Fitzgerald makes a market in (MSFT)
Cantor Fitzgerald makes a market in (NVDA)
Cantor Fitzgerald makes a market in (QCOM)
Cantor Fitzgerald makes a market in (RIMM)
Cantor Fitzgerald makes a market in (TSN)
Cantor Fitzgerald makes a market in (TXN)
Cantor Fitzgerald makes a market in (UPS)
Cantor Fitzgerald makes a market in (VZ)

DENNIS GARTMAN
Funds managed by Gartman own (MSC),
Funds managed by Gartman own (RJA)
Funds managed by Gartman own (BPT)
Funds managed by Gartman are short (DB)
Funds managed by Gartman are short the S&P 500
Funds managed by Gartman are short the Euro
Funds managed by Gartman are short the Japanese Yen
Funds managed by Gartman own Gold

BRIAN KELLY
Accounts Managed By Kanundrum Capital Own (GLD)
Accounts Managed By Kanundrum Capital Own (GDXJ)
Accounts Managed By Kanundrum Capital Own (SLV)
Accounts Managed By Kanundrum Capital Own (JPM)
Accounts Managed By Kanundrum Capital Own (C)
Accounts Managed By Kanundrum Capital Own (WFC)
Accounts Managed By Kanundrum Capital Own (RDC)
Accounts Managed By Kanundrum Capital Own (ARMH)
Accounts Managed By Kanundrum Capital Own (AAPL)
Accounts Managed By Kanundrum Capital Own (FCX)
Accounts Managed By Kanundrum Capital Own (QCOM)

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