Peering through the fog of daily distractions, there is only really one thing that concerns me: China. It has been 5 days since the Chinese equity market (as measured by the Shanghai Composite) officially entered bear market territory. But there is much more ominous portents than trading 20% from its top in August 2009 (at 3478 points).
As China’s economy has grown in size, it has come to take a pivotal role in global economic fundamentals. Where their economy is headed not only has implications for them but for everyone else as well. If we assume that the stock market is an imperfect forward discounting mechanism for economic realities then the current weakness should give any bull some pause.
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