Markets are clearly worried. Lagarde After stocks rebounded from a brief stint in correction territory (technically a 10 percent decline from the most recent highs), they are actively retesting the February market lows. They are also on the verge of re-entering correction mode, with the S&P off 9.91 percent as of the close on March 23. The extreme calm of late 2016 and 2017 that investors became accustomed to seems so very distant now, given the current market environment of increasing volatility or growing price fluctuations. Not only have price swings become more pronounced in 2018, particularly since the February sell-off, but measures of implied volatility (or forward looking expectations of market volatility/risk) are also climbing. The VIX index measures the 30-day expected volatility of the S&P 500. A higher VIX indicates elevated market uncertainty (risk) while lower VIX readings indicate market complacency toward risk. Keep in mind that the VIX registered an … [Read more...] about Op-Ed: Walking the tightrope of stock market concerns
Why chinese stock market is falling
Driving the Day KEEP YOUR HOLIDAY PLANS … MAYBE!: MCCONNELL PREDICTS NO SHUTDOWN: GEORGE STEPHANOPOULOS speaks to SENATE MAJORITY LEADER MITCH MCCONNELL on ABC’S “THIS WEEK”: STEPHANOPOULOS: “Republicans have a majority in the House and the Senate. Can … you keep the government open on your own?” MCCONNELL: “Look there’s not going to be a government shutdown. It’s just not going to happen.” THE BIG PICTURE: REMOVE THE BLUE BAG -- PETER BAKER on A1 of the SUNDAY TIMES -- “Wrenched From Scandal to Success, Trump Looks Ahead, and Over His Shoulder”: “The highs and lows of a presidency rarely come in such quick succession. But within hours, President Trump watched as one of his closest former aides pleaded guilty and promised to help prosecutors seek out more targets, then stayed up late to cheer on the Senate as it broke through months of gridlock to pass the largest tax cuts in years.Story Continued … [Read more...] about MCCONNELL: Gov’t won’t shut down — TRUMP unleashes on Twitter: POTUS says people who lost money in stock market should SUE ABC — INSIDE the GRIDIRON DINNER — PETER BAKER A1: TRUMP’s whiplash presidency
Chinese stocks plunged Monday after the country's securities regulator rapped three major brokerages for continuing to lend money for stock purchases in violation of rules. As punishment for extending so called "margin trading" contracts, the brokerages are forbidden to offer credit to new customers for three months. How much did shares fall? At one point Monday, the Shanghai Composite Index was down 8.3 percent. It later trimmed that to a loss of 7.7 percent. Share prices of brokerages were hardest hit, with some falling by the daily loss limit of 10 percent. Despite the sharp fall, the Shanghai Composite Index is still up 55 percent in the past 12 months and up 33 percent for the past three months. Why did the market fall so much? Investors and analysts see the penalties against the brokerages as foreshadowing more curbs on credit-financed trading by China's government. Authorities want to stop the stock market's boom over the past year from turning into a bubble that could … [Read more...] about Why China’s stock market plunged 8 percent
Until recently, China was considered the economic dragon that was breathing fire into the world's markets. In 2016, that dragon may exhale more fumes than flames. American investors received a rude 2016 awakening when U.S. shares plunged on Monday following a rout in the Chinese markets that erased nearly $600 billion of that country's stock market valuations. The Dow Jones industrials index ended the first trading day of the year down by 275 points, its worst yearly start since 2008. The fallout comes after China's stock market saw a dazzling start to 2015, with stocks more than doubling in the 12 months prior to June. While some may want to write off Monday's downturn as a tough day in the market, over the past year serious cracks have been emerging in China's foundation. Those range from a slowdown in manufacturing to a labor shortage, thanks to the country's decades-old one-child policy, which has resulted in a rapidly aging population. Given that China is now the world's … [Read more...] about 4 reasons why China’s problems could harm U.S.
In the U.S., once seen as an island of prosperity in a world of economic malaise, a fear of recession now hangs in the air. While there are creditable arguments that the globe's foremost economic power can muddle through without much harm, the question persists: What could go wrong? Leading up to the cataclysm that rocked civilization eight years ago, defaults on subprime mortgages were growing. But the conventional view at the time held that the housing problem could be "contained." In 2007, the economy was expanding at a healthy-looking annual pace of around 4 percent. Then the bottom dropped out. Those subprime loans proved to be a powerful poison whose ill effects reached everywhere. This time, the culprit is China. In recent years, its voracious growth begat demand for commodities produced by emerging market nations, which begat overspending on those tyros' home turf, which begat a fad among developed countries to invest in them. Once China's growth contracted, so did everything … [Read more...] about Why the U.S. is vulnerable to a recession