Of course, the Hang Seng also dropped 4% on Monday, and U.S. stock market indexes closed at record highs.
Whether or not investors should worry about what’s happening in the world’s second-biggest economy may be down to a few questions, Sven Henrich, founder of NorthmanTrader.com, tells MarketWatch: “Are they [China] concerned about an asset bubble and they’re letting the air out before it pops hard and does more damage? Or are they the canary that says the recovery has already peaked? Or both? One wonders. If either of these are true, then U.S. equities are at risk of spill over.”
That brings us to our call of the day from The Market Ear blog, which breaks down some potential risks ahead for markets and one possibility — big investors getting hurt by China fallout may end up less willing to take on risk elsewhere.
“The stress we are seeing in Chinese tech is now spreading to other sectors. Sure, for now this is a local problem, but it could potentially become a global problem, and this so mainly from risks in terms of P&< [profit and loss]. The value loss is significant, and the pain is felt globally,” said the blog.
For example, the holders of Tencent 700,
Then there’s Alibaba 9988,
“BABA’s biggest holder is Softbank 9434,
“The latest casualty from last week was the edtech sector. Top 10 holders of TAL Education TAL,
Market Ear finishes off with a little history lesson about a boom in China stocks that began in mid 2014 and ended with a massive 2015 crash.
“During the first phase of the sell-off it was considered a local Chinese stock market bubble imploding. Some 2.5 months later, the [S&P 500] decided to care and developed markets puked big as the second phase of the Chinese equity sell-off resumed,” said the blogger.
Get ready for big tech earnings
Earnings are rolling out, with medical device maker Boston Scientific BSX,
Alongside the kickoff of the Federal Reserve’s two-day meeting, durable goods orders rose slightly in June, with a big upward revision for May. Still to come are the S&P Case-Shiller home price index, the Conference Board’s consumer confidence survey and housing vacancies.
On the COVID-19 front, U.S. officials issued a ‘do not travel’ order for Spain and Portugal, citing high infection levels.
Dow futures YM00,
The results of Deutsche Bank’s July monthly market sentiment survey included plenty of insights into how people are feeling about COVID-19 rules. The below reveals many think airlines, nightclubs and any gathering of big crowds should ask for vaccine certificates.
Ernest Hemingway lookalike winner is crowned at Sloppy Joe’s Bar in Florida.
Female weightlifter Hidilyn Diaz wins gold for Phillippines, her country’s first in 97 years. She’ll also get a house and 10 million pesos.
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