The Chinese equity market declined about 4.5% overnight, largely in response to better than expected Q1 ChinaGDP figures (+11.1% vs. 10.4% expected and +10.4% for Q4), which stoked the fears of higher Chinese interest rates, and global pressure on Chinese authorities to let the Yuan rise (vs. the $)....
Well second dip- it hurt us last time. This time I think since the fear is over interest rates, economic growth and the level of the Yuan the effects here should not lead to another full scale correction. Last time it felt to me like it was about stock valuation and that becomes much more scary because it effects all ADR's and our stocks in comparison as well...
The result may be a quicker move by Chinese authorities to control their currency and re value upwards and they needed that kick in the pants.
What to short? Maybe Industrial stuff for a while until the dust clears.
The cards however folks are starting to stack up against us-- India has all but stopped going up and if China can be turned over well it's a GLOBAL slowdown ahead of us not just US....
Stay tuned....
Well second dip- it hurt us last time. This time I think since the fear is over interest rates, economic growth and the level of the Yuan the effects here should not lead to another full scale correction. Last time it felt to me like it was about stock valuation and that becomes much more scary because it effects all ADR's and our stocks in comparison as well...
The result may be a quicker move by Chinese authorities to control their currency and re value upwards and they needed that kick in the pants.
What to short? Maybe Industrial stuff for a while until the dust clears.
The cards however folks are starting to stack up against us-- India has all but stopped going up and if China can be turned over well it's a GLOBAL slowdown ahead of us not just US....
Stay tuned....
