Another year, another overreaction. Stocks plunged in China on Monday after December’s industrial manufacturing number came in lower than expected. After dropping 7%, trading was halted prematurely for the first time ever. U.S. stocks sold off sharply on the open, though they calmed after that and rallied at day’s end. When it was over, the S&P 500 dropped about 1.5%. Not a great start to the year! #-ad_banner-#While it’s scary to experience a sharp downward trend after the holiday lull, calmer heads seemed to prevail — at least in U.S. markets — and that makes sense. China’s economic slowdown has… Read More
Another year, another overreaction. Stocks plunged in China on Monday after December’s industrial manufacturing number came in lower than expected. After dropping 7%, trading was halted prematurely for the first time ever. U.S. stocks sold off sharply on the open, though they calmed after that and rallied at day’s end. When it was over, the S&P 500 dropped about 1.5%. Not a great start to the year! #-ad_banner-#While it’s scary to experience a sharp downward trend after the holiday lull, calmer heads seemed to prevail — at least in U.S. markets — and that makes sense. China’s economic slowdown has been common knowledge for several quarters, and the December numbers were far from catastrophic. And China’s economy is far less dependent on manufacturing than it was a decade ago. The country’s burgeoning middle class has created a fast-growing consumer sector that is relatively healthy. Even if China’s economic growth is lower than expected in 2016, it’s still expected to continue to grow faster than ours, and the U.S. economy is chugging along fairly well and should remain in an expansion mode. U.S. companies and consumers have spent the past several years getting their balance sheets in order and accumulating cash. Read More