Markets Archives - Page 449 of 782

China’s Structural Recalibration

China has posted its lowest annual GDP growth since 1990. The slowdown is seen as a major concern for some investors, but against a backdrop of disappointing consumer spending, intensifying deflationary pressures, tepid export growth, and a stock market that looks out of control, 6.9% growth was expected for 2015. It is not the stellar growth of the past decades and is down from 7.3% a year earlier, but it is still decent given local and global economic conditions.

Calculating the Cost to the UK without the EU

There have been a couple of notable signals about the upcoming EU referendum lately. A public opinion poll showed a clear majority lead for Brexit, then a Financial Times poll of more than 100 leading economists concluded that a vote to leave would damage UK growth.

However, while the arguments for and against are still shaping up, everyone appears to be ignoring how the credit-ratings agencies would respond to Brexit.

China’s Really Big Population Shift to the Cities

When the 18th Central Committee of the Chinese Communist Party (CCP) decided to abolish the one-child policy in October 2015 it made headlines throughout the world. However, while the abolition of the policy is the result of the Chinese government’s newfound concern over low fertility, the low birth rate is only one of several major demographic challenges facing China.

U.S. Retail Sales, Economic Confidence Strengthen

Retail sales enjoyed strong end-of-year gains, with e-commerce growing at a rapid rate. In total, retail sales in brick and mortar stores rose 3.1 percent year-over-year in December, according to a new study by the National Retail Federation.

Could South Korea’s Two Opposition Parties form an Alliance?

Last year was a challenging year for South Korea’s democracy. Since the inauguration of the Park Geun-hye government in 2013, there have been a number of incidents that raise serious questions about the soundness and maturity of South Korea’s democracy. These range from the interference of the National Intelligence Services in the 2012 presidential election to the government’s harsh crackdown on an anti-government rally in November 2015.

Xi’s Anti-corruption Program Lacks Details

These days, political death in China comes in two moves. The first is when the dreaded Central Discipline and Inspection Commission (CDIC) announce that you are under investigation. After that, you live on a sort of life-support machine until the final blade falls with your expulsion from the Communist Party. Then there is no turning back.

China’s Potential Economic Credibility Hit

The sudden, sharp fall of Chinese stock prices twice in 2015 and again this month does not necessarily herald a further slowdown of GDP growth. However, investor confidence, the bedrock of a healthy economy, has been shaken both in China and throughout the world.

As Chinese leaders struggle to implement market-based reforms, a severe economic crisis that causes social disruption cannot be completely ruled out. In such a case, what might happen?

The Chinese Equity Market is in the Emerging Markets’ Spotlight

EM ended last week on a sour note. The most important factor for global risk appetite has become China, with the Fed tightening cycle now on the back burner. Our base case remains that China muddles through, but policymakers there need to communicate better with the markets. The PBOC fix and Chinese equity market performance will likely be the biggest drivers for global markets this week.

Commodity prices continue to slide, with oil and copper making new cycle lows last week and adding to the gloom.

China Officials Warn of Global Financial Crisis

Chinese officials predict economic turmoil for the global economy. State Councillor Yang Jiechi told G-20 representatives in Beijing that recent volatility and “constant changes and intense transformations” will lead to unprecedented challenges to the world. “It is not possible to completely discard the possibility that an economic crisis could once again take place, and the problem should not be neglected,” he said in the meeting, adding “preventing or reducing negative effects from countries’ domestic policy measures is a pressing task.&quot

Don’t Hold on to the S&P 500-Oil Correlation

The US stock market and the oil market appear joined at the hip. The Great Graphic here, created on Bloomberg, shows the correlation of the two markets. It is near 0.77, which is the highest since September 2013.

The correlation was conducted on the level of the S&P 500 and the level of the front-month light sweet crude oil futures contract. It tells us that the two markets have been moving in the same direction nearly eight of ten sessions over the past 60 sessions.