Wednesday, May 30, 2007

China Dips, S&P Rallies

This is from Paul Hickey. It seems the Chinese and US stock markets have seized their strange coupling:

"We all remember the large declines in China's equity markets back in late February. The Shanghai Composite fell 8.8% on February 27th, and the S&P 500 followed suit by falling 3.4%. Investors also remember how quickly the S&P 500 made back those losses, and the next time China had a large decline (-4.5% on 4/19), the S&P was only down 10 bps. Today we saw another large drop in Chinese equities, as the Shanghai Composite fell 6.5%. This time, the S&P 500 was actually up 80 bps on the day. So while we continue to read about investors fearing a bubble in Chinese equities, today's drop didn't seem to affect them too much."

See the original blog post here.

Posted by The La Jolla Guy at 2:37 PM

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