Have You Noticed How Much China Is in the News Lately?
If we turn the calendar back to January and February 2016, the U.S. stock market saw one of its worst annual starts in history. China, with the currency and stock market that was quickly moving downward, caused much of the setback in the United States markets. This is because China’s enormity and its global economic importance have moved this country ahead of the United States in its influence over world markets.
This premise was confirmed when, later in the year, the U.S. market righted itself at the same time that the Chinese markets rebounded.
Today, China is even more important than it was in early 2016. It has further advanced its Silk Road Initiative and its Shanghai Development Organization (SCO). This organization will shortly admit two more countries-India and Pakistan. China now stands on steadier ground, as do the countries whose well-being it immediately influences.
(The source for this part of the email is the February 21, 2017 “Market Update”, written by Dr. Stephen Leeb).
I found it very interesting that Dr. Leeb’s comments are also supported by an article written by Kate Moore on February 16, 2017. Ms. Moore wrote the Global Equity Outlook for BlackRock. She titled her article, “Warming up to China”.
Ms. Moore writes:
“We expect global reflation and a domestic cycle upswing, which will support Chinese equities. Progress on domestic structural reforms and undemanding valuations add to China’s equity attractions.”
“The biggest near-term risks China stocks is a breakdown in trade triggered by U.S. protectionism. Yet, trade is a smaller growth driver than in the past, and China is strengthening ties within Asia and making its economy more consumer driven.”
As always, your Resonate team remains committed to working hard on your behalf. One of the ways in which we do that is to read extensively, to listen to webinars and teleconferences, and also to attend multi-day investment conferences throughout the year.
As always, we invite you to share a conversation with us to talk about whatever it is that’s on your mind.
Barbara A. Culver
CFP®, ChFC®, CLU, AEP®