Last night there were some pretty ugly fireworks in China, as that market declined about 8.5%, which is essentially one of the biggest breaks that country has ever seen, this after all kinds of support measures were put in place. Thus, the Chinese authorities have shot off a bunch of bullets and they haven’t really worked.
The 2008 Finanial Crisis
It’s a bit like when the government here was changing all kinds of rules and putting program after program in place to try and undo the 2008 financial crisis, which only worked after stocks got low enough and the Fed printed enough money. Perhaps the Chinese authorities can push the market up after it cracks further and they have to throw even more props at it, but they have to be quite concerned about this latest hit. Europe was weaker by a couple of percent, most likely as a consequence of what happened in China, and the early going here saw the indices drop about 0.75% to 1%. Then the dip buyers showed up, however, and went after scattered and sundry tech stocks, along with a couple of the big recent winners like Google and Amazon, which cut the losses to about 0.5%. From there the market leaked again, and by day’s end was back to the day’s lows.
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