Author: Jon Sindreu / Source: WSJ
But this might be a riskier gamble than they realize, because unlike the U.S., these regions don’t hold their fate in their own hands. Over the past decade, equity markets across the world have increasingly moved in lockstep with Chinese stocks and Chinese economic data, as China has become more important to a growing number of countries.
China is now the main trading partner not just for Indonesia and Thailand, but also for Brazil, Chile and South Africa.Even Europe has become mostly a play on China, thanks to Germany’s prowess in exporting to the Asian giant. A decade ago, both European and U.S. stocks became unlinked from Chinese ones during periods of turmoil in China. Now, only the U.S. acts as something of a buffer against moves in Chinese stocks.
This looks like one of those times when that buffer could be needed. Car sales have been plummeting, and recent business surveys suggested that China’s manufacturing sector
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