We're in the midst of a global sell-off. Heavy volume liquidation began yesterday and is continuing today.
So what gives? Why all the selling?
It appears that worries about China provided the spark for this ongoing fire sale. We've talked about China as a big risk factor in previous remarks, and yesterday two items arose front and center. The first was a weak Purchasing Managers Index (PMI) reading, indicating China's economy has begun to contract. The second was renewed worries about the Chinese shadow banking sector and possible loan defaults.
To begin, an HSBC survey of Chinese manufacturing fell to its lowest reading in six months. After a reading of 50.5 in December, January's reading came in at 49.6. With PMI data, any value above 50 indicates expansion while a reading below 50 indicates contraction. Analysts were quick to note that there may be some distortions related to the data, but regardless, the news ... Log in or subscribe to continue reading.
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