ASIA’S DAY: China’s stock market also rose to end a tumultuous week. Shares of Freeport McMoran dropped 9.1 per cent to US$5.61 (RM24.52). It may be tough for the market to keep climbing, particularly if the Federal Reserve is really intent on raising rates four times this year.
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China’s stock market has skidded this year as the government prepares to remove measures that were introduced last year to prop up share prices following a meltdown in June. Here is how CNBC described what just happened…
Many analysts and traders believed the circuit breaker – which pauses the markets for 15 minutes on a 5% decline, and closed them for the day on a 7% drop – was only working to panic investors, and give them time to put in reactionary sell orders.
On Friday, China managed to pull back from the brink and the benchmark Shanghai Composite closed 2%.
It’s not helping that crude oil prices continue to tumble. China is a key market for German’s BMW and Mercedes Benz, for example, and Germany’s DAX index is down 7.1 percent this week. If it moves 7 percent, trading will be suspended for the rest of the day.
Apple Inc. (AAPL) shares tumbled 3% in premarket trade, dropping well below $100 as questions are raised over production of the iPhone.
Money managers said the coming week, when big companies such as J.P. Morgan ChaseJPM -2.24 % & Co. and Intel Corp.INTC -1.04 % begin to report fourth-quarter earnings, may provide the catalyst to woo more investors into the stock market.
The Dow Jones industrial average and S&P 500 had their worst first five-day performance of a year in history, according to data from Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. All 10 S&P 500 sectors were lower, though. On Wednesday we saw the market hover around that psychologically-important number, and there is a whole lot of resistance right there.
China and cheap oil are seriously spooking the markets. This is the biggest devaluation since the August collapse. The index nearly erased a gain of 0.8% before stabilizing.
In the final hour of trade, the Dow Jones Industrial Average is down 340.23 points at 16,566.28. So the market is leaning toward increased yuan weakness and a potential devaluation. The Chinese are playing games with their currency, and this is causing havoc in the global marketplace.
Volatility in Chinese markets spurred a global selloff in riskier assets as concern deepened over the ruling Communist Party’s ability to manage an economic slowdown.
Commodities also took a hit with oil off 2.1% at $33.27 a barrel. He added that very low is the “new normal for interest rates”. Lisa Kopp, head of traditional investments at U.S. Bank Wealth Management, doesn’t see that happening. This is precisely what we would expect to see during the early stages of a new crisis.
A visitor waits for the New Year opening ceremony at the Tokyo Stock Exchange (TSE), held to wish for the success of Japan’s stock market, in Tokyo, Japan, January 4, 2016.
But most of my readers are not surprised.
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Data showed the number of Americans filing for unemployment benefits fell last week from a more than five-month high. The financial carnage that we have witnessed around the globe this week is simply a logical progression of what has already been happening.
