During the summer, the collapse in China’s stock market dominated the financial news flow. As China’s market has leveled off since bottoming in August, news flow has moved away from it and right to collapsing oil prices and the Fed. Take a look at China’s Shanghai Composite index over the last six months in the chart below. It broke its steep downtrend in early November, and it’s currently testing resistance from its November highs. Let’s see if it can take out those prior highs before year end.
While China’s stock market experienced an epic collapse from May through August, it’s easy to forget that it’s still up year-to-date. The Shanghai Composite is up 12.6% YTD in fact. That’s about 14 percentage points better than the -1.8% decline for U.S. markets.