|
Published: August 31, 2009
China has once again set the tone for our Monday
market forecast. Roll the videotape:
|
 |
Chinese traders dumped shares
early this morning after a popular
magazine rumored that the booming
Chinese loan market is cooling off.
Caijing magazine guessed that the
Chinese loaned about $29 billion in
August, a -43% crash from July.
While that number isn’t official,
traders around the red nation raced
for the exits. The Shanghai
Composite closed down -6.7%, its
worst day in over a year. 16% of the
stocks on the Shanghai Composite
fell -10%, the daily limit down.
Thus, as we charted above, Chinese
stocks are in a textbook bear
market. In fact, down -23% since its
2009 peak earlier this month, the
Shanghai Composite will be the worst
performing major national index in
the world for the month of August.
But still up around +50% for the
year, is this the time to pile back
into China -- the great hope of the
global market rebound? With the
Shanghai Composite still priced 29
times earnings, it’s hard to be too
enthusiastic. According to
Bloomberg, the MSCI Emerging Markets
Index is going for 19 times
earnings. -- Ian Mathias
Managing
Editor
AgoraFinancial.com Editor's Note: This
article originally appeared in
Daily Reckoning. |
