Republic Risk: Beware the Premarket Games

Rates are rising, real estate is weakening, and questions abound over China's economy. We aren't even close to finished with this market selloff barring a massive data surprise.

Equity Storm Watch Is RED on the S&P 500 and RED on the Russell 2000

We’re up about 200 points on the Dow as the markets attempt to shake off a six-day losing streak. It’s interesting because the markets don’t seem to react to the huge downturns across Asia and Europe. Even though China beat expectations on GDP, we saw a huge drop in their markets. 

The answer is simple: The Chinese financial system was downgraded, and that impacts liquidity, collateral quality, and the international system. China’s central bank is just as important as the Fed, and the nation uses more U.S. dollars than we do (hidden fact). There will likely be a major drop in the value of the Yuan at some point. In today’s rosy report from the International Monetary Fund, China was the bigger downside risk.  

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Dear Fellow Expat: 

Good morning. The S&P 500 has bled off for six straight days, marked by a move below the 50-day moving average for the first time since September of last year.