The glaring divergence between S&P 500 and Shanghai Composite1 September, 2012, 0:05. Posted by Zarathustra
For a while, the market seems to like Ben Bernanke’s speech at Jackson Hole.
In reality, the speech offers nothing particularly new from the beginning to the end, and the last sentence (which seems to be the only sentence that everyone cares) only repeats that the Fed will do more if needed.
Surely we have heard that many times now, but it seemed to be enough to make Jon Hilsenrath of WSJ excited to a point that he made everyone excited after all. Whatever…
While the US market looks happy and hovering at the highs, the glaring divergence between US and Chinese equities remains as glaring as it could get. While S&P 500 remains resilient, Shanghai Composite have been making new closing lows for three straight days.
We will have the official China manufacturing PMI tomorrow morning in China/Hong Kong Time. As a reminder, HSBC/Markit flash estimate was awful.
The chart below shows that glaring divergence, with both indices rebased to 100 on March 2009 (i.e. the S&P 500 bottom).