With Asian markets and copper taking a severe beating overnight, is this a simple correction or a start of a new trend? In our view, this is the beginning of the end for this expansion cycle in both the emerging markets and the US. China sitting on a massive pile of dirty debt, miss allocation and a massive speculative bubble in real estate, Japan’s Abenomics are about to backfire and the US is completing it’s bull market cycle as we speak. In short, the future looks bleak. While this will not be a directional move, expect this trend to continue over the next few years.
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Asian Markets Take A Beating Google
Ongoing worries over China’s economy weighed Asian equity markets down on Wednesday, while overnight losses on Wall Street further ignited a flight-to-safety.
Copper was given the spotlight for the day as prices fell to their lowest level in nearly four years overnight. Selling was intensified by worries about cooling Chinese demand and the liquidation of inventories used for finance deals.
Tai Hui, Chief Market Strategist Asia at J.P. Morgan Funds, told CNBC’s Asia Squawk Box, “The timing of this volatility coincided with a level of pessimism on China that we haven’t seen for quite some time.
(Read more: Traders watch to see why copper getting scorched)
“As a result, people are starting to backtrack every step along the way. In that sense, the collateral use of copper, steel and iron may be more of a negative story in the near term,” he added.
Wall Street shares declined on Tuesday on commodity jitters, while concerns about Ukraine lingered and investors awaited signals on the state of the economy.
The Dow Jones Industrial Average dropped 0.4 percent, while the S&P 500 shed 0.5 percent. The tech-heavy Nasdaq declined 0.6 percent.
| Name | Price | Change | %Change | ||
|---|---|---|---|---|---|
| NIKKEI | Nikkei 225 Index | 14830.39 |
|
-393.72 | -2.59% |
| HSI | Hang Seng Index | 21901.95 |
|
-367.66 | -1.65% |
| ASX 200 | S&P/ASX 200 | 5384.20 |
|
-29.64 | -0.55% |
| SHANGHAI | Shanghai Composite Index | 1997.69 |
|
-3.46 | -0.17% |
| KOSPI | KOSPI Index | 1932.54 |
|
-31.33 | -1.60% |
| CNBC 100 | CNBC 100 ASIA IDX | 6963.23 |
|
-109.99 | -1.55% |