The curious calm at the centre of the storm

Please see below the latest ‘Chart of the Week’ from State Street Global Markets


This week Michael Metcalfe, global head of Macro Strategy, questions whether Chinese markets are now a potential source of optimism.  

“Despite its lowest Purchasing Managers Index (PMI) in more than a decade and economic headwinds from Coronavirus, China’s equity markets have staged a remarkable recovery in the past month. However, outside of China it is a very different story, with global equity markets suffering sharply as the rate of contagion accelerates. This now invites the question, at what point could the weakness in global equities be contained, either by a less sharp rise in new cases or optimism about a policy response to offset weaker growth? Either way it is a curious fact that Chinese equities have outperformed global markets, even though Chinese growth, initially at least, seemed certain to take the biggest hit.”


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