Friction In China

 With the US House speaker, Nancy Pelosi set to visit Taiwan today, China is feeling a bit intimidated by the visit. Add to this the 350 billion USD mortgage crisis in China, and Hong Kong futures are reflecting this slowdown.

China's factory output suddenly contracted a lot in July creating an economic slowdown in the Chinese as well as World markets. Add to this the mortgage crisis due to the boycott of over 90 cities by hundreds of thousands of home buyers due to stalled projects, and the US interference, the world stocks are looking to take a dip after a 3-day rally.

Oil prices have been plunging due this the fears of this economic slowdown. Futures pointed to muted starts in Japan and Australia and were more than 1% lower for Hong Kong after US equities snapped a three-day rally.

What this means for you: If you have been an intra-day trader, going short on Chinese stocks and oil would be a better option. Long-time investing at this point doesn't seem wise as there might be a further dip in the market after which investing would be more fruitful. With the second economic powerhouse slowing down, the USD is set to rise against most currencies, especially Asian.

Support Links:

Markets wrap by Bloomberg

S&P500 drop

Oil prices slump

China's mortgage crisis

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