The interesting theme of the week is the moves we've seen in the stock market. Chinese stock markets closed on Thursday, for the weekend, due to the military parade. Today we've seen a 4% intraday drop in the Nikkei. This might be due to the fact people don't want to hold long equity exposure over the weekend.
Is this a precursor to what we're going to see on Monday or Tuesday? The interesting component is the close of the US stock market on Monday due to Labor Day. If the Shanghai Composite opens up 4-8% lower on Monday it could have a major spillover effect when US markets reopen on Tuesday.
This is the perfect bearish scenario for China to pull the rug underneath United States feet while they are celebrating Labor Day.
Is this a precursor to what we're going to see on Monday or Tuesday? The interesting component is the close of the US stock market on Monday due to Labor Day. If the Shanghai Composite opens up 4-8% lower on Monday it could have a major spillover effect when US markets reopen on Tuesday.
This is the perfect bearish scenario for China to pull the rug underneath United States feet while they are celebrating Labor Day.