THE START of February seems an eternity ago. Then, almost all concern about the coronavirus outbreak was focused on China, home to more than 99% of confirmed infections. America had seven known cases and Italy just two. The epidemic had not even received its official name. Less than six weeks later, covid-19, as the disease is now known, has become a global pandemic . Italy is under a country-wide quarantine. The virus is spreading rapidly in America.
Financial markets have also been turned upside-down. In early February, China was the trouble spot, its equities among the world’s worst performers . American stocks were, almost on a daily basis, climbing to record highs. Their positions have since been reversed. Equities have cratered throughout much of the world. The American stockmarket’s bull run, its longest on record, has come to a shuddering halt. Instead, it is China that stands as the world’s best-performing market of 2020.
Is this out-performance justified? At the most basic level, it makes sense that China’s equities have fared better than those of other countries recently. Fears about the spread of covid-19, and specifically about the economic damage that will result from the measures taken to slow it, have been the main reason for the collapse in share prices in America and Europe. In China the trend is running in the other direction. Factories and restaurants have, in growing numbers, re-opened their doors.
Valuations in China are also, in investors’ jargon, much less demanding. The price-to-earnings ratio of the S&P 500 was 25 before the recent sell-off and is still about 18, strong by historical standards. China’s CSI 300, by contrast, has a price-to-earnings multiple of 14, having endured many long years in the desert. Whereas American shares have tripled in price over the past decade, Chinese shares are worth roughly the same as in 2010, not factoring in dividends.
All that said, there is good reason to wonder whether the resilience of China’s stockmarket can endure. Notably, Chinese bond yields have fallen steadily over the past two months and are near record lows. The implication is that investors in the credit market, usually a more sober group than their stockmarket counterparts, think economic growth will remain weak even as covid-19 fades domestically. Troubles in the rest of the world will hit China in three ways. Its exports will suffer.
Maybe covid was indeed a China virus
Well things do.change let's wait for our upturn once again
That's because America actually know's who the hell spread the virus:|
The Economist seems to be cheering for China. Figures.
Good hope it never come bk up just as centuries ago n the world will b at peace again after 35 yrs of nightmares with this dangerous country
Looking forward to the statistics of American stocks in March.
Being totalitarian, China can lie about everything. Numbers, stats mean nothing....It's all good!!!! LMAO!!!!!!!
‘Wrestle it’s outbreak under control’? Really. You know what they did to their citizens to make that happen?
China's market 今年2月没啥问题啊。
Because China is becoming the safest place in the world, and thanks to Mr. President, America is still in a mess.
Well unfortunately I invested in both so........almost make no profit at all since one goes up and the other goes down....
Excellent! Now let’s work on getting rid of their ‘exotic animals’ food industry!
That's because President Bed Bug just realized this morning it's not a Democrat hoax. :-)
I thought their economy was dropping though? One news outlet says they’re dropping now yours is saying their economy is not....
It's never been a free stock market.
It cannot and it should not.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: TheEconomist - 🏆 6. / 92 Read more »
Source: AP - 🏆 728. / 51 Read more »
Source: NBCNews - 🏆 10. / 86 Read more »
Source: Reuters - 🏆 2. / 97 Read more »
Source: MarketWatch - 🏆 3. / 97 Read more »
Source: NYMag - 🏆 111. / 63 Read more »