How China Affects American Markets

China’s financial markets have been making headlines recently, and generally not in flattering ways. First its bubbly stock market soared and subsequently crashed. Then concerns spread about the country’s slowing economic growth. This week the country’s central bank reduced the value of its currency, the yuan. How much will these events affect financial markets in the US?

Topics: China

How Fast Will China Grow?

For many years China experienced extremely rapid economic growth, with its GDP often growing by more than 10% in a year. In the last few years its growth has slowed a bit, and the International Monetary Fund (IMF) projects that its growth rate will fall to 7.3% next year and 6.5% by 2019. While this is a substantial decline from some of its sky-high growth rates in previous years, these numbers still represent very rapid growth. By comparison, US economic growth has averaged less than 2.5% per year during the past 5 years.

Topics: Blog Larry Summers China

Can Australia’s Winning Streak Continue?

The past two decades have been tough for most international developed economies. Japan has experienced mediocre economic growth for the past 25 years. Europe has recently suffered through two recessions as it battled the global financial crisis and then a sovereign debt crisis. Australia, by contrast, has been a star of the global economy: it hasn’t had a recession since the early 1990’s. Its stellar economic performance is a key reason why its stock market has returned an average of 12.4% per year over the past 10 years, compared with 6.8% for international developed markets overall. Can its winning streak continue?

Topics: Blog Australia China

The Biggest Political Risk

We recently discussed the rise in political risk that investors have had to deal with over the past few years. But where is this risk most likely to have a meaningful impact on US investors? The answer, perhaps surprisingly, is East Asia.

Topics: Japan Blog Political Risk Asia China Iraq Ukraine Syria Middle East Russia

Q1 Recap: US Stocks Overcome Russia, China to Stay in Positive Territory

The first quarter of 2014 had a few bumps in store for financial markets, yet in the end almost every asset class ended up with positive returns. Bonds performed well as interest rates declined and the US inflation rate remained below the Federal Reserve’s 2% target. US stocks recovered from January jitters to end the quarter in positive territory. Even emerging market stocks, buffeted by fears of financial instability in countries such as Turkey, Russia’s military adventurism in Ukraine, and weak economic data from China, finished the quarter only slightly down.

Topics: Blog Stock Market Recap China Russia