Shanghai: World Leader to World Laggard

What a difference a few days makes.  It wasn't long ago that China's Shanghai Composite was sporting triple-digit gains for the year, and investors were wondering how high it would go.  But today the main question is when will the selling stop?  In a span of only ten days, the Shanghai Composite has lost 17.5% of its value, bringing the index dangerously close to the technical threshold for a bear market (-20%).  Given that many were relying on China to help lead us out of the economic recession, the action in China's stock market is helping US equities start the week off on a notably bad note.

 

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