Global Stock Market Rout as Fear of Chinese Economic Slowdown Rises
As the global economy is ever more integrated and inter-dependent, there is no escape for one economy to remain unscathed if another one goes through significant tribulation. Same also holds true for stock market, and more so, to the uneasiness of common investors. Summer 2015 is turning out to be a banner year of suffering collective and integrated pain for the world market. It started all in China. Between June 12, 2015 and August 24, 2015, when Shanghai Composite Index fell by a whopping 8.7 percent, Chinese stock market fell nearly 38 percent. Many have called the August 24, 2015, clobbering of the Chinese stock market as the Chinese version of "Black Monday". However, as of Monday August 24, 2015, the Chinese stock market is down less than 1 percent for the year and up 43 percent compared to a year ago. The global stock market rout on August 24, 2015 spread from continent to continent, country to country like a wildfire.
* DOW Jones plunged more than 1,000 points within minutes off the beginning of the trading, before recovering and ending the day (August 24, 2015) 588.40 points at 15871.35, or 3.6 percent. Standard and Poor's fell 3.9 percent, or 77.68 points, to 1893.21. The broader market index on August 24, 2015 was below 11 percent compared to its highest level in May 2015, signifying what pundits call as market correction. Last time Standard and Poor's had to go through market correction was back in 2011. NASDAQ Index fell 3.8 percent, or 179.79 points, to 4526.25. The August 24, 2015, stock market rout coincided with pushing up bond prices, with the benchmark 10-year note falling as low as 1.90 percent before ending the day at 2.01 percent.
* In Europe, stock markets in Germany, France and Britain all registered losses on August 24, 2015 near or more than 5 percent.
* Brazil's Bovespa Index fell more than 5 percent within minutes of the start of trade to the lows last seen in the middle of the financial crisis in 2009.
USA
Many financial analysts and market pros see the first quarter of 2014 as little bubble-generating, out-of-line bull that may be dying for some pause or pullback. One of the market pro, Will Deener, in an April 1, 2014, The Dallas Morning News article cited four major reasons for a possible market correction, or even worse:
* An increasing number of stock investors are investing in the market on the "margin", or borrowed money.
* Many companies are filing for IPOs, a convenient route to generate capital.
* P/E ratio is at present outside the historical normal range.
* Major indices are either hitting at all-time high, or veering near all-time high.
Worst First Week of Market Performance
The U.S. stock market suffered the worst first week ever as DOW dropped by 6.2 percent, NASDAQ dropped by 7.3 percent and Standard and Poor's plunged by 6 percent in the opening week (January 4-8, 2016) of 2016. The sell-off was triggered not so much by economic fundamentals, but to a large extent, as a result of emotional reaction of investors to the wobbly Chinese stock market as well as slowdown in the economies of developing nations, especially that of China.
As the global economy is ever more integrated and inter-dependent, there is no escape for one economy to remain unscathed if another one goes through significant tribulation. Same also holds true for stock market, and more so, to the uneasiness of common investors. Summer 2015 is turning out to be a banner year of suffering collective and integrated pain for the world market. It started all in China. Between June 12, 2015 and August 24, 2015, when Shanghai Composite Index fell by a whopping 8.7 percent, Chinese stock market fell nearly 38 percent. Many have called the August 24, 2015, clobbering of the Chinese stock market as the Chinese version of "Black Monday". However, as of Monday August 24, 2015, the Chinese stock market is down less than 1 percent for the year and up 43 percent compared to a year ago. The global stock market rout on August 24, 2015 spread from continent to continent, country to country like a wildfire.
* DOW Jones plunged more than 1,000 points within minutes off the beginning of the trading, before recovering and ending the day (August 24, 2015) 588.40 points at 15871.35, or 3.6 percent. Standard and Poor's fell 3.9 percent, or 77.68 points, to 1893.21. The broader market index on August 24, 2015 was below 11 percent compared to its highest level in May 2015, signifying what pundits call as market correction. Last time Standard and Poor's had to go through market correction was back in 2011. NASDAQ Index fell 3.8 percent, or 179.79 points, to 4526.25. The August 24, 2015, stock market rout coincided with pushing up bond prices, with the benchmark 10-year note falling as low as 1.90 percent before ending the day at 2.01 percent.
* In Europe, stock markets in Germany, France and Britain all registered losses on August 24, 2015 near or more than 5 percent.
* Brazil's Bovespa Index fell more than 5 percent within minutes of the start of trade to the lows last seen in the middle of the financial crisis in 2009.
USA
Many financial analysts and market pros see the first quarter of 2014 as little bubble-generating, out-of-line bull that may be dying for some pause or pullback. One of the market pro, Will Deener, in an April 1, 2014, The Dallas Morning News article cited four major reasons for a possible market correction, or even worse:
* An increasing number of stock investors are investing in the market on the "margin", or borrowed money.
* Many companies are filing for IPOs, a convenient route to generate capital.
* P/E ratio is at present outside the historical normal range.
* Major indices are either hitting at all-time high, or veering near all-time high.
Worst First Week of Market Performance
The U.S. stock market suffered the worst first week ever as DOW dropped by 6.2 percent, NASDAQ dropped by 7.3 percent and Standard and Poor's plunged by 6 percent in the opening week (January 4-8, 2016) of 2016. The sell-off was triggered not so much by economic fundamentals, but to a large extent, as a result of emotional reaction of investors to the wobbly Chinese stock market as well as slowdown in the economies of developing nations, especially that of China.
First Texas-based Stock Exchange Proposed
James Lee, founder and CEO of the Texas Stock Exchange (TXSE), announced on June 5, 2024 that the group had raised $120 million from Citadel Securities, BlackRock, and other investors to launch the first Texas-based stock exchange. The TXSE will be based in Dallas, and will employ about 100 people. As the very first step, the group will file application to Securities and Exchange Commission for the required registration. It has set late 2025 as the opening timeline and early 2026 for listing stocks. Analysts do see lot of silver linings behind this innovative, Texas-size effort. There are three broad benefits:
* Reputational and Brand Recognition
* Regional Economic and Cultural Unification
* Trickle-down Effect for Tomorrow's Start-ups
