It looks like the economic growth juggernaut just had a bit of a set-back. The Shanghai composite index hit a record yesterday and then proceeded to drop 8.8 percent on Tuesday. If this turns out to be a one day stumble then no problem, but if it worsens in the days ahead it could hurt Chinas economy. If we see spill over into lower resource demand that would of course be bad news for Canada.
Emerging markets in Asia also fell, along with European stocks, as the plunge shook investor confidence. Canada’s S&P/TSX composite index fell 196.60 points to 13,207.86, led by gold, energy and information technology stocks. It was the biggest drop since early January.
The move in China also may cause investors to have a second look at other investments that are perceived as risky, Mr. Guatieri said. â€œIt tends to shake confidence. If one market comes unglued, the market will look at other markets that are a bit frothy.â€
Update: Markets are down all over, US, Europe and Asia while treasury bonds rally. This is currently the lead story at CNN.