When the SARS outbreak happened in 2003, China’s share of the global economy was about 10%. Today, however, China accounts for double that figure (20%) while also holding the title as world’s largest manufacturer. China’s burgeoning middle class also showers money around the world, with tourists spending approximately $260 billion a year.
These economic fundamentals place China and the global economy in a precarious position: one on hand, the economy benefits from sending people back to work and restarting factory operations. On the other, restarting the economic engine risks spreading the coronavirus even further and for longer.
To underscore just how important China’s economy has become on the global stage, consider that over the last five years, the three most material sell-offs in the S&P 500 index have had ties to China. There was the yuan devaluation in 2015, followed by downside volatility connected to the US-China trade dispute in fall 2018, followed by the selling pressure we’re seeing today connected to the coronavirus. Any good investment strategy, in my view, must account for China's significant influence on the global economy.
CHN saw its Moving Average Convergence Divergence Histogram (MACD) turn negative on July 18, 2024. This is a bearish signal that suggests the stock could decline going forward. Tickeron's A.I.dvisor looked at 43 instances where the indicator turned negative. In of the 43 cases the stock moved lower in the days that followed. This puts the odds of a downward move at .
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