David Fleer
Bristlecone Value Partners, LLC
12301 Wilshire Blvd., Suite 320
Los Angeles, CA 90025 USA
Work 1-877-806-4141

3rd Quarter Review: Another Case of Asian Flu?

October 9th, 2015

As we discussed last month, China’s economic slowdown, dithering on interest rates from the US Federal Reserve, and declining commodity prices weighed heavily on financial markets in the third quarter. The US stock market (as measured by the S&P 500 index) after hitting an all-time high in late July, subsequently declined more than 12% over the following month, its first decline of 10% or more—a so-called “correction”—in 4 years. It is now down for the year. Emerging markets were especially hard hit, with Chinese and Brazilian stock indexes each declining more than 25% in the quarter.

The economic slump in China affects a large number of commodity prices, by virtue of that fast-developing country’s outsized demand for raw materials. When combined with expanded supply, a number of pundits see lower prices that could persist for some time for certain natural resources. Despite these headwinds, the U.S. economy continued its “tortoise” performance. Europe, while not as strong as the U.S., also remains steady, notwithstanding the situation in Greece and Syria. Read the rest of this entry »

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