equities

Chinese equities have plummeted on rumours that the People’s Bank of China plans to raise rates again to combat inflation, which came in at 4.4 per cent for October. Consumer prices rose substantially during the month – the annual rate was just 3.6 per cent in September.

The Shanghai Composite lost more than 5 per cent, with financial services and resource sectors hit particularly hard and dozens of stocks falling by their 10 per cent daily limit. Read more

American stocks opened sharply down today, following the Fed’s announcement and data showing the US trade deficit at a 21-month high in spite of this year’s dollar depreciation. The Dow index fell about 200 points on the open, before flattening at levels last seen about ten days ago (see chart). Equities have fallen globally today.

Either investors are nervous about the change in tone and outlook from the Fed, or they judge yesterday’s decision insufficient. Or both. All else being equal, the Fed’s decision should have increased the money sloshing round the system – and last time that happened, it was very inflationary for equities.

Much talk today of ‘risk contagion‘ as share prices continue to fall sharply across the world. Equities have been falling since the start of the year, but declines over the past two days have been sharp, between 3 and 5 per cent. Analysts are blaming growing fears over sovereign debt in Greece and Portugal – as measured by still-widening credit default swap spreads – and falling confidence in sovereign debt generally.

US markets were not helped by an unexpected rise in first-time unemployment claims yesterday, and today’s US non-farm payroll data is nervously awaited. Read more

More than half of all children in the US will use food stamps at some point, predicts new research. Equities fall sharply in the UK and Europe, in spite of strong manufacturing data, amid fresh concerns about mortgage-backed securities and the possibility of a second round of stimulus in the US Read more

China, India and Australia should all consider tightening monetary policy, says the IMF. Emerging economies show healthy signs, as US legislators fight to keep the house market moving, against falling prices, credit warnings and reduced mortgage applications Read more

Have we just seen the turning point in equity markets? A slew of bearish data from the US includes renewed predictions of falling property prices, and the UK should ensure credit is available to non-financial institutions too, if it wants to avoid the fate of mid 1990s Japan Read more

Decoupling? Asian economies discuss increasing intra-regional trade that is less dependent on exports to the West. Conflicting indicators from the US and warnings of bubbles in the UK Read more

China’s push for materials and energy leads it to be South Africa’s biggest trading partner. In spite of this, questions over China’s continued recovery and further questions on whether we are seeing the end of the rally in equities Read more

As money pours out of money market funds, we ask whether equity levels are sustainable and if the return of property-backed debt is a cause for celebration. Food security is a rising international concern and Bill Clinton asks if we should use the unemployed to increase energy efficiency. Read more