loader image

How China’s Collapsing Market Impacts Your US Stocks

by | Sep 24, 2021 | Stock Market Indexes

I’ve spent a good amount of time on Wall Street. If you’ve followed me for any length of time, then you know that. But what many people don’t know is I spent a large amount of that time focusing on trading international stocks — which is why I’m so engaged in the China stock market crash of 2021.  

And that’s because Asia was, to be frank, the best place to invest in the early 2000s. China joined the World Trade Organization in 2001, and Chinese stocks — after the Nasdaq bubble crashed — were where the best growth names and most action was found.   

Investors saw a country that went from being mostly into farming to one that was embraced for its capitalist modern economy.

So Chinese stocks flourished…

But what has happened over the past year and a half is a huge change in the official sentiment coming from Beijing. It no longer wants to expand the philosophy of capitalism and embrace big-time corporations.

Instead, the Chinese government wants to attack its own companies — locally and internationally.

How the Chinese Government is Behind the China Stock Market Crash in 2021

At the same time the government started doing this, China was undergoing a huge lag in natural growth, hitting a plateau in how much it was developing.

In the early 2000’s, China was growing at double digits, according to its GDP reports, if we’re to believe them. But now we’re seeing a China that’s growing south of 6% annually.

So now we have a country that’s stalling economically while its government is going after its best corporations — all because Beijing believes the way they make money is unethical.

At the moment, China is facing a situation where China Evergrande Group (OTCMKTS: EGRNF) — a huge property developer that built zombie cities no one moved into — has billions of dollars of debt.

The cherry on top is that a lot of people who are bond buyers and stakeholders in Evergrande are Chinese citizens.

This is emblematic of the corrosion going on underneath the hood in China.

And things are about to get a lot worse because now we have to consider how this is going to affect the U.S. and our stocks… 

Learn more about the China stock market crash in 2021 — and what it means for your portfolio — by watching my video below!

As always, send any trading questions to jeff@joyofthetrade.com and stay ahead of the markets, especially these choppy ones, by subscribing to our YouTube channel.

WRITTEN BY<br>Jeff Zananiri

Jeff Zananiri

What to read next

99 Problems and a “Pivot” is One

99 Problems and a “Pivot” is One

A friend of mine sent me this chart about three months ago. I should probably print it and keep it in my wallet next to a photo of my daughter. Given the sheer number of questions I’ve fielded lately, I’ll probably end up showing this chart more than her picture.

read more
Everything Everywhere, Going Down, All At Once

Everything Everywhere, Going Down, All At Once

When our momentum reading went negative last week, I didn’t know that we’d have the second largest bank failure in U.S. history three days later. All I knew was that it went negative… and that we got out of the way.

read more
Trust But Verify…

Trust But Verify…

I want to talk about our version of “Trust but Verify” in the markets. Qualification is the most important part of the investing process. And this F score value strategy looks to be crushing the current market.

read more

Have any questions? Contact Our Customer Service Team